Could you please explain the need to retain a full valuation list even if all or certain classes of property occupiers no longer have to pay rates.
Rateable values are primarily recorded for rating purposes, but frequently the rateable value is used as a measure for some other purpose related to statutory or non-statutory matters. Many historic examples can be given, such as the formulae contained in the 1957 Rent Act for calculating the old “controlled rents”.
This article is not intended to be comprehensive, but the editor would be interested in trying to establish a full history of all legislation making reference to rating assessments other than the legislation specifically relating to “rating”, “rates” and their “collection”. In particular the future need for maintaining the valuation list in full for domestic properties is a matter that will have to be seriously considered in the event of domestic rates being replaced in part or full by a “community” or “poll” tax.
The matters which follow are not in any specific order of importance.
Landlord and Tenant Act 1954. This act makes frequent reference to “rateable value”, both under Part I dealing with long leases of residential property and Part II dealing with business tenancies and the payment of compensation where an application for the grant of a new tenancy is turned down by the courts. The assessment also affects whether a case under Part II should be referred to the county court or the High Court.
The Rent Acts and related legislation rely extensively on “rateable value” assessments for assessing the type of tenancy or level of protection that a tenant of residential property enjoys. Thus, even after the introduction of a poll tax, it will still be necessary for the valuation office to continue to assess residential property. That is to value new property, and to revalue improved or extended properties. Such exercises will presumably be on the basis of 1973 tone of list. Unless this work continues, or amending legislation is passed, then all lettings of new residential properties not assessed would automatically fall outside Rent Act protection by default, because there would be no rateable value, or they could become protected if the courts ruled that no listing implied a zero rateable value. It seems essential that this point be covered by community tax legislation.
The list is also used by rent officers when determining “fair” rents simply because rating assessments are a reflection of an independent opinion of relative values for different units of residential accommodation. Thus, given two flats in the same building, one with an RV of £180, the other an RV of £190, then the acceptance by both parties of a fair rent for Flat A might lead to a pro rata determination for Flat B.
In certain residential and commercial service charge clauses services are apportioned by reference to rateable values. Because the RV has been independently assessed, many feel this is a fair method of apportionment. A new wing added to an existing block of flats might therefore have to be assessed in the future, even after abolition of domestic rates, simply because the existing lease makes reference to rateable values for service charge apportionment purposes.
The Leasehold Reform Act is also dependent for its operation on the maintenance of the valuation list. Without the list it would be difficult to establish whether a tenant on a long lease is, or is not, entitled to enfranchise. New premises must be assessed, otherwise again a grant of a long lease would fall outside the provisions by default.
Compulsory purchase. A number of Acts of Parliament cover the subject of compensation on compulsory acquisition. Some are dependent in part on the presence of the valuation list. Gross value has on occasions been used to limit compensation payable on the acquisition of unfit houses. It is also used for determining compensation for proprietors of houses in multiple occupation.
Rateable values are used as the base figures for calculating “well-maintained payments” and “home loss payments”.
Under the Town and Country Planning Acts there is a rateable value limit referred to in connection with blight notices.
Other rates. The calculation of water, drainage and environmental rates are in many areas based on rateable values. So, again, unless all properties, especially new homes, are going to switch to metered water supplies, the valuation office will have to continue to assess and reassess residential property in order for the water boards to be able to collect their charges.
Less well known are those cases where reference is made to rateable values — for example, in the case of post offices and doctors’ surgeries where apportioned rateable values are used to decide contributions made towards the cost of the “business” part of the premises. Should rates be abolished, then it might be necessary to devise some other method of apportionment. Typical problem areas here are those residential properties where part is used as a doctor’s surgery or sub-post office.
The Administration of Justices Act 1970 uses rateable values to limit the jurisdiction of the county courts.
The replacement of domestic rates with community taxes may raise issues as to ability to pay. In the past, rateable values have been used in rate rebates schemes — there is no reason why they should not be used as a measure for other social services schemes.
Non-statutory uses of the valuation list include use by housing authorities when working out fair rents on a relative basis. They have been used for all manner of apportioning exercises. For example, the sub-division and subletting of a single let property leave landlords and subtenants with doubts as to the current apportionment of responsibility for the head rent. In such situations rents are frequently apportioned on a pro rata basis according to rateable values.
Housing Acts. Frequent reference is made in the Housing Acts to rateable values. A typical example is the use of rating assessments for determining eligibility for improvement and similar grants.
Other uses. The records themselves held by the valuation office provide the nation with the nearest complete record of all properties in the United Kingdom. These records include details of all properties in terms of location, type, nature of use, size, construction and layout. The irregularity of revaluations means that the record is not a true record, but its potential as an historic record should not be overlooked nor should its potential for valuable research. As a general rule these records, other than the information contained in the valuation list, cannot be used or referred to without statutory powers.
Nevertheless, without these records the costs of fulfilling many statutory functions would escalate. For example, in probate cases it would become necessary for every property to be inspected to confirm its value, whether or not it was a case falling beneath the dutiable limits. Currently, considerable distress to relatives is avoided because the records are there for the Inland Revenue to refer to. They are frequently the only useful records for resolving 1965 values for CGT purposes, for establishing use classes for planning purposes at dates in the past.
These, then, are just a few reasons why, even if the rating system in whole or part is abandoned, there may be only a limited reduction in the amount of work undertaken by the valuation officers of the Inland Revenue. Our initial view, after only limited researches, suggests that for many years to come it will be necessary for the valuation list to be maintained, even though certain classes of rateable occupiers may cease to pay rates as such.
