Rating

Question 1

What is rating

Answer 1

A form of taxation on the occupation of non-domestic property.

Question 2

What is the definition of rateable value

Answer 2

Paragraph 2(1) of Schedule 6 to the Local Government Finance Act 1988:

The rateable value of a non-domestic hereditament none of which consists of domestic property and none of which is exempt from local non domestic rating] 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—.

a) the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;
b) the second assumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;
c) the third assumption is that the tenant undertakes to pay all usual tenant’s rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command the rent mentioned above.

Question 3

What is the Material day and Antecedent Valuation Date?

Answer 3

The Material Day is the day on which the physical state of the premises and locality is considered

The Antecedent Valuation Date is the date on which the hereditament is valued from. Economic climate and demand must be considered from this date

Question 4

What are the matters which are assumed at the Material Day and where are they defined?

Answer 4

Schedule 6 para 2(7):

a) matters affecting the physical state or physical enjoyment of the hereditament
b) the mode or category of occupation of the hereditament
c) the quantity of minerals or other substances in or extracted from the hereditament
cc) the quantity of refuse or waste material which is brought onto and permanently
deposited on the hereditament,
d) 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, and
e) the use or occupation of other premises situated in the locality of the hereditament

Question 5

What are the matters which are considered at the Antecedent Valuation Date?

Answer 5

Inflationary trends

Changes in distribution of money between sectors and regions

Interest rates

Peoples attitudes

State of the market

Question 6

What is a hereditament

Answer 6

S64 LGFA a hereditament means property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list. Hereditament also encompasses a right over land

Question 7

How do you determine rateable occupation? What is the case law?

Answer 7

John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344

• Actual occupation
• Beneficial Occupation
• Exclusive occupation
• Not too transient

Question 8

What is actual occupation (ABET)

Answer 8

The physical presence of the occupier on the premises. This can be through storage of items

Question 9

What is exclusive occupation (ABET)

Answer 9

Ability to have paramount control over the property that is let out

Question 10

What is beneficial occupation (ABET)

Answer 10

occupier is receiving some form of benefit from occupying the space. This does not have to be financial but can be to fulfil a purpose e.g. education

Question 11

What is meant by transience (ABET)

Answer 11

Property has some level of permanence to its location and is not movable. Intensity of use does also account for transience

Question 12

How do you determine if two non-domestic hereditaments can be merged?

Answer 12

The ‘ Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018’

One rating assessment will generally now be applied to neighbouring floors or units occupied by the same business, so long as:

1. They are “contiguous”; and
2. They are not used for wholly different purposes.

Premises are contiguous with each other if they share at least part of a common boundary (e.g. a wall or fence), or if they are on consecutive floors and at least part of the floor of one unit lies directly above at least part of the ceiling of the other unit. Premises might still be contiguous even where there is a space between them that is owned or occupied by another person, for example the ceiling void between two floors.

Question 13

What is ‘Mode or Category of occupation’?

Answer 13

It’s meaning was confirmed in the case Williams (VO) v Scottish and Newcastle Retail Ltd [2001]

that the hereditament could only be occupied for a purpose within the same mode or category of purpose as that for which it was being occupied on the material day. Any prospective change of use outside that mode and category is to be ignored

Question 14

What is the purpose of transitional relief?

Answer 14

To taper large changes in a properties rateable value caused by a revaluation

Question 15

What are the transitional relief arrangements for non-domestic properties in Wales?

Answer 15

There are non, it was phased out in 1995

Question 16

What is a ‘Check, Challenge, and Appeal’

Answer 16

The appeals process introduced for the 2017 Rating List in England. A Check confirms matters of fact, a Challenge is a proposal to alter the rating list, and an Appeal is made against the VO’s decision at challenge stage

Question 17

What are the deadlines for submitting a Challenge after submitting a Check?

Answer 17

Within four months of the Check decision, or within 16 months of your check submission if the challenge is about a material change of circumstance. If the VOA fail to respond to the check then an additional 12 month period is given

Question 18

When can you submit an Appeal after Submitting a Challenge?

Answer 18

Within four months of the Challenge decision, or if the VOA has not responded to a Challenge within 18 months of submission

Question 19

What governs the submission of evidence at Valuation Tribunal

Answer 19

Regulation 17 of The Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009 (as amended)

Question 20

What legislation relates to vacant property releif

Answer 20

Rating (Empty Properties) Act 2007

Question 21

What business rate relief is available for businesses affected by COVID-19?

Answer 21

Businesses in the retail, hospitality and leisure sectors in England will not have to pay business rates for the 2020 to 2021 tax year.

