MG- Rating Flashcards
In the retail shop you valued, if you had measured it what basis would you use?
NIA
Zone the unit in 6.1m increments to zone c, after that the remainder is the depth that is left
nonstructural partitions are ignored when using the zoning method.
Internal widths should be taken from the block/brickwork or from the plaster surface.
Staircases, columns, piers, structural walls, escalators, lifts and other similar features should be accurately plotted on plans.
Toilets should be measured and shown separately
What is the acendun case and what was the uplift per sq m ?
Decision in Bunyan (VO) V Acenden Ltd states Cat B space is worth more than Cat A.
Negotiation and then … CBRE and VO agree Cat B addition of £25/sqm to be applied to Central London grade A offices.
What is the Shoosmiths and mando case and what was the decision ?
Shoosmiths and Mando Group v Hitchings (VO [2024] VTE CHG100528632
Following on from the Acendon House case in 2023, this was another appeal involving the value attributable to offices which on the material day were in Category B condition [ie including tenant’s rateable fit-out works] and what enhancement should be applied for Category B over Category A [shell].
The winner? The ratepayers, in that they achieved reductions in value, albeit enhancements for Category B fit out were applied and we understand that the valuation office (VO) has appealed to the upper tribunal (UT).
The valuation tribunal (VT) applied a £15 per sq m uplift for Shoosmiths’ office in Manchester whilst they ascribed £10 per sq m for Mando (Liverpool). This compared to the £25 per sq m uplift “universally accepted” [in the tribunal’s words] for offices in and around London, where costs would be higher.
Does the increase of £15 for fitout in manch and £10 psf in liverpool proposed in shoosmiths hold much weight?
Not yet - diff to quantify how they have reached these values
What is the key outcome of the acendun v bunyan case?
Applied £47 per sq m in London on 2017 list for cat b fit out Ascenden Ltd’s offices at Ascot House, Maidenhead - CAT B Space is worth more than Cat A
Renegotiated to apply £25/sqm to be applied to Central London grade A offices.
Give an example of an MCC in birmingham
Paradise Birmingham impact on offices
What did O’Brien v Harwood 2003 establish about tone?
that there are THREE STAGES:
- At first, when a new rating list is put on deposit, entries will carry relatively little weight: they are opinions of value by the valuation officer, as yet unchallenged and untested by negotiation.
- Over time assessments will be challenged and agreed or determined by a valuation tribunal or this tribunal or accepted by lack of challenge.
- Finally a stage is reached where enough assessments have been agreed or determined or are unchallenged to establish a pattern of values, a tone of the list.
How does the fit out debate affect space that is let furbished ?
not clear answer - how does this fit in with the vacant and to let hypothesis anyway?
What are the timelines for the CCA process?
VOA has 12 months to decide on a check but they aim for 3 months
4 months after check decision for a challenge
18 months voa for a challenge
4 months to appeal challenge to tribunal
Give an example of co-ordination with the VOA
Receiving a challenge or check decision that you don’t agree with and trying to have a conversation or agreeing to go and measure a property with the voa
What is the AVD in scotland?
What are the last 4 rating lists?
2005,2010,2017,2023
What is the purpose of revaluation?
The whole purpose of having a revaluation is to reassess relativities and rebase the valuations to the new dates an
What 2 things should each new rating list take into account?
PHYSCIAL - takes into account the changed physical circumstances at MARKET - changed market conditions at the new Antecedent Valuation Date.
what has the autumn budget (30 oct) said about rating?
what is a key change in the local gov and finance wales bill (24) in terms of rates mitigation?
It introduces a new anti-avoidance framework to permit the Welsh Ministers to
specify artificial anti-avoidance activity in regulations. The provisions also permit the
Welsh Ministers to impose financial penalties in connection with anti-avoidance
arrangements.
If a unit is split into two hereditaments can you get a new rate free period?
Yes, if the hereditament is split and returned to the LL they might be able to benefit from a fresh rate period once the property is brought into the rating list (example unit 6a/6b)
If you measured a unit and found that it contained say an office space which would increase the assessment would you declare this?
At present there is no duty to notify but understand there will be once the mechanism for this is in place
- tell client to budget for anticipated increase of xx
What is a compiled list error??
An error made from the AVD (ie the voa bring a property in at apr 23 and have the incorrect factual details) - THIS MEANS THEY CAN ONLY CHANGE THE RV FROM THE DATE THEY REALISE THIS - CANT GO BACK TO APRIL 2023
- if the property changes e.g. adds in an office after apr 23 then the VOA can charge the RV from the date the change took place.
what is the summary of jackson vs canary whard
OFFICE DELETION - 2 floors of a tower block (One Canada Square) at Canary Wharf, which had been stripped out to shell for 2 years.
AT the upper tribunal the case was decided
- The assessment of whether or not the property was capable of beneficial occupation is a matter of objective fact requiring no hypothetical assumptions - didn’t matter that there was not a scheme of works.
The nominal assessment of rateable value £1, determined by the Valuation Tribunal, was upheld.
What is the key case summary for monk and newbiggin?
