In Corkish (Listing Officer) v Wright [2014] EWHC 237 (Admin), a statutory appeal from a Valuation Tribunal, the issue for the Tribunal had been whether an annex was part of a building which was constructed or adapted for use as separate living accommodation, so as to be amenable to a separate charge for council tax.  Popplewell J derived the following principles from the authorities:

(1) The question is whether the effect of the construction or adaptation is such as to make the relevant building or part of a building reasonably suitable for use as separate living accommodation. What matters is its fitness for that purpose by reference to contemporary standards of what is reasonable, not merely whether it might conceivably be used for such purpose however remote the possibility.

(2) The question is to be answered by reference to the physical characteristics of the building. This is sometimes referred to as a “bricks and mortar test”, but the epithet does not accurately capture the wide range of physical characteristics which may be of relevance including services and fixtures.

(3) This is an objective test. The test is not concerned with when, how or why those characteristics were achieved. The purpose of the construction or adaptation is irrelevant. The test is addressed to the result of the building work, not the circumstances in which it was carried out. Intention is irrelevant.

(4) Whether the test is met is a matter of fact and degree for the Tribunal.

(5) Actual use may in some cases be of some relevance. However actual use is not the test, and even in cases where it may be of some relevance it will not usually be a factor of significant weight. At most it may reinforce a decision reached by reference to the physical characteristics of the building.

(6) If what is being considered is part of a building, the physical characteristics to be considered include those of the remainder of the building as well as the part being considered. Access is one aspect of such characteristics. Separate public access may be a pointer to the part being separate living accommodation; whereas if access is through the remainder of the building this may tell against the part being separate living accommodation. In the latter case different weight may be attached where access is through the living areas of the remainder of the building from the weight to be attached where it is through a hallway. But access is not a factor which can be determinative without considering the other physical aspects of the building. The weight to be attached to it is a matter for the Tribunal.

The Local Authorities (Standing Orders) (England) (Amendment) Regulations 2014, SI 2014/165, made by the Secretary of State pursuant to Sections 8 and 20 of the Local Government and Housing Act 1989, and amending the Local Authorities (Standing Orders) (England) Regulations 2001, SI 2001/3384, were laid before Parliament on 31 January 2014 and will come into force on 25 February 2014.  The Amendment Regulations are “localism” in reverse, imposing “best practice”.  They require that the votes at key budget decision meetings by local authorities are recorded, something of course which it is already open to local authorities to do.  There is a diktat that in the Minutes of such meetings there must be a record of how each member present voted on the budget ie voted on the council tax or the issuing of the precept in the case of precepting authorities.  Moreover, the Explanatory Notes state (para 8.3) that CLG’s “expectation” is “that all councils will follow this practice at their budget meetings even where these are held in advance of the practice becoming mandatory”.

The Non-Domestic Rating (Designated Areas) Regulations 2014, SI 2014/98 form part of the scheme for local retention of non-domestic rates.  The purpose of the Regulations is to designate areas in relation to which a proportion of the non-domestic rating income (as calculated in accordance with the Regulations) is to be retained by the local authority all or part of whose area falls within the designated area.

The Non-Domestic Rating (Small Business Rate Relief) (England) (Amendment) Order 2014, SI 2014/43 (“the 2014 Order”), amends the Non-Domestic Rating (Small Business Rate Relief) (England) Order 2012 (“the 2012 Order”) to provide for a temporary extension to the increase in small business rates relief in England until 31 March 2015 and to extend the scope of the relief where small businesses expand.

The 2012 Order prescribes the conditions for eligibility for small business rate relief and the rates of relief in relation to eligible hereditaments.  A hereditament is only eligible where it is the sole hereditament occupied by the ratepayer, but additional hereditaments are disregarded where their rateable value is not more than £2,599 and the aggregate rateable value of all hereditaments occupied by the ratepayer does not exceed £25,499 if situated in Greater London or £17,999 if situated outside Greater London.  The 2014 Order substitutes new provisions for Articles 3(6) and 4(7) of the 2012 Order so that where a ratepayer starts to occupy an additional hereditament, the ratepayer does not lose the benefit of the relief for the first 12 months of occupation.