Question 22

What properties are exempt from rating and where can this be found?

Answer 22

Schedule 5 to the Local Government Finance Act 1988:

• Agricultural premises
• Fish Farms
• Places of religious worship etc.
• Certain property of Trinity House
• Sewers
• Property of drainage authorities
• Public Parks
• Property used for the disabled
• Air-raid protection works
• Swinging moorings
• Property used for road user charging schemes
• Property in enterprise zones
• Visiting forces etc

Question 23

What is Plant & Machinery and how is it rated?

Answer 23

Plant & Machinery are things “with which” a person conduct their business. It is a component of rateable property and is rateable if it is a listed item in The Valuation for Rating (Plant and Machinery) (England) Regulations 2000:

• Class 1 - Power
• Class 2 - Services (Manufacturing operations or trade processes)
• Class 3 - Movement
• Class 4 - Named Structures

Question 24

What is the main legislation for the rating of plant and machinery

Answer 24

Valuation for Rating (plant and machinery) Regulations 2000

Question 25

Name the 4 classes of rateable P&M

Answer 25

1) Power generation e.g. cables, conductors and wind turbines
2) Services to a property e.g. heating, cooling and supplying water
3) Rateable infrastructure e.g. including lifts and railway tracks
4) Process plant such as fixed cranes, masts and tanks

Question 26

What relief is there for businesses impacted by COVID

Answer 26

Business rates holiday for retail, leisure and hospitality up until 2021 tax year. This is automatically applied to businesses

Question 27

What is a material change in circumstance

Answer 27

Defined in schedule 6 para 2 (7) of the LGFA

Matters affecting the physical state or physical enjoyment of the hereditament,

The mode or category of occupation of 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 (smoking ban)

The use or occupation of other premises situated in the locality of the hereditament.

Question 28

What is the decapitalisation rate for properties valued on the contractors basis

Answer 28

4. 4% Normal

2. 6% Health and Education rate

Question 29

When was the definition of rateable value introduced

Answer 29

Rating Act 1990

Question 30

How would you value a composite hereditament

Answer 30

The domestic and non-domestic split is based on a notional usage basis whereby the pattern of other shops is considered in order to determine what the hypothetical occupation of domestic and non-domestic space is

Question 31

When is a property domestic

Answer 31

S66(1) of the LGFA 1988 defines a domestic dwelling as

a) Wholly used for the purpose of living accomodation
b) Yard, garden, outhouse or other appurtenance belonging to or enjoyed with the property
c) It is a private garage with a floor area of 25m2 or less used wholly for the accomodation of private motor vehicles
d) Is a private storage premises used wholly or mainly for the storage of articles of domestic use

Question 32

What tests would be conducted when trying to identify a single hereditament?

Answer 32

1) Within one or more billing authorities
a. If straddling 2 authorities the portion of land with the higher rateable value will receive the revenue
2) A single rateable occupier
a. Must be one rateable occupier if there were two then there would be 2 hereditaments
3) Capable of separate occupation
a. Must be shown that the property is capable of being separately let
4) Single geographical unit
a. Must be within the same curtilage i.e. could you cast a ring fence around the land
5) Single purpose
a. Cannot be used for 2 vastly different purposes, can one function without the other?
6) Single definable position
a. Must be a fixed position and not a moveable one for example an ice cream van

Question 33

What is contained at the start of a statement of case?

Answer 33

Statement of truth declaring the facts contained in the submission are accurate

Question 34

How long must a new occupant reoccupy before they are entitled to empty property relief?

Answer 34

6 weeks

Question 35

What is zoning?

Answer 35

This is a method of analysis typically used to reflect the higher value in which the shop front commands. This is due to the fact that the majority of purchases and customer footfall passes through this space.

Question 36

How would you analyse a rental figure using zoning?

Answer 36

A premises is split into distinctive zones typically 3 zones and a remainder each measuring 6.1m (20ft) in depth. Zone depth can change depending on locality in order to reflect the market. For example in London zone depths are 9.1m.

A rent is analysed by dividing it by the ITZA (in terms of zone A) which is calculated by measuring out each zone whilst dividing each zone back by a half. This will give an ITZA which is divided by the rent to give a zone A. Remainder or ancillary zones are typically measured to 25% or 10%.

Question 37

What is the difference between PICO and Mazars?

Answer 37

PICO established that an adjoining physical boundary can form a single hereditament whilst Mazars considered contiguity and the ability to pass through space without communal access

Question 38

What are the statutory decap rates?

Answer 38

2.6% for educational, healthcare and defence properties and 4.4% for other properties