Recovering unpaid tax

July 5th, 2018 by James Goudie QC in Council Tax and Rates

Powys County Council v Hurst (2018) EWHC 1684 (Admin) was an appeal by way of case stated to a Divisional Court (Hickinbottom and Singh LJJ) against the decision of a District Judge (“DJ”) that the Council was required to consider proceeding under the Attachment of Earnings Act 1971 (“the 1971 Act”) as an alternative method of recovering unpaid council tax before applying to commit the Respondent to prison for non-payment of that tax. The DJ reached his decision on the basis that it was open to the Council to seek an attachment of earnings order in the County Court in respect of the Respondent’s pension. The main issue in the appeal was whether that course was open to a billing authority such as the Council as a matter of law. The Divisional Court held that it was not and allowed the appeal. Read more »


Rates Retention

March 5th, 2018 by James Goudie QC in Council Tax and Rates

The Non-Domestic Rating (Designated Areas) Regulations 2018, SI 2018/213, coming into force on 1 April 2018, form part of the scheme for local retention of non-domestic rates (“the rates retention scheme”). Their purpose is, to designate areas in relation to which a proportion of the non-domestic rating income raised is to be retained in its entirety by the local authority in all or part of whose area a designated area falls. The scheme was introduced on 1 April 2013 to give local government a direct share of local non-domestic rating income and thereby an incentive to promote local growth. These Regulations provide that when calculating how much rates income in a local authority area is to be shared between local government and central government, it will disregard the growth in rating income in designated areas. This will then allow the growth in those designated areas to be retained 100% by the billing authority. These Regulations designate further areas in which the 100% disregard will apply and provide rules for calculating the amount to be disregarded.


Rateable value

January 23rd, 2018 by James Goudie QC in Council Tax and Rates

Ascertainment of the rateable value of a non-domestic hereditament requires that each individual hereditament should be individually assessed and the application of a hypothesis. If the property is in rateable occupation at all, the rateable value is taken to be an amount equal to “the rent at which it is estimated the hereditament might reasonably be let from year to year” on the three assumptions set out in paragraph 2 of Schedule 6 to the Local Government Finance Act 1988.  Read more »


Council Tax

August 7th, 2017 by James Goudie QC in Council Tax and Rates

The doctrine of res judicata applies in respect of Valuation Tribunal decisions only where there is close alignment of the parties and the factual or legal issues determined in the decisions: Okon v Lewisham LBC (2017) EWHC 1933 (Admin).



Service of notice

June 19th, 2017 by James Goudie QC in Council Tax and Rates

In UKI (Kingsway) Limited v Westminster City Council (2017) EWCA Civ 430 the appeal concerned the formal validity and service of a completion notice under Schedule 4A to the Local Government Finance Act 1988 (“the 1998 Act”) delivered by the respondent, Westminster City Council (“the respondent” or “the billing authority”), on 5 March 2012 in respect of premises on the 3rd-6th floors of a building at 1 Kingsway, London WC2 (“the premises”). The completion notice purported to bring the premises into the 2010 rating list with effect from 1 June 2012. Read more »


Services of Payment Notices

March 8th, 2017 by James Goudie QC in Council Tax and Rates

In Serpes v City of London, Judgment on 2 March 2017, the Court held that demand notices for non-domestic rates, reminder notices, and summonses, were all served properly at the appellant’s last known address, in accordance with Section 233 of the Local Government Act 1972.  It was immaterial that she did not in fact receive them.  There had been no procedural impropriety or unfairness.  The Council was not obliged to make inquiries to discover her location.  If she wished to be served at another address it was for her to inform the Council accordingly.  Liability for the rates had not necessarily passed to someone else.


Rateable Value

March 7th, 2017 by James Goudie QC in Council Tax and Rates

Section 56 of the Local Government Finance Act 1988 (“LGFA 1988”) incorporates Schedule 6 to LGFA 1988. Schedule 6 sets out the statutory basis on which the rateable value of a non-domestic hereditament is determined.  It sets out statutory assumptions for determining rateable value. What is required is an assessment of “the rent at which it is estimated the hereditament might reasonably be expected to be let from year to year”. The hereditament means the hereditament, as a whole, not part or most of it.  So emphasized in Hobbs v Gidman (VO) , (2017) UKUT 63 (LC).


