Rating/Local taxation Flashcards
What are business rates?
A national taxation on non-domestic subjects collected locally.
What is rating?
A form of taxation on the occupation of Non-Domestic Properties.
Define NAV.
Net annual value is the rental value that is paid year on year, from a hypothetical tenant to a hypothetical landlord, assuming that the tenant is responsible for all repairs.
What is the definition of rateable value?
Rateable value is an amount equal to the rent it is estimated that the hereditament would be let at on a tenancy from year to year assuming:
1. The day on which the tenancy begins is the day at which the determination is to be made.
2. The property is in a good state of repair excluding any repairs that a reasonable landlord would deem uneconomic to undertake.
3. The tenant is responsible for bill and taxes and all repair and insurance costs as well as any other expenses required to maintain the hereditament.
What are some relevant legislation in relation to rating?
The Lands Valuation (Scotland) Act 1854, The Valuation and Rating (Scotland) Act 1956, Local Government Scotland Act 1966, Local Government Finance Act 1975, The Valuation for Rating (Plant & Machinery) (Scotland) Regulation 2000, The Non-Domestic Rates (Scotland) Act 2020.
Summarise the current rating list and your knowledge of any upcoming revaluations.
The last revaluation was in 2023, based on levels of value from the tone date of 01 April 2022. The next revaluation will be in 2026, based on the tone date of 01 April 2025.
What is the Woolway case regarding?
Woolway v Mazars relates to offices occupied by Mazars on the 2nd and 6th floor of an office building. This case was whether this formed one or two separate assessments. This went to the Supreme Court in 2015 who decided that contiguous units need to be interconnected and easily accessed by one another. As the two floors could be let separately they were functionally independent. No exceptional factors with regard to enjoyment were present.
Can you explain the Burns Stewart Distillers Limited v Lanarkshire Assessors 2001 case?
The Lands Tribunal for Scotland held that the 2 subjects should not be treated as unum quid as the 2 subjects were separated by a common public road and neither of the subjects were reliant upon each other in order to operate and function, even although they were occupied by the same occupier.
What legislation governs plant & machinery?
Valuation for Plant and Machinery (Scotland) Regulations 2000.
What are the four classes of Plant and Machinery?
- Power generation e.g. cables, conductors and wind turbines.
- Services to a property e.g. heating, cooling and supplying water.
- Rateable infrastructure e.g. including lifts and railway tracks.
- Process plant such as fixed cranes, masts and tanks.
How do you know what plant & machinery is rateable?
Rateable items of plant and machinery not already reflected in the rental rates should be dealt with in terms of the Valuation for Rating (Plant & Machinery) (Scotland) Regulations 2000 as amended and valued with reference to the Rating Cost Guide.
How would you value Plant and Machinery?
Typically using the contractor’s method of valuation. Air conditioning, however, can be valued on rate psm.
Can you give me an example of P&M you have rated?
Yes, I have valued stills, tanks and malt bins in relation to a distillery.
I recorded the items on site and referred to the cost guide when valuing these, to get their cost at time of tone. This was then decapitalised to give me the annual equivalent figure.
What are the current Decap rates?
2.9% for schools, churches and hospitals. 4.6% for all other subjects.
Explain what tests you would consider when determining the unit of valuation.
- Geographical Test
- Functional Test
- Capable of being separately let
- Terms of letting.
Explain the Geographical test.
The geographical test is one of the criteria used to determine whether a property or a part of a property is a separate unit or hereditament for the purpose of paying business rates.
Looks at whether the property or the part of the property is physically separate from other parts of the same building or complex.
Explain the Functional test.
A consideration in deciding whether subjects which are physically disconnected should nevertheless be treated as unum quid.
Looks at whether the association between two buildings or parts of buildings are necessary for the use of the subjects.
When can the assessor change the roll?
- Error
- Material Change of Circumstances
- New Entry
- Deletion of Entry.
What regulations give the assessor the power to alter the roll?
Local Government Scotland Act 1975.
What lands and heritages aren’t included in the Valuation Roll?
- Dwellings
- Agricultural Properties
- Sewers
- Public Roads
- Fish Farms
- Places of religious worship.
Where do you get costs from for a contractor’s valuation?
- SAA cost guide
- BCIS Cost Guide
- Actual costs from developer.
Would you use unit costs or actual costs?
Unit costs.
What is tone of the roll?
Tone of the roll was established in the Local Government Scotland Act 1966. It requires that when you are make any new or altered entry to the roll, you must value them as though they had been available in their present state at the revaluation.
What are the 5 classifications of error?
- Measurement
- Clerical
- Survey
- Classification
- Arithmetical.
