Factory and warehouse assessed together

The Upper Tribunal (Lands Chamber) has determined that a factory building and a warehouse building on sites separated by a public highway, but linked by a substantial conveyor bridge form a single hereditament for rating purposes. The Tribunal’s decision applied the geographical test set out by the Supreme Court in Woolway (VO) v Mazars [2015] and concluded that the three elements of property occupied by the ratepayer, the factory, the warehouse, and the conveyor bridge, should realistically be regarded as a single unit of property. The Tribunal’s decision also dealt with the issue of valuation arising from the finding that these elements formed a single hereditament, and applied an end allowance of 7.5% to reflect the split nature of the site. ...Read More

Rates mitigation schemes were “shams”

The High Court has found that licences made in respect of two properties in Cardiff were sham transactions, designed to avoid a liability for empty rates, rather than being made with the intention of being implemented. The Court also found that, in both cases, the landlord of the property concerned was in rateable occupation, and was liable for empty rates, rather than the alleged licencee. The decision in Queen Street Properties Ltd and Another v Cardiff City Council [2022] is the latest in a growing line of cases disputing the effectiveness of different empty rates mitigation strategies. In these latest cases, the company that purported to be the ratepayer was dissolved, but the District Judge, and the High Court on appeal, found that in both cases the landlord company was in rateable occupation. ...Read More

Assessment of retail unit reduced

The Upper Tribunal (Lands Chamber) has allowed an appeal by the ratepayer of a retail unit in Upper Street, Islington. The Tribunal determined that the Zone A value for the unit should be reduced from £2,100 per square metre to £1,800 per square metre and that a 5% allowance should be made to reflect the irregular shape of the unit. ...Read More

Restrictions on business rates appeals become law

The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 received the Royal Assent on 15 December 2021. The non-domestic rating section of this Act is enacted to provide that matters attributable to coronavirus that may not be taken account of in determining rateable values for the current rating lists. The purpose of the Act is effectively to quash appeals made against current rateable values for the effects of the COVID-19 pandemic, and the restrictions associated with the pandemic. The non-domestic rating section of the Act relates to both England and Wales and has retrospective, as well as current, effect. ...Read More

Completion Notices found invalid

The Upper Tribunal (Lands Chamber) has found that Completion Notices, served by a local authority to deem a property complete for the purposes of charging empty rates, were invalid in circumstances where the completion date set by the notices was before the date of service of the notice. Because the effect of the notice was to create a liability for tax on a counter-factual basis, this required strict compliance with the regulations, rather than simply “substantial compliance”. This decision will be of interest to local authorities, who serve completion notices, and to the owners of ne, unoccupied, buildings, on whom these notices are served. ...Read More

Consultation on proposed business rates changes

The Department for Levelling Up Housing and Communities and HM Treasury have issued a “technical consultation” which sets out how the government intends to give effect to measures arising from the business rates review, the conclusions of which were reported at the Autumn 2021 Budget. The technical consultation covers measures designed to enable more frequent revaluations, together with proposed measures for new rates relief, firstly, for property “improvements” and secondly for investment in green plant and machinery. The changes proposed in the consultation will place significant new burdens on ratepayers, by way of requirements to report changes to properties or to property tenure, and will also impose new restrictions on ratepayer’s rights of appeal. The consultation package contains some measures that will be welcome to ratepayers, but also many that will not. ...Read More

Data centre space held rateable

The Upper Tribunal (Lands Chamber) has determined an appeal concerning rateable occupation of data halls at a computer centre. The issue in the appeal in Ricketts (VO) v Cyxtera Technology UK Ltd was whether “white space” in the data halls formed part of the hereditament by virtue of being capable of beneficial occupation for its intended purpose. The Tribunal’s determination was that the space did, indeed, form part of the hereditament, but that it must be complete and capable of operation in order to form part of the hereditament. The Tribunal’s decision will be significant for owners and occupiers of new buildings of this type, and for Valuation Officers faced with the task of bringing new buildings into the rating list. ...Read More

Autumn Budget 2021

The Chancellor has announced a freeze in the business rates multiplier in England for 2022/23, as part of his Autumn Budget statement. He has also announced a limited extension to current COVID-related business rate reliefs for next year. But the “Fundamental Review” of business rates, announced by the Government in its Spring Budget 2020, has been reduced to a rearrangement of the deck chairs on the Titanic. The outcomes suggest it should now be considered as “The Review, formerly known as Fundamental”… ...Read More

Rating assessment of offices reduced on appeal

The Upper Tribunal (Lands Chamber) has allowed in part an appeal against the rating assessment of offices in Chinatown in central London. The Upper Tribunal’s decision relied heavily upon the evidence of rents paid for other offices in locality, and preferred this to evidence of the assessments of other offices, which the Tribunal considered to be in a different location to the appeal property. ...Read More

Rateable values reinstated following temporary reductions

The Court of Appeal has dismissed an appeal by a ratepayer, and allowed an appeal by a Valuation Officer, in respect of the powers of the Valuation Tribunal for England, and of the Upper Tribunal (Lands Chamber) to order alterations to the rating list for limited periods only. This decision will mean that ratepayers, and their advisors, will have to consider what action they take to protect their position in cases where any adjustment to rateable value ordered by a Tribunal might be for a limited period only. ...Read More