Local Taxation Level 2

Question 1

Office - Birmingham
What is a material change of circumstance?

Answer 1

MCC is set out in Section 7 paragraph 2 of schedule 6 of the local government finance act 1988.
It is any change to the mentioned matters.

Question 2

Office - Birmingham
What are the mentioned matters for MCC’s?

Answer 2

• Matters affecting the physical state or enjoyment of the property.
• The mode or category of occupation of the hereditament
• The quantity of minerals or other substances in or extracted from the hereditament
• The quantity of refuse or waste material which is bought onto and permanently deposited on the hereditament
• Matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless physically manifest there
• The use or occupation of other premises situated in the locality of the hereditament.

Question 3

Office - Birmingham
Which of the mentioned matters did the tramworks breach?

Answer 3

Matters affecting the physical state or enjoyment of the property.

Question 4

Office - Birmingham
What is an end allowance?

Answer 4

It is an adjustment to the entire hereditament to account for things such as tram works.

Question 5

Office - Birmingham
What are the propositions laid down in Lotus & Delta v Culverwell [1976]?

Answer 5

1. The subject rent is the starting point
2. Closer the subject rent is to the statutory definition of RV the more weight to be attached
3. The rents of comparable properties agreed close to the valuation date are to be considered.
4. Assessment and settlement evidence is to be considered.
5. The basket of evidence is to be considered and weight to be attached.
6. In the absence of the above evidence. The subject rent is to be taken as the best evidence.

Question 6

Office - Birmingham
Did you place much weight on the subject rent from 2020?

Answer 6

Yes, I placed some weight on the subject rent in line with Lotus & Delta. However, I used this as evidence a landlord and tenant would not negotiate a reduced rent due to the works.

Question 7

Office - Birmingham
How do you know there was rental growth in the area?

Answer 7

I had regard to the rents at AVD and rents at the material day which showed an increase to values. I also had regard to market reports for offices in Birmingham city centre.

Question 8

Office - Birmingham
How did you ascertain no end allowance was required?

Answer 8

The subject rent supported no decrease and the further rents from the same property also supported this.
I also provided photographs showing no disturbance to the property and access from both roads into the subject car park.

Question 9

Retail - Birmingham
What is double frontage?

Answer 9

The property didn’t have double frontage. It benefitted from return frontage as there was no entrance on the one side.
Double frontage - is where the property benefits from two shop fronts and entrances on both sides.
Return frontage - is where the property is positioned on a corner of two streets and benefits from exposure on both sides (but no entrance on the one side.)

Question 10

Retail - Birmingham
Is the entrance the main driver of where the value is derived from?

Answer 10

Not always but it has a bearing. Locality is a big driver in this valuation. However, I had regard to the subject rent which was agreed on AVD and was in line with the rents on the inferior street.

Question 11

Retail - Birmingham
Did you rely just on the subject rent when attributing value?

Answer 11

No, I had regard to rents from the superior street and inferior street. I also used my local knowledge which I knew the inferior street had a much reduced footfall.

Question 12

Retail - Birmingham
What uplift did you apply? What evidence did you have for this?

Answer 12

I applied a 5% uplift to the Rateable Value.

I had regard to the increased rental values from the superior street. I applied a 5% uplift in line with other properties which also had a return frontage in the area.

Question 13

Retail - Birmingham
How did you agree with the agents contentions?

Answer 13

I discussed the case with the agent and stated I agreed with their submission and I would be well-founding the case.

I reduced the RV and issued the revised rateable value to the billing authority so they could calculate the bill for the ratepayer.

Question 14

How do you value Plant and Machinery?

Answer 14

I have regard to the plant and machinery regulations 2000 and the VOA cost guide.

On inspection I ensure to take ample photographs including the information plate so I have all the information required.

Question 15

What plant and machinery guidance is there for rating? What are the classes for P+M?

Answer 15

Plant and Machinery regulations 2000.

There are four classes of P+M:
- Class 1: Power (air compressors, steam turbines, wind turbines)
- Class 2: Services (Heating, cooling, ventilating, refrigerating machines)
- Class 3: Movement (Railway lines and tracks, Lifts, elevators, hoists, escalators)
- Class 4: Structure (Bridges, tunnels, fixed cranes)

Question 16

What are the decapitalisation rates for Rating?

Answer 16

Standard - 4.4%
Health and education - 2.6%