Rateable Value

March 2nd, 2017 by James Goudie QC in Council Tax and Rates

Does a commercial building which is in the course of redevelopment have to be valued for the purposes of rating as if it were still a useable office. Paragraph 2(1) of Schedule 6 (“Non-domestic rating: valuation”) to the Local Government Finance Act 1988, as amended by the Rating (Valuation) Act 1999, provides that the rateable value of a property is an amount equal to the rent at which it is estimated it might be expected to be let from year to year, subject to the assumption, in para 2(1)(b), that, immediately before the tenancy begins, the property is in a state of reasonable repair, but excluding from that assumption any repairs which a reasonable landlord would consider uneconomic. The issue of general public importance to the law of rating and valuation in Newbigin (Valuation Officer) v SJ & J Monk (2017) UKSC 14 was whether a property should be rated in accordance with the para 2(1)(b) assumptions or in accordance with its physical condition on the relevant date for determining rateable value on an application to alter the rating list.  On that date the property was stripped to a shell in the course of renovation works.  The Supreme Court held, allowing an appeal from the Court of Appeal, that the property had been stripped out beyond reasonable repair and should be rated as a “building undergoing reconstruction” and the rateable value reduced to the nominal amount of £1 from £102,000, not on the assumption that it was in reasonable repair as “offices and premises”. Read more »


Non-payment of Council Tax

January 23rd, 2017 by James Goudie QC in Council Tax and Rates

In R (Woolcock) v Bridgend MC (2017) EWHC 34 (Admin) Lewis J quashed a suspended committal order, pursuant to Regulation 47 of the Council Tax (Administration and Enforcement) Regulations 1992, because no proper means assessment had been carried out and the suspension period was manifestly excessive.  Lewis J said:-

“27.   The general principles governing the making of an order under regulation 47 of the Regulations are relatively well established in the case law.  For present purposes, the material principles are these.  First, the power to commit is intended to be used to extract payment of the debt not to punish the debtor.  Secondly, it is clear from the terms of the regulation that the magistrates’ court must conduct a means inquiry in the presence of the debtor and must consider whether the failure to pay is the result of wilful default or culpable neglect.  Thirdly, an order may be made if, but only if, the debtor is guilty of culpable neglect or wilful default. The means inquiry will need to consider the period or periods in respect of which liability is due in order to determine, amongst other things, whether non-payment is the result of culpable neglect.  Further, the means inquiry will need to consider the present position of the debtor to enable the magistrates’ court to determine whether the debtor is in a position to pay the debt and the magistrates’ court will need to consider what enforcement options are available to it to secure payment of the debt: …

  1. In the present case, in my judgment, there has not been a proper and adequate inquiry into the Claimant’s means. First, such an inquiry will need to consider income and expenditure to determine what the reasonable disposal income of the debtor was in relation to the periods in question. …
  2. Secondly, in my judgment, the magistrates did not carry out an adequate assessment of means for the purpose of determining whether to commit for non-payment, or to remit part or all of the debt. … They needed to determine whether or not the Claimant could make such payments or whether part or all of the debt should be remitted …
  3. Thirdly, the period of suspension for payment of the debt should not be an unreasonable or disproportionate period. If the period for repayment is unduly long, a suspended committal may be unlawful. Thus, the courts have indicated that periods of suspension in excess of 3 years are likely to be excessively long and so unlawful: …”

“38.    … The magistrates’ court failed to carry out a proper and adequate means inquiry as required by regulation 47 of the Regulations and were not in a position to determine if non-payment was the result of culpable neglect nor whether the orders were appropriate mechanisms for enforcing the debt. Further, the period of suspension was manifestly excessive and disproportionate. …”


Local Government Finance Bill

January 16th, 2017 by James Goudie QC in Council Tax and Rates

This Bill, introduced in the House of Commons on 13 January 2017 (Bill 122), and which applies in England only, follows the Government’s announcement, in October 2015, that, by the end of the present Parliament, local government would retain 100% of locally raised taxes. The changed system is also designed to strengthen incentives for local authorities to grow their business rate income.

The Bill is made up of four parts:-

Part 1: Local Government Finance Settlement

Local retention of non-domestic rates – provides a framework to allow local government to retain 100% of non-domestic rates.

Local government finance settlement – replaces the yearly local government finance settlement with a multi-year settlement.

Council tax referendum principles – replaces the yearly council tax referendum principles with multi-year principles Read more »