Rating Thing to know

Question 1

What is the effective date, when is it ?

Answer 1

The date from which the hereditaments RV is effective for billing purposes.

In the 2017 list the compiled list date is this is the 1st April 2017 meaning all hereditaments were effective from this date.

However if any changes to RV occur or property is brought out of list then they will be effective from the new date that changes occurred.

Question 2

IF we have incorrectly valued an assessment at the material day what happens.

Answer 2

This is known as a complied list error as the list has been created with this error.

Any change in RV will be recoded in the list and a new effective date made to reflect the changes in RV.

If the RV has gone up we do a date of schedule increase meaning the effective date is the date of amendment.

Occupier is not back charged for historical error.

Question 3

What is the material day

Answer 3

The day at which the Matters discussed in sch 6 para 2(7) are taken to account for valuation purposes.

Question 4

What is the AVD and when is it

Answer 4

AVD is the anticedal valuation date. It is on the 1st of April 2015 for the 2017 rating list.

It is the date in which economic circumstances are taken in to account for valuation purposes.

these include;

Inflationary trends

Changes in distribution of money between sectors and regions

Interest rates

Peoples attitudes

State of the market

Question 5

What is a hereditament

Answer 5

S64 LGFA describes a hereditaments liability for rates. Hiowever case law of Glbert v Hicking bottom and Woolway v Mazars better define the parameters of the hereditament.

Question 6

What is the ratable occupier

Answer 6

S43 to 46 describe a occupier’s lability to pay rates but not the ratable occupier.

J lang and sons v Kingswood provide the best explanation with

• Actual occupation
• Excusive occupation
• Beneficial occupation
• Degree of transience

Question 7

What is transitional relief and how is it calculated?

Answer 7

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

Base liability – amount payable previous list year
Notional charge amount – amount payable this list
Appropriate fraction – percentile applied for change can be found on VOA webiste

Question 8

How is RV calculated ?

Answer 8

RV x UBR (uniform business rates) / number of days in financial year X number of days occupied.

Question 9

What is uniform business rates ?

Answer 9

This is a single tax rate % that applies to all properties in England. it is based of RPI index.

Question 10

How would you value a composite hereditament

Answer 10

Would value as domestic and non domestic. The split would be dependent on the average usage for the area based on a hypothetical tenancy.

As different occupier likely make use of different amounts of space and varying amounts throughout the year averaging use space is the fairest way to establish a RV based on a hypothetical tenancy.

Question 11

what is a domestic property

Answer 11

Section 66 defines aS66(1) of the LGFA 1988 defines a domestic dwelling as one used wholly for the purposes of living.

Question 12

What are issues with the domestic borderline.

Answer 12

1)
LGFA and council tax regulations are conflicted in the dealing with appurtances so they are generally dealt with on case by case basis.

2)
Weather a property is domestic or non domestic is fairly straight forward.

Appurtenance (an accessory or other item associated with a particular activity or style of living.)

However issues occur with typically with appurtenance . When assessing weather an appurtenance is domestic or non domestic 2 questions need to be asked.

a) Is it within the curtilage of the domestic property.
b) what is the use ? ( if it is not used wholly for purpose of living then it is non domestic - this can include sheds and boat houses that are not used for bussiess purposes but the fact they are not used wholly for living makes them liable for rates instead of council tax.

Recent case law would include Corkish v Bigwood 2019 where it was determined that the size of horse stales was irrelevant because the occupier only used them for personal purposes and were within the curtilage of their estate.

Question 13

What types of domestic borderline properties fall under section 66 of LGFA

Answer 13

Hereditaments that serve the purpose of providing temporary accommodate when primary residence is else where.

• Hotels - have separate section
• short stay holiday lets have special rules
• property’s with under 6 bed spaces have separate rules.

I would consult legislation for more information on these types of hereditament.

Question 14

Can you name some common rating reliefs ?

Answer 14

Small business rate relief - £12,000 exempt/ £16,000 sliding scale / £59,999 separate multiplier

Empty property rate relief

Embassy relief

Stud farm relief

charitable relief - 80% up to 100% on BA

Transitional relief

Question 15

A gym and a where house built next to each other. They have very similar specifications and the main difference in on the mode and category of occupation ?

How would you approach this valuation ?

Answer 15

I would follow the market and rental evidence available.

If there is a discount or premium in the ppm2 on the mode and catorogry of occupation this needs to be accounted for in your adopted tone.

If there is no difference they can be placed in same scheme and tone.

The same rules applies for hereditaments falling into different planning classes.

Question 16

What is a schedule of works ?

Answer 16

Where works are being done to a hereditament which in effect makes the hereditament incapable of beneficial occupation and unable to rate.

Question 17

When is the next AVD

Answer 17

Was scheduled for 2021 however has now been pushed back to 2023.

Question 18

What are the three valuation methods used in rating ?

Answer 18

1) Comparable
2) Contractors
3) Profits

Question 19

What is a completion notice and where can I find more information, what is the time frame, can it be appealed

Answer 19

LGFA sch 4A

A notice the VOA can serve to an owner of a newly constructed property to prevent the party avoiding the payment of rates by not completing the construction of the building

A proposed completion day when the building is deemed to be completed. Typically done in 3 moth before creating lability.

yes it can be appealed.

Question 20

How may weeks of occupation does it take for a property to re-qualify for empty rates relief?

Answer 20

6 weeks

Question 21

What anti-avoidance measures are in place?

Answer 21

VOA can disregard the changed state of a property when assessing RV if the owner damaged the property as an attempt to stop paying rates. But must be capable of beneficial occupation.

Question 22

How are public houses valued ?

Answer 22

1) can be done of subject rent if rent is OMV and clean.
2) more typically however it is done of R+E method.
3) A Fair maintainable trade is established leading up to the and on the AVD.
4) The public house is then categorized into group 1 2 or 3 depending on wet trade which is dependent on its location and other factors discussed in the approved guide.
5) quality of food is examined and placed into band A or B.
6) stand back and look to see if you agree.

Question 23

What types of property are found in central rating list

Answer 23

Large utility company’s, railways, under ground, telecom

Question 24

What is a incorporeal hereditament

Answer 24

Generally non tangible but are generally ratible and exist in there own right

advertising rights
easements
licenses
tolls or rights of toll
rights of accsess

Question 25

What is the cooperate veil, how diose it effect rating practice ?

what is the relivant case law for rating

Answer 25

Cooperate veil comes from cooperate law and generally means that an entity/ business/ occupier needs to be judges as it is. This is put in place in business to protect shareholders.

In rating the VOA is not allowed to look under the cooperate veil. That is for a judge to decide on a case by case basis if they feel it is necessary.

For rating purposes Westminster City Council v Southern Railway Co (1936) HL 24 RIT 278 provides the best guidance

Step 1 Establish Contiguity - do they actually connect are they separate.

Step 2 are they fully independent - are business functions independent ? Are they physically separate ?

Step 3 - Are they separate legal entity’s. Do they have separate leases ? are they separate companies by law ?

Step 4 - who has ratable occupation

Question 26

What is meant by Deminimus

Answer 26

Refers to the fact and degree of which a residential hereditament may be used for non domestic purposes before becoming liable for rating.

Not set rules but indication are ;

• use test - what is the use of the area after the working day ends ?
• Do clients and employee’s come and go from the area?