Supreme Court - OFFICE strip out for refurbishment
The offices had been stripped out including removal of sanitary fittings, electrical wiring including the comfort cooling system, most of the ceiling tiles and light fittings and about 50% of the raised floors.
Where premises are undergoing redevelopment as a consequence of which they
are incapable of beneficial occupation they do not constitute a hereditament and, therefore,
them repair assumption in the statutory formula cannot apply.
If it is determined that the
premises do constitute a hereditament one must then consider the mode or category of
occupation and then whether the premises are in a reasonable state of repair consistent with
that mode or category.
in this case the Supreme Court ruled that Monk premises were undergoing refurbishment on
the material day and that the Upper Tribunal was entitled to alter the rating list so as to
reduce the RV to £1 (“building undergoing reconstruction”).
In the contractors basis how can you deduct for obsolescence or age?
The Monsanto case established a scale to be used if accounting for age/ obsolescence
What’s the final stage of the contractors basis?
Stand back and look - assess if it looks appropriate per sq m
What is the premise of the receipts and expenditure method and what type of properties ?
Concept is that income less expenditure = divsible balance
- Often used for pubs, leisure etc
What are the key cases relating to the deletion?
Monk v newbiggin
Jackson v canary wharf
What are the principles of monk v new biggin and jackson?
Overall key point is that if the works render the property incapable of beneficial occupation for its category of use then it is not rateable
if you have got two properties next to each other how can you merge these assessments and what’s the leading case?
Mazaras 2015 - Mazars LLP, a firm of accountants, occupied Floors 2 & 6 of Tower Bridge House, a modern office block situated opposite to the Tower of London. As would be expected, the floors had various teams spread across them and there was a continual flow of staff between the floors via multiple high-speed lifts.
- Case went to the supreme court ruling
THE IMPACT WAS…
The VOA’s QC took a different approach during the Supreme Court hearing, choosing to rely heavily on Scottish rating law and less so on English rating law, which are substantially different in relation to contiguity. -
- Following an announcement in the 2017 Budget the Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill was introduced in the House of Commons and received Royal
Assent on 1 November 2018. - The Act has retrospective effect from 1 April 2010 and provides that
where two or more hereditaments are occupied by the same person (whether or not in the same building but provided they are not used for a different purpose) and meet the “contiguity condition”
they will be assessed as one hereditament - Premises will be
contiguous if either
(a) they are on consecutive floors of a building and some or all of the floor of one hereditament lies directly above all or part of the ceiling of the other hereditament (ignoring
voids for services etc) or (
b) they share a common wall, fence or other means of enclosure.
What’s the current multiplier in england 2024 to 2025 and what are they influenced by?
Under £51,000 RV - it is 0.499
Over 51,000 RV - 0.516
Both multipliers usually change every year in line with inflation
What is the staircase tax?
Tax relating to when 2 floors which were contiguous weren’t assessed together and therefore were at a higher rate
This was overturned
Please can you explain the CCA process
check - voa have 12 months
challenge - 4 months to challenge check then voa have 18 months
appeal - 4 months to appeal a challenge decision
Is there a cost for the tribunal ?
Yes - it is refunded if you win
pay a fee of £150 (for smaller proposers) or £300 (for any other proposer).
If you went to tribunal what would change about relationship with client?
- agree a fixed fee basis with the client
- Duty is to the tribunal
- relationship changes to advise tribunal rather than assist client
How would you act as an advvocate and an ex witness?
Know that i can only do this in lower tribunals
Watched a cpd focusing on this
Need to clearly say I’m acting as an ex wit now and then switch to advocate
- make clear that i am giving ex witness evidence that is duty to the tribunal
- when acting as an advocate that’s when you can discuss the legal argument
DEClare fee basis
Can you go to a tribunal on a conditional fee?
You can in a business rates lower tribunal but this needs to be declared to tribunal
What is the implications of the acendun case for offices in London?
This addition will be made to Cat A rental evidence that is considered within the Check Challenge and Appeal environment and will be used to help determine the level of rateable value. Existing rateable values will not be increased in either the 2017 or 2023 rating lists.
3 stages of R & E METHOD
1-GROSS PROFIT - Firstly the gross profit derived from occupation of the hereditament is calculated by deducting the cost of purchases made from gross receipts.
2-DEDUCT EXPENSES- The working expenses, including an allowance for renewal of the tenant’s assets, are then deducted from the gross profit to give the divisible balance.
3 -DIVISIBLE BALANCE- The divisible balance represents the amount to be shared between the tenant (tenant’s share) and the landlord (rent, or rateable value) - often this might be 50/50 but depends
What does the tenants share in r and e represent and how do you calculate ?
The tenant’s share is, broadly, the amount which the tenant will require out of the business to induce him or her to take the tenancy at the rent as evidenced by the valuation, bearing in mind the capital needed to operate the business and the risk to that capital.
There are four basic methods of estimating the tenant’s share:
i. percentage on tenant’s capital;
ii. percentage on receipts;
iii. proportion of divisible balance;
iv. spot figure.
Definition of RV
“The rateable value of a non-domestic hereditament …shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on these three assumptions -
- let at avd
Let in reasonable state of repair
Fri lease