Where the eligibility criteria are satisfied a ratepayer’s daily liability for non-domestic rates in respect of that hereditament is determined under Section 43(4A) of the Local Government Finance Act 1988.  Section 43(4A) provides for the calculation in accordance with the formula (A x D) divided by (C x E) where: A is the rateable value of the hereditament; D is the small business non-domestic rating multiplier for the financial year; C is the number of days in the financial year; and E is such amount as is prescribed in relation to the hereditament by the Secretary of State by Order. Article 4 of the 2012 Order prescribes the amount of E for the financial years beginning on 1 April 2012 and 2013 and Article 3 of the 2012 Order prescribes the amount of E for subsequent financial years.

The 2014 Order amends the 2012 Order to apply Article 4 of the 2012 Order to the financial year beginning on 1 April 2014.  The effect of this amendment is to extend the temporary doubling of the level of small business rate relief for a further year.  Article 4 will also continue to apply in respect of days falling within the financial years which started on 1 April 2012 and 1 April 2013.

The purpose of the Billing Authorities (Anticipation of Precepts) (Amendment) (England) Regulations 2014, SI 2014/35, is to enable billing authorities in England making council tax calculations in accordance with Section 31A of the Local Government Finance Act 1992 (“the 1992 Act”) to anticipate a precept from a local precepting authority.  The legislative context is that Sections 73 to 79 of the Localism Act 2011 (“the 2011 Act”) made amendments to the calculations which billing authorities, major precepting authorities, and local precepting authorities in England must make to determine their basic amounts of council tax for a financial year. The obligation to calculate a budget requirement for a year was replaced with an obligation to calculate a council tax requirement. Under the new provisions an authority’s council tax requirement for a financial year is the amount the authority requires from council tax alone in order to finance its budget for the year and this amount is used to calculate the authority’s basic amount of council tax. Section 74 of the 2011 Act inserted a new Section 31A into the 1992 Act requiring a billing authority to calculate its council tax requirement each financial year, and Section 32 of the 1992 Act was modified to apply to Wales only rather than to England and Wales. The Regulations make a minor amendment consequential on the changes made by the 2011 Act to update the definition of “calculations” in the Billing Authorities (Anticipation of Precepts) Regulations 1992 in relation to England to refer to the new Section 31A inserted by the 2011 Act.. This will enable billing authorities in England making their calculations in accordance with Section 31A of the 1992 Act to anticipate a precept from a local precepting authority under Section 41 of the 1992 Act if that precept has not been issued in time for their calculations.

The Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2014, SI 2014/2, has been made in exercise of the powers conferred by paragraph 5(3) of Schedule 7 to the Local Government Finance Act 1988 (“the 1988 Act”). In relation to England and for the financial year beginning on 1st April 2014 (“2014-15”) the Order specifies an amount which is to be used in the calculation of the non-domestic rating and the small business non-domestic rating multipliers for that year.

Schedule 7 to the 1988 Act establishes a procedure by which the non-domestic rating and the small business non-domestic rating multipliers are calculated for a chargeable financial year. In relation to England and a year at the beginning of which new rating lists are not compiled, the small business non-domestic rating multiplier is calculated in accordance with paragraph 3 of Schedule 7 to the 1988 Act. The non-domestic rating multiplier for the year is then calculated in accordance with paragraph 3A of Schedule 7 to the 1988 Act by reference to that multiplier.

The calculation in paragraph 3 of Schedule 7 to the 1988 Act includes a variable referred to as “B”. Unless an order made by the Treasury provides otherwise, B is the retail prices index for September of the financial year proceeding the year concerned, which in relation to 2014-15 was 251.9.  Paragraph 5(3) of Schedule 7 to the Local Government Finance Act 1988 enables the Treasury by order to specify a different amount for B. Where the Treasury exercises this power the amount specified must be less the retail prices index for September of the financial year proceeding the year concerned.

For 2014-15 the Order specifies B as 249 for the purposes of paragraph 3 of Schedule 7 to the 1988 Act. This represents a 2% cap.  Otherwise the figure would have been 3.2%.

Premises will be “wholly or mainly used for charitable purposes”, for the purposes of assessing whether a registered  charity is entitled under Section 43(6)(a) of the Local Government Finance Act 1988 to mandatory charitable relief from non-domestic rates only if the charity makes extensive use of the premises for charitable purposes.  In Public Safety Charitable Trust v Milton Keynes Council [2013] EWHC 1237 (Admin) Sales J held that merely some charitable use of the premises was not enough, following Kenya Aid Programme v Sheffield City Council [2013] EWHC 54 (Admin).

