The calculation of rateable value for office premises undergoing refurbishment is to come under Supreme Court scrutiny.
Lords Neuberger, Wilson and Carnwath have granted solicitors firm SJ & J Monk – which was initially successful in its Upper Tribunal (Lands Chamber) case that secured a nominal rateable value of only £1, before the Court of Appeal overturned that decision – permission to appeal in the case.
In the February decision, a valuation officer’s appeal was allowed, the court finding that the works being carried out fall within the definition of “repair”, and that the Upper Tribunal was wrong to rule that the refurbishment – which includes reconfiguration as three separate units – went beyond that.
Lewison LJ said that it is the nature of the works that is determinative of what constitutes repair, not the intention of the owner, and considered that the VOA Rating Manual is wrong to have regard to the question of intent.
He said that this violated the long-standing principle: “The rateable quality of land is not to be determined by what it once was, or by what it may hereafter become.”
The case centres on the valuation of offices on a single floor of a three-storey block known as Avalon House at Sunderland Enterprise Park. The property stood vacant since 2006 and in March 2010 the owner entered into a contract to carry out improvement works, including the removal of all internal elements other than the lift and the staircase enclosure. The works also included construction of new common parts to the first floor and reconfiguration as three new letting units. The refurbishment was being carried out at the key date for rating purposes of 6 January 2012.
The freehold owner, solicitor SJ & J Monk, won a ruling from the Upper Tribunal that the premises at that date were not capable of beneficial occupation as offices, and that the rateable value – formerly £102,000 – should be assessed at the nominal amount of £1.
Newbigin (Valuation Officer) v SJ & J Monk Ltd Supreme Court (Lords Neuberger, Wilson and Carnwath)
