Matt - Local taxation/assessment - Level 1

Question 1

What is the definition of Rateable Value?

Answer 1

An amount equal to the rent that the hereditament would reasonably be expected to let for year to year on the assumption that:

1. The tenancy begins on the day by reference to which the determination is made
2. The property is in a reasonable state of repair, excluding any repairs which a Landlord would consider uneconomic
3. The tenant is responsible to pay all the taxes and insurances to command that rent

Question 2

What are some of the additional assumptions within the hypothetical tenancy?

Answer 2

1. The property is assumed to be vacant and to let
2. Tenant is fresh to the scene
3. Rebus sic stantibus - valuing it as it is. Two limbs, Physical and use
4. Mode or category

Question 3

What would you consider when identifying the hereditament?

Answer 3

1. Four tenets of rateability - Actual, Beneficial, Exclusive and not too Transient (ABET)
2. PICO legislation to determine the number of hereditaments with contiguity condition
3. Relevant case law such as Cardtronics v Skykes to establish who remains in paramount control of the hereditament.

Question 4

Tell me about the Non-Domestic Rating Act 2023

Answer 4

New legislation that received royal assent on 26 October 2023 with some of the following changes:

1. A change in the frequency of Reval periods (5 years to 3 years)
2. Disclosure of rental analysis to ratepayers for transparency
3. Creating a duty for ratepayers to submit up to date information of their properties to the Valuation Officer with penalties for non compliance
4. Introduction of improvement relief
5. Amendment to the mentioned matters within Schedule 6, Paragraph 2(7)

Question 5

Tell me about Lotus & Delta Ltd v Culverwell.

Answer 5

This is a leading case law within Rating that sets out the hierarchy of evidence to determine a properties Rateable Value.

It was in relation to a shoe shop in Leicester.

Question 6

Tell me about the 6 propositions detailed within Lotus & Delta?

Answer 6

1. The subject property rent is a starting point
2. The closer the subject rent is agreed to the circumstances within the statutory requirements then the more weight should be attached to it
3. Where the rents of similar properties are available, they too should be looked at to value the subject hereditament
4. Other comparable property assessments are relevant
5. In light of all the evidence, an opinion can then be formed of the value of the subject property
6. Where no comparable property rents or assessments are available, it would be difficult to reject the actual rent on the subject

Question 7

What are some exemptions from Non-Domestic Rating?

Answer 7

1. Agricultural relief
2. Fish farms
3. Public parks
4. Properties used for the training of disabled people
5. Places of public religious worship

Question 8

Where can I find the list of exemptions for Non-Domestic Rating?

Answer 8

Local Government Finance Act 1988, Schedule 5

Question 9

What are some reliefs from Non-Domestic Rating?

Answer 9

1. Small business rates relief
2. NNDR relief
3. Charitable relief
4. Improvement relief
5. Transitional relief

Question 10

How does the billing process work?

Answer 10

VOA are responsible for setting RVs for hereditaments, local authority are responsible for billing and collecting the rates from ratepayer.

Question 11

How is the bill calculated for Non-Domestic Rates?

Answer 11

Rateable Value multiplied by NDR multiplier equals the bill.

Question 12

What are the different multipliers in Non-Domestic Rating?

Answer 12

1. Small business rates multiplier which is 0.499 (49.9p) for properties with an RV of £15,000 to £50,999
2. Regular business rates multiplier which is 0.546 (54.6p) for properties with an RV of £51,000+

Question 13

Who sets the non domestic rating multipliers?

Answer 13

Central Government

Question 14

What are the current Non-Domestic Rating multipliers?

Answer 14

SBRR = 0.499

National = 0.546

Question 15

How long are the current multipliers in effect for?

Answer 15

For the 2024/25 tax year.

Chancellor confirmed a freeze to the SBRR multiplier but an increase to the NNDR multiplier in line with CPI to 0.546

Question 16

Tell me about the Check, Challenge and Appeal process.

Answer 16

This was a process introduced with the 2017 Rating List to allow ratepayers or their representatives to challenge their properties RV.

Three stages, which are Check, Challenge and Appeal.

Check - To determine the facts about a property

Challenge - To negotiate/challenge the value of the property

Appeal - If Challenge isn’t resolved by agreement or withdrawal, there is a right of appeal to the VTE by Appellant/Ratepayer

Question 17

What are the timings for the Check, Challenge and Appeal process.

Answer 17

Check - Must be completed within 12 months of receipt otherwise it goes to Challenge stage. There is a strict 4 month window from Check decision to submit a Challenge

Challenge - Must be completed within 18 months of receipt otherwise it goes to Appeal and VOA may be barred. There is a strict 4 month window from Challenge decision to submit an Appeal.

Appeal - 4 month window from Challenge decision to submit appeal to VTE. One month decision to appeal to UTLC after decision from VTE.

Question 18

What are some of the different methods of valuing properties in Non-Domestic Rating?

Answer 18

Bulk class properties such as shops, offices and industrials are done by the comparable method.

Leisure type of properties such as Cinemas, hotels and theatres are done on Receipts and Expenditure method of valuation.

Specialist type of properties such as schools, universities, airports, and fire stations are done on the Contractors method of valuation.

Question 19

What are the 4 classes of plant and machinery?

Answer 19

1. Power
2. Services
3. Transport
4. Building/structure

Question 20

What is the principal legislation behind rateable plant and machinery?

Answer 20

The Valuation for Rating (Plant and Machinery) (England) Regulations 2000

Question 21

What are the two limbs of Rebus sic stantibus?

Answer 21

1. Physical - the property has to be valued as it is
2. Use - the mode or category of occupation