Non-domestic rates has, for most of its history, been a tax on the occupation of property. The relatively recent concept of taxing unoccupied property has led to a number of legal disputes, of which London Borough of Newham v RAD Phase 1 Type B Property Company No.1 Limited  UKUT 0203 (LC) is the latest. The case concerns a Completion Notice, a procedure for deeming new buildings that are unoccupied, and may be unfitted, to be considered complete, so as to make the building owner liable for empty rates.
The building concerned was a 120,000 square foot office building forming part of the redevelopment around the Royal Albert Dock in East London. The building was completed in 2019 to category A condition, but as no tenant had been found, it was not fitted out. The Local Government Finance Act 1988 allows the local authority, in such circumstances, to serve a Completion Notice, the effect of which is to deem the property concerned to be complete such that it is considered capable of being occupied and to require the Valuation Officer to enter it into the rating list, which in turn has the effect of making the building owner liable for empty rates. Such a notice may specify a completion date not more than three months from the date of the notice.
In this case the appellant, London Borough of Newham, served such a Notice in June 2019, setting a completion date of 25 September 2019. The respondent, the building owner, appealed against the Completion Notice to the Valuation Tribunal for England (VTE). The VTE was advised by its clerk that it did not have the power to determine a completion date that fell more than three months after the date of service of the completion notice, and that, if it determined that the works required to complete the building would take more than three months, then it should quash the completion notice. The VTE, having decided that those works would take more than three months, decided to quash the completion notice. The local authority appealed to the Upper Tribunal against that decision.
Before the Upper Tribunal was due to hear the case, the parties informed the Tribunal that they had agreed a completion date of 11 May 2020, a date that is some 11 months after the date of service of the completion notice. The case proceeded by way of written representations, the appellant contending that the legislation provided that the VTE completion date could be “such day as the tribunal shall determine”, which did not imply any restriction on the date that the VTE could determine. The legislation also allowed the parties to agree a completion date, again without any restriction that such a date must be within three months of the date of the completion notice.
The appellant also contended that legislation gave the VTE no power to quash a completion notice. The legislation provided that the VTE could dismiss an appeal against a completion notice, or could determine a completion date, but did not give power to quash a notice.
The Tribunal found that there is “nothing to prevent the parties agreeing, or the VTE determining, a date outside of the three-month period specified for the purposes of the initial notice”.
The Tribunal also found that the VTE has no power to quash a completion notice. The options open to the VTE in hearing an appeal against a completion notice are “to dismiss the appeal and confirm the date in the completion notice, or to determine an alternative date”. The billing authority’s appeal was allowed. As the parties had agreed a completion date there was no need to remit the case to the VTE and the agreed date of 11 May 2020 was determined.
At first reading, it may seem odd that the outcome of an appeal against a completion notice could be the determination of a completion date that would have been outside the scope of the completion notice itself. We wonder whether this will lead to such notices being served “speculatively”, when buildings are clearly more than three months away from completion, with a view to agreeing a completion date. The attempt to use a tax on the occupation of property (non-domestic rates) has produced a number of “through the looking glass” outcomes over the years, and it seems possible that this could be another of these.