The issue in Nuffield Health v Merton LBC (2021);EWCA Civ 826 was whether Nuffield Health, a registered charity, was entitled to mandatory relief from non-domestic rates in respect of its occupation of fitness and well-being centres, notwithstanding that membership fees at market rates were payable. The statutory basis of the claimed relief was that (1) it was a charity, as Nuffield Health is, or the trustees of a charity, AND (2) the hereditament was used “wholly or mainly for charitable purposes”, as defined in the Charities Act 2011, that is “for the public benefit”. The Court considers the public benefit test.

Hurstwood Properties v Rossendale BC (2021) UKSC 16 relates to the attempted avoidance of liabilities for business rates on unoccupied properties. The Supreme Court concludes (para 49) that the persons entitled to possession of an unoccupied property on whom the liability for rates is imposed does not encompass a company “which has no real or practical ability to exercise its legal right to possession” and “:on which that legal right has been conferred for no purpose other than the avoidance of liability for rates.”

In R (SoS) v Harlow District Council (2021) EWHC 909 (Admin) Kerr J sets out, in Annex A, a checklist of 12 propositions of law as to when premises are occupied for rating purposes, and, in Annex B, a 13 item Protocol for resolution of disputes about occupation of premises.

An alteration to the rating list which consists of the deletion of an hereditament can be made for a temporary period ending when the circumstances which justify the deletion cease to exist. It cannot however be restored with a different rateable value that is not within the scope of the ratepayer’s deletion proposal. So held in Sykes v Great Bear Distribution Ltd (2020) UKUT 238 (LC ).

Appeal in the cases noted in this Bulletin on 6 November 2019 have been dismissed : (2020);EWCA Civ 1017. Asplin LJ said at para 46 : “ … the authorities do not support the proposition that a transaction should not be regarded as genuine or a scheme should be considered to be contrary to the public interest on the grounds that their effects might be considered by some to be socially reprehensible.” At para 48 she said : “ Nor can it be relevant that each of the sequence of events is pre-determined…the pre-determined use of an SPV to which assets are transferred is a familiar feature in many corporate reconstruction schemes. Taking time in advance, to decide which steps to take, cannot of itself render the steps themselves contrary to the public interest.” At paragraphs 54-57 she said that once it is accepted that a step is genuine and not a sham, “ it cannot be undermined by the motive behind its creation.” The fact that the purpose for which a transaction has been entered into can be characterised as artificial in no way invalidates the transaction if it is not a sham. The fact that a device has been adopted in order to avoid legislative consequences cannot be taken into account in construing a document to find out what the true nature of the transaction is. One has first to find out what is the true nature of the transaction and then see whether and if so how the legislation operates upon that state of affairs. Floyd and Newey LJJ agreed.

ATMs installed inside and outside supermarkets and shops are not separate hereditament. They remain in the rateable occupation of the retailers, not of the parties which operate them. So has the Supreme Court held in Cardtronics v Sykes (2020) UKSC 21. It is analogous to the situation of a lodging house. There is a single hereditament in the rateable occupation of the landlord.

MHCLG has issued Guidance on relief to council tax payers in response to COVID-19 pursuant to Section 13A (1) (c) of LGFA 1992, funded by Government under Section 31 of LGA 2003.

ATOS v FYLDE BOROUGH COUNCIL (2020) EWHC 647 ( QB ) is concerned with the liability, or rather non-liability, of persons for non-domestic rates in circumstances where the person said to be liable does not occupy the entirety of the hereditament in the relevant rating list, and part is let to others. Saini J reviewed the statutory framework and case law at paras 23-68 and gave his main conclusion at paras 69-75 : essentially rateable occupation has to be exclusive occupation. The Judge approved Ryde on Rating : “ if the whole building is entered in the rating list as one hereditament, no one tenant is liable for the rate of the whole, because he is not the occupier of the whole, nor can he be compelled to pay the rate on the part he occupies…”

The 11 March 2020 Budget documents include Terms of Reference for a “fundamental” Review of the Business Rates System, setting out the Review’s objectives, scope and governance, with a view to the Review reporting in Autumn 2020.  An objective is to improve the current system, and to consider more fundamental changes in the medium-to-long term, including alternatives to business rates.  The scope will not consider the overall level of funding for local government.

In McGrath v Camden LBC (2020) EWHC 369 (Admin) a Divisional Court held that the Council’s omission to serve on ratepayers information specified by Schedule 4 to the Business Improvement Districts (England) Regulations 2004, S.I. 2004/2443, made under Section 49 of the Local Government Act 2003, at the same time as serving a demand notice for payment of a BID levy in Hampstead Village did not render the demand invalid. The statutory liability to pay the levy is not qualified by reference to any legislative requirement other than service of a demand notice.  Moreover, there is a distinction in Schedule 4 between what is required to be “contained in” a demand notice and what is required to be “supplied with” a demand notice.

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