Rating – Valuation – Alteration of rating list – Appellant owner of football stadium appealing against refusal of alteration of rating list – Whether relegation being material change of circumstances – Appeal dismissed
The appellant was owner and occupier of the DW Stadium in Wigan, which was the home of Wigan Athletic Football Club Ltd (the club), an associated company of the appellant.
The stadium was included in the 1995 rating list from 1 August 1999, at an initial value of £30,000, which was increased to £225,000 from 22 January 2000 when the club was in League One. In the 2000 rating list the stadium was given a rateable value of £305,000. In the 2005 list it was given a rateable value of £400,000, reduced on appeal to £294,000; at the antecedent valuation date (AVD) for that list, 1 April 2003, the club was playing in League One, but by 2005 it was in the Championship, finishing second in that division in the 2004-5 season and securing automatic promotion to the Premier League.
The stadium was entered in the compiled 2010 list at £1,500,000, which was reduced by agreement to £1,100,000. The club was relegated in 2013 from the Premier League to the Championship and then in 2015 from the Championship to League One. The appellant made proposals for the alteration of the list due to the cumulative effect of two relegations, with a material day of 16 December 2015.
An issue arose whether relegation amounted to a material change of circumstances so as to prompt an alteration of the local non-domestic rating list under regulation 4(1)(b) of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009. The valuation tribunal found that it did not. The appellant appealed, contending that, since its league status was crucial to the rateable value when the rating list was compiled, the list became inaccurate when it was relegated. The respondent pointed out that the link between ability to pay and league status was not so direct as the appellant stated. Attendance would vary considerably between clubs in the same league, as would broadcasting revenue.
Held: The appeal was dismissed.
(1) Paragraph 2(1) of Schedule 6 to the Local Government and Finance Act 1988 provided that the rateable value of a hereditament should be taken to be an amount equal to the rent at which it was estimated the hereditament might reasonably be expected to be let from year to year. The date by reference to which the determination was made in this case was 1 April 2008, being the AVD for the 2010 rating list, compiled on 1 April 2010; a new rating list was due to be compiled on 1 April 2015 but that was deferred until 1 April 2017, so that the 2010 list remained effective for seven years rather than the usual five.
Under regulation 4(1)(b) of the 2009 Regulations, the rating list might be altered where the rateable value shown in the list for a hereditament was inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list was compiled. A “material change of circumstances” was defined by regulation 3(1) as a change in any of the matters mentioned in para 2(7) of Schedule 6 to the 1988 Act: (a) matters affecting the physical state or physical enjoyment of the hereditament; (b) the mode or category of occupation of the hereditament; and (d) matters affecting the physical state of the locality in which the hereditament was situated or which, though not affecting the physical state of the locality, were nonetheless physically manifest there.
(2) On the basis of the information before the tribunal, the club was the only potential tenant. Football stadiums could not be valued by reference to comparable properties. There were no other stadiums like DW Stadium in the vicinity and no other potential tenants, and therefore no market. Football stadiums were valued for rating purposes on the basis of ability to pay. A formula, specific to football stadiums, had been agreed between ratepayers and the valuation office agency. An alternative would be the contractor’s basis of valuation which looked at the decapitalised cost of building an equivalent stadium; it was agreed that the football club as the unique tenant would not pay more than that cost, and therefore that the valuation would not exceed that which the contractor’s basis would yield.
(3) In the light of the way rateable value in respect of football stadiums was calculated, with attendance and income feeding into both the superfluity adjustment and the calculation of the reasonably maintainable total income from all sources other than transfer fees (FMT), the ability to pay of a Premier League club would far exceed that of a club in League One. However, that did not mean that the list should be altered. The policy of having a new list only every few years was dictated by the need for stability and the impracticability of having the list adjusted whenever economic factors meant that rateable value went out of date. The fact that the rateable value would be found to have changed, if calculated at the material day, was not relevant to the issue of whether there had been a material change within the meaning of para 2(7) of Schedule 6 to the 1988 Act so that an alteration could be made to the list: Merlin Entertainments Group Ltd v Cox (VO) [2018] UKUT 406 (LC); [2019] PLSCS 3 considered.
(4) Valuation methods did not differ between stadiums in different leagues. The valuation method used for football stadiums was consistent, although the elements in the calculation would differ between leagues. The differences in the conduct of the business of professional football between leagues were matters of degree. But the method was fundamentally the same (and very different from that used to value shops or public houses). The league made a difference, but it did not change the fact that the stadium was occupied for the purpose of playing football commercially. Football was football and a league was not a mode or category of occupation. A Premier League club and a League One club were regarded as in the same mode or category of occupation because playing professional football matches was the central activity and purpose of each. The appeal failed because there had been no material change in circumstances.
Jenny Wigley (instructed by DMH Stallard) appeared for the appellant; Hui Ling McCarthy QC and Sarah Sackman (instructed by HMRC Solicitor’s Office) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Wigan Football Co Ltd v Cox (VO)
