In Rossendale BC v Hurstwood Properties and Wigan Council v Property Alliance Group (2019) EWCA Civ 364 actions by local authorities seeking to recover National Non-Domestic Rates from property developers in respect of unoccupied hereditaments were struck out where the developers had set up schemes to avoid the payments involving transferring leases of the properties to special purpose vehicle companies.  The Ramsey principle of purposive interpretation of the statutory scheme did not apply and there was no reason to pierce the corporate veil.

These appeals concerned two schemes. Both schemes involved the grant of leases of properties to SPVS without assets or liabilities which, as part of the scheme in question, were then placed in voluntary liquidation or were allowed to be struck off the register of companies as dormant companies and thus dissolved. Read more »

In Alam v Valuation Officer (2018) UKUT 266 (LC) Mr Alam is the proprietor of the restaurant.  He took a lease of a Property. His agents submitted a proposal to reduce the rateable value of the Property.  In their proposal they stated correctly that Mr Alam was the occupier of the Property but also stated that the Property was “owner/occupied”.  The proposal was completed in that way because of a misunderstanding between Mr Alam and his agents.  As a result, the agents did not include any information in response to the question “if not owner/occupied, is a rent or licence fee paid?” and, in particular, did not state the rent payable, the date it had first become payable and the date of the next rent review. All of this was information required by Regulation 6(3) of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 (“the 2009 Regulations”).  The issue in Mr Alam’s appeal to the Upper Tribunal (Lands Chamber) concerned the consequence of the mis-statement of the capacity in which Mr Alam occupied the Property and the omission of any information about the rent payable.  The Valuation Tribunal for England (“VTE”) found that the proposal was invalid, explaining: Read more »

In Merlin Entertainments Group Ltd v VO (2018) UKUT 406 (LC) the Upper Tribunal was concerned with whether there had been a material change of circumstances under paragraph 2(7)(d) of Schedule 6 to the Local Government Finance Act 1988.  It was held that there had not been such a change. The change (a fall in visitor numbers at Alton Towers following a fatal crash) was not a matter which was “physically manifest” in the locality of the hereditament on the relevant day.

Paragraph 2(7) enacts the physical state and user limbs of the reality principle, in relation to both the hereditament and its locality. Regulation 2(7) sets out the factors to which the reality principle applies. They include, (d), matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless “physically manifest” there. One of the issues which arose was whether a purely economic matter can fall within paragraph 2(7)(d). Read more »

Liability for non-domestic rates depends on a property being entered as a hereditament in the rating list. Section 46A of and Schedule 4A to the Local Government Finance Act 1988 (“the 1988 Act”) create a completion notice procedure, by which a new building that has not yet been occupied may be brought into the rating list. Where a completion notice has been validly served the building to which it relates is deemed to have been completed on the date specified in the notice. It is then shown in the rating list as a separate hereditament, valued as if it were complete, and its owner or occupier becomes liable to an assessment for non-domestic rates.

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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 »

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.

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 »

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).

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 »

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.