Rating – Non-domestic rates – Hereditament – Respondent ratepayer proposing merger of two hereditaments in 2010 rating list – Valuation Tribunal for England (VTE) ordering merger at combined rateable value effective from when respondent took occupation of two hereditaments – Appellant valuation officer appealing – Whether proposal could also be used for a reconstitution which was otherwise out of time – Appeal dismissed
The appellant valuation officer brought an unopposed appeal against a decision of the Valuation Tribunal for England concerning two hereditaments known as Unit 1 front and Unit 1 rear, former MSP, Roman Way, Coleshill (the subject property) which had rateable values (RVs) of £30,500 and £44,750 respectively, entered in the 2010 list from 29 May 2014.
The subject property was approximately 10 miles to the east of Birmingham city centre, on the Coleshill Industrial Estate, Roman Way, Coleshill. The subject property originally appeared in the 2010 list as a single entry at a combined rateable value of £151,000 with effect from 1 April 2010. That entry was reconstituted with effect from 1 May 2010 into three. Following a further reconstitution with effect from 20 May 2014, unit 1 was reconstituted into two hereditaments. The hereditaments were contiguous but not interconnected, so the occupier had to exit one and cross a shared access way to enter the other.
On 1 June 2015, the respondent ratepayer took occupation of unit 1 front, excluding the offices, and unit 1 rear, excluding the canopy. On 1 October 2018, the office and canopy were demolished.
On 20 November 2019, the respondent made a proposal under regulation 4(1)(k) of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009, requesting the appellant to alter the 2010 rating list to merge unit 1 front and unit 1 rear into one hereditament from 1 June 2015 at RV £1. The appellant did not find the proposal well founded and the ratepayer appealed to the VTE.
The VTE ordered the merger of the two assessments at a combined rateable value of £56,500 with an effective date of 1 June 2015. The appellant appealed. The appeal was determined on written representations.
Held: The appeal was dismissed.
(1) The Non-Domestic Rating (Alteration of Lists) and Business Rate Supplements (Transfers to Revenue Accounts) (Amendment etc) (England) Regulations 2018 defined a relevant proposal as a proposal made by a ratepayer on the ground in regulation 4(1)(k) of the 2009 regulations which could only be made on that ground as a result of the coming into force of section 64(3ZA) or (3ZB) of the Local Government Finance Act 1988.
Section 64(3ZA) provided for two or more contiguous but not interconnected hereditaments in common occupation to be treated as one hereditament. However, the Supreme Court in Woolway (VO) v Mazars LLP [2015] UKSC 53; [2015] EGLR 56 precluded any proposal under ground 4(1)(k) of the 2009 regulations for merging the two hereditaments since, although they were contiguous, they were not interconnected and were therefore to be considered geographically separate.
The effect of that decision was reversed by the Rating (Common Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018, which amended the 1988 Act, and enabling secondary legislation in the 2018 regulations.
(2) In the present appeal, the respondent took occupation of the two hereditaments in June 2015, shortly before publication of the Supreme Court decision in Mazars on 29 July 2015. The appellant was not made aware at the time the ratepayer took occupation that their occupation did not extend to all parts of the two hereditaments. By the time the respondent’s proposal was made in November 2019, which drew the attention of the appellant to their partial occupation of the original hereditaments, the time for making alterations to the 2010 list had expired, with the exception of the extension provided in the 2018 regulations for relevant proposals under ground 4(1)(k). The appellant had a duty to maintain the 2010 list and the present appeal was an attempt to fulfil that duty.
The facts and the outcome in the decision of the VTE in RWE Generators v Valuation officer (Appeal no 4722530941245/285N10) (unreported) had some similarity with those in the present case and the decision provided a useful review of decisions which had considered the scope of a proposal. But that appeal arose from a proposal made under a different ground and provided no direct assistance in the present case.
The question was whether the proposal made by the respondent under the limited scope of the 2018 regulations could be used to order a reconstitution which was otherwise out of time.
(4) In Libra Textiles Ltd (t/a Boundary Mills Stores) and another v Roberts and another (VO) [2020] UKUT 237 (LC), the tribunal considered two proposals to alter the 2010 list which had been made under ground 4(1)(k) during the extension of time provided for by the 2018 regulations. The proposals concerned properties which were both contiguous and interconnected. Valid proposals could therefore have been made without the 2018 Act amendments, and the tribunal held that the proposals could not benefit from the extended window, so were out of time and invalid.
In rejecting the arguments of the appellants, the tribunal held that it flew in the face of the clear intention of parliament in enacting the regulation. Only those whose legal position was changed by the new provisions might make use of the as-if-amended 2009 regulations. There was no need to open the gateway wide enough to let in serendipitous applications that were not intended to benefit.
Libra Textiles provided clear guidance in the present case. The VTE, in refusing to order a reconstitution as well as a merger, focused on the scope of their jurisdiction and the basis of the proposal as worded by the respondent. The answer was simpler than that. The 2018 regulations provided an extension of time in which proposals for alteration of the 2010 list could be made by ratepayers whose legal position had been changed by the 2018 Act.
(4) The respondent in the present case met the criteria provided for by the amending legislation and made their proposal accordingly. The VTE correctly ordered that the 2010 list should be amended to ratify the agreed assessment for the merged hereditament. The reconstitution sought by the appellant was not provided for by the amending legislation so could never have been included within the scope of the respondent’s proposal. It was out of time and could not have been ratified by the VTE.
Eileen O’Grady, barrister
