Rating – Non-domestic rates – Alteration to rating list – Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005 – Appellant valuation officer making alteration to list to show respondent’s premises as single hereditament – Valuation tribunal deciding that alteration to take effect from date when respondent notified of alteration rather than earlier date of change of circumstances on which alteration based – Regulation 14 of 2005 Regulations – Whether discretion existing to specify effective date for alteration other than date of relevant change of circumstances – Appeal allowed
The respondent occupied three workshop units in a modern building at a marina in Pwllheli, Gwynnedd, from which it ran a powerboat sale and repair business. Although it had first taken leases of two units in February 2009 and a third in February 2010, its current arrangements dated from the first day of February 2011, when it had exchanged one of its existing units for a different one. The three units were contiguous but there was no internal access between them.
Each of the respondent’s units had originally been listed separately in the 2010 rating list; however, in September 2011, the appellant valuation officer altered the rating list to show them as a single hereditament, with effect from the last day of January 2011; he later acknowledged that that was a mistake and that the effective date should be one day later, on the first day of February, when the change of circumstances that prompted the alteration had taken place.
The respondent was concerned at the effect of the alteration on the amount of his entitlement to small business relief. He submitted a proposal to restore the three separate hereditaments that had previously existed. That proposal was rejected by the appellant and by the Valuation Tribunal for Wales (VTW) on appeal. The VTW upheld the appellant’s alteration to show the respondent’s premises as a single hereditament; however, it decided that, in the interests of fairness, the alteration should take effect only from September 2011, when the respondent was notified of the alteration, rather than the earlier effective date entered by the appellant.
The appellant appealed on that issue. He contended that, on a proper application of regulation 14 of the Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005, the alteration had to take effect from the day on which the relevant change of circumstances justifying the alteration occurred and that there was no discretion to specify a later date.
The 2005 Regulations were in the same terms as their English counterpart so far as they related to the issue on the appeal.
Held: The appeal was allowed.
Regulation 14 of the 2005 Regulations was the only source from which the effective date of an alteration to a non-domestic rating list could be identified and it dealt exhaustively with that issue. There was no provision in the statutory scheme for the exercise of a general discretion as to the effective date, whether based on fairness, reasonableness or any other consideration. The general rule laid down by regulation 14(2) was that an alteration made to correct any inaccuracy in a rating list on or after the day it was compiled had effect from the day on which the circumstances giving rise to the alteration first occurred. Accordingly, unless one of the exceptions in subparas (3) to (7) of regulation 14 applied, the only relevant date that it was necessary to identify was the date on which the change of circumstances giving rise to the alteration first occurred. The date on which notice of an alteration was given to the occupier of the hereditament under regulation 17 could not be the date from which the alteration took effect unless one of those subparagraphs so provided.
In the instant case, the change of circumstance justifying an alteration in the rating list was the commencement of occupation of the relevant premises by the respondent on the first day of February 2011. That change took place after the date when the current rating list was first compiled. When the change took place, the list became inaccurate. The appellant therefore came under a duty to make an alteration in the list to correct the inaccuracy when he became aware that the premises had come to be occupied as a single unit.
None of subparas (3) to (7) applied so as to displace the general rule that would cause the alteration to take effect from February 2011. Subparas (3) and (4), concerning completion notices served in respect of a new building, had no relevance to the case. Subpara (5) applied only where the day on which the relevant circumstances arose was not reasonably ascertainable, whereas there was clear evidence in the instant case to establish that date. Subparagraph (7), precluding further alterations to a list more than 12 months after the compilation of the next list, was equally inapplicable. As to subpara (6), that applied only to alterations to correct an inaccuracy in the list that was present on the day when it was compiled, or which arose out of a previous alteration. The respondent’s current premises were not a single hereditament when the list was compiled in April 2010 since, at that date, they were in separate occupations. Although the list might have been inaccurate at that date by reason of the failure to show the units then occupied by the respondent as a single hereditament, that inaccuracy had ceased to exist in February 2011 when the respondent swapped units; consequently, the alteration made by the appellant in September 2011 was made not to correct the original inaccuracy but rather to put right a different inaccuracy. Nor was the alteration made to correct an inaccuracy arising out of a previous alteration; accordingly, neither limb of subpara (6) applied.
Cain Ormondroyd (instructed by the legal department of HMRC) appeared for the appellant; the respondent did not appear and was not represented.
Sally Dobson, barrister