Rating – Non-domestic rates – Hereditament – Appellant valuation officer appealing against decision of Valuation Tribunal for England (VTE) ordering deletion from rating list of entry for respondent’s warehouse – Whether VTE having power to delete entry from list for temporary period – Whether tribunal having power to restore hereditament to list with different rateable value – Appeal dismissed
In June 2014, the respondent acquired a modern purpose-built warehouse on an industrial estate at 4 Freeston Drive