Rating – Alteration of list – Effective date – Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulation 2009 – Appellant’s hereditament erroneously omitted from rating lists – Respondent valuation officer altering 2005 list by including that hereditament so as to correct inaccuracy – Regulation 14 of 2009 Regulations – Effective date of alteration – Whether date when list first compiled or later date of alteration – Effective date held to be date of list pursuant to regulation 14(2) – Appeal dismissed
The appellant owned a large Victorian house in London SW5, which contained 19 self-contained units used for short-term holiday letting. The property had been so used for many years before the respondent acquired it in 2007, although it was not known exactly when that use had commenced. Prior to 2011, the premises were not included in any non-domestic rating list and were instead treated as a domestic dwelling. In March 2011, the respondent valuation officer altered the 2005 rating list to include the premises as a new hereditament, described as “self-catering holiday unit and premises”, with a rateable value of £104,000 and an effective date of March 2008, that being the date on which the respondent erroneously believed the relevant circumstances to have first existed.
The appellant made a proposal, under regulation 4 of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulation 2009, to delete the entry in its entirety. The respondent rejected that proposal and the appellant appealed to the Valuation Tribunal for England (VTE).
Before the VTE, the parties agreed that the rateable value for the purposes of the 2005 rating list should be £62,500 and that the appeal should be allowed to that extent. However, they did not agree on the effective date from which the respondent’s alteration should take effect. By that time, the respondent was arguing that the effective date should be April 2005, as the date when the list first came into force. The appellant contended that the effective date was March 2011, as the date on which the entry itself had been made, and that, since that date fell outside the period of the 2005 rating list, the premises should be deleted from that list entirely.
Ruling in favour of the respondent, the VTE held the case was governed by regulation 14(2) of the 2009 Regulations, applying to alterations made to correct an inaccuracy in the list, such that the effective date was “the day on which the circumstances giving rise to the alteration first occurred”. It interpreted that expression to mean the first day within the period of the list on which the hereditament met the criteria for inclusion and it consequently determined the effective date as April 2005. It rejected the appellant’s primary submission that, where the date of commencement of the holiday letting use could not reasonably be ascertained, regulation 14(2) did not apply and the position was governed by regulation 14(5)(b), such that the effective date was the date on which the alteration in the list was made. The appellant appealed.
Held: The appeal was dismissed.
(1) The purpose of regulation 14 was to identify a date from which an alteration in the rating list was to have effect. Such an alteration could not take effect before the earliest date on which the rating list itself had effect. However, regulation 14(2) contemplated that a list might be inaccurate on the date on which it was compiled. Regulation 14(2) therefore had to be construed in such a way as to accommodate the making of an alteration in the list with effect from that date. It followed that “the circumstances giving rise to the alteration” should be taken to include the fact that the list had been compiled and contained an inaccuracy. Although some of the relevant circumstances that ultimately gave rise to the inaccuracy might have existed before the compilation of the list, the existence of those circumstances could not be said to make the list inaccurate, or to give rise to an alteration to correct an inaccuracy, until the list itself was compiled. Accordingly, when considering when the circumstances giving rise to the alteration first occurred, the earliest point in time at which all of the circumstances could be said to have occurred was the date of compilation. It was the compilation of the list, and the inclusion in it of an inaccuracy, that completed the circumstances giving rise to the alteration required to correct that inaccuracy.
Where a list was said to be inaccurate by reason of a change of circumstances that had already taken place by the date of its compilation, it made no difference whether or not the date when those circumstances changed was reasonably ascertainable. In both cases, the list could be said with assurance to have been inaccurate on the date when it was compiled. In both cases, but for the failure to appreciate that a prior change of circumstances had occurred, the list would have been accurate on the date of its compilation. There was therefore no reason why knowledge of the date on which the relevant circumstance first occurred should be critical to the date from which the correction of the inaccuracy was to take effect. The VTE had correctly dismissed the appellant’s primary argument on that issue.
(2) The valuation officer’s first awareness of circumstances demonstrating an inaccuracy in the list could not itself be one of the circumstances giving rise to an alteration within the meaning of regulation 14(2), so as to render the alteration effective from the date of such awareness. Such an approach would introduce an unintended element of uncertainty and capriciousness into the process of ascertaining the effective date of an alteration.
(3) Finally, the case could not be regarded as falling within regulation 14(7)(b), so as to make the effective date that of the alteration. Regulation 14(7)(b) applied to an alteration made to correct an inaccuracy for which the appellant was not responsible, which arose in the course of making a previous alteration and which increased the rateable value shown in the list for the hereditament to which the inaccuracy related. The alteration in the instant case did not meet those criteria. The alteration in the list was not made to correct an inaccuracy that had arisen in the course of making a previous alteration. The valuation officer’s change of position before the VTE could not regarded as a relevant “alteration” because of the definition of alteration in regulation 3 as “an alteration of a list in relation to a particular hereditament”. Further, the valuation officer’s change of position related not only to the effective date, but also to the rateable value shown in the list, and secured a reduction in that value rather than an increase.
Myriam Stacey (instructed by Collyer Bristow LLP) appeared for the appellant; Hui Ling McCarthy (instructed by the legal department of HM Revenue and Customs) appeared for the respondent.
Sally Dobson, barrister
