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The decision of the Upper Tribunal (Lands Chamber) in Sykes (VO) v Great Bear Distribution Limited [2020] UKUT 0238 (LC) concerns the procedural provisions for altering rating lists as part of the determination of rating appeals. The respondent ratepayer acquired a large, modern, purpose-built warehouse, on an estate north of Nottingham, in 2014. Following the acquisition, the ratepayer carried out works to the property, which included demolition of an office building, and undertaking alterations to the dock-level doors. During these works the property was incapable of beneficial occupation.
The ratepayer made a proposal seeking to delete the assessment of the property during the works, on the basis that it was incapable of beneficial occupation. The Valuation Officer did not accept the ratepayer’s proposal and the matter was referred to the Valuation Tribunal for England (VTE) for determination. When the matter came before the VTE, in 2019, the Valuation Officer accepted that the property was incapable of beneficial occupation during the works, between June and October 2014, but asked the VTE to exercise a discretionary power to reduce the assessment to nil value during the period of the works only. The Valuation Officer accepted that this would result in the original rateable value for the property (rateable value £825,000) being reinstated into the rating list from the date the works were completed. It was accepted by both parties that this assessment was not correct and that, following the works that had been carried out, the property should correctly be assessed at rateable value £745,000.
The Vice President of the VTE, who heard the matter, declined to exercise the discretionary power under Regulation 38 of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009, on the basis that, to do so, would result in an assessment that was acknowledged to be inaccurate being restored to the rating list. The Valuation Officer appealed against the VTE’s decision to the Upper Tribunal.
The first issue before the Upper Tribunal was whether the discretionary power to order an alteration to the rating list for a temporary period only could be applied when the alteration concerned arose from a proposal to delete a rating list entry. The Valuation Officer contended that there was no reason to restrict the application of the discretionary power under regulation 38 (7). The ratepayer contended that the earlier assessment should, properly, be deleted, and that to create a new assessment for the property was a separate, and distinct, alteration to the rating list.
The Upper Tribunal considered that, for the purposes of the application of this discretionary power, there was no reason to make a distinction between an alteration arising from a proposal to delete an assessment, as opposed to one made to reduce the assessment to a nominal figure. The language of the regulations did not require any such limitation, and there was no reason to employ such a restriction, which would simply make more difficult the task of maintaining an accurate rating list. In principle, therefore, it was open to the Tribunal to make the alteration sought by the Valuation Officer.
The respondent contended that it was, however, not open to the Tribunal to use Regulation 38 to restore the hereditament to the rating list, but at a different rateable value. The Valuation Officer contended that such an alteration, to a different rateable value, was within the powers of the Tribunal as a matter “ancillary” to the alteration itself. The Tribunal determined that the powers granted under Regulation 38 did not include power to restore the hereditament to the rating list at a different rateable value.
The Tribunal considered that it was not in the public interest to use the discretionary power granted under Regulation 38 in a manner that would result in an entry in the rating list that was “significantly inaccurate”, particularly in circumstances where it had been within the power of the Valuation Officer to make an accurate entry in the list. The Tribunal therefore dismissed the Valuation Officer’s appeal and declined to make an order restoring the hereditament to the rating list at its original rateable value.
The significance of this decision for practitioners is in clarifying the application of the discretionary power granted to tribunals (including the VTE and the Upper Tribunal) to order rating list alterations for a temporary period only. It is clear that the tribunal is not limited to a strict interpretation of the scope of the original proposal when considering exercising this power, but that this broader discretion cannot be extended to alterations that result in the rating list entries that are significantly inaccurate.