Does the fact that no more than a minute fraction of the area encompassed within premises is used (by the presence of blue-tooth apparatus) prevent occupation being rateable occupation?  No, holds Wilkie J in Sunderland City Council v Stirling Investment Properties Ltd [2013] EWHC 1413 (Admin).  Wilkie J further holds, applying Arbuckle Smith v Greenock Corporation [1960] AC 813, that it is not relevant, for the purpose of rateable occupation, that the nature of the use to which the hereditament is put is different than that which was described in the rating list. There is nothing in the legislation which limits the ability of a local authority to levy rates to occupation for a purpose which is identical to the description of the hereditament in the rating list. The issue of any apparent disconnect between the nature of the occupation of an hereditament and its description in the rating list is a matter for the valuation officer to address if he thinks that a new, or additional, hereditament may have been brought into existence.

In R (Stirling) v Haringey LBC (2013) EWCA Civ 116 the Court of Appeal were concerned with a claim for Judicial Review of the Council’s Council Tax Reduction Scheme pursuant to Section 10 of the Local Government Finance Act 2012 and Regulations thereunder, replacing Council Tax Benefit.  The Council were required to, and did, publish a draft Scheme and consult upon it, against the background of a 10% reduction in the funding given by Central Government to local authorities for council tax support.  The challenge was as to the consultation process.

There were three grounds: (1) that consultees were not provided with sufficient information to enable them to appreciate that there were alternatives to the draft scheme;  (2) that the information provided in the Consultation Document, as to the shortfall that would have to be met by the Council, was not accurately and fairly presented; and (3) that the Council should have told consultees about the Transitional Grant Scheme (“TSG”), and asked them if they wished to make any, or any further, responses in the light of the availability of that Scheme.  The second ground was not pursued in the Court of Appeal.

Dismissing the first ground, Sullivan LJ said, at paragraph 15:

“It is one thing to say that when options for change are presented in a consultation paper … they must be fairly presented, it is quite another to submit … that in order to be fair a consultation paper must present information about other options that have been rejected. What fairness requires depends on the circumstances of the particular case. In some statutory contexts a decision maker may be required, or may choose to consult as to which of a number of options should be adopted.”

However, Sullivan LJ continued, in paragraph 16, alternatives to a preferred scheme do not in all cases have to be mentioned as having been rejected.  At paragraph 18, Sullivan LJ stated that, in the particular statutory context, fairness did not require the Council, in the consultation process, to mention other options which it had decided not to incorporate into its published draft Scheme.  Much less did fairness require that the Consultation Document contain an explanation as to why these options were not incorporated in the draft Scheme.  At paragraph 19, Sullivan LJ went on to say that, evenif the statutory scheme had been less prescriptive and more open-textured as to the subject matter of the consultation process, he would not have concluded that the Consultation Document’s failure to mention the other possible ways of meeting the shortfall in Central Government funding rendered the consultation process unfair. The existence of the three options relied upon by the Appellant – raising Council Tax, reducing other Council services or utilising some of the Council’s reserves – were all reasonably obvious ways of meeting a shortfall in Central Government funding, and the form of the Consultation Document did not prevent consultees from suggesting them as possibilities. This was not a case in which the failure to mention the three options in the Consultation Document might have had the consequence that the decision-maker would have failed to appreciate their existence. The full Council would have been well aware of these three ways of meeting a shortfall in Central Government funding.  

Dismissing the third ground, the Court of Appeal held that the change of circumstance constituted, in the public domain, by the TSG, though plainly relevant, was not a change of such significance that the Council was bound to draw attention to it, or to commence the consultation process afresh.

Two new Statutory Instruments, the Council Tax Reduction Schemes (Prescribed Requirements) (England) Regulations 2012, SI 2012/2885, and the Council Tax Reduction Schemes (Default Scheme) (England) Regulations 2012, SI 2012/2886, make provision for the new, localised, council tax support schemes in England, which come into effect on 1 April 2013.  They replace council tax benefit.  All billing authorities in England are required to have their own scheme.  The Default Scheme Regulations make provision for a default scheme that will apply to those billing authorities that have not made their own scheme by 31 January 2013.  Otherwise all schemes made by authorities, approved by Full Council, must include those matters that are prescribed in the Prescribed Requirements Regulations, as well as those matters which are required to be included in local schemes by paragraph 2 of Schedule 1A to the Local Government Finance Act 1992, as inserted by the Local Government Finance Act 2012, section 10 and Schedule 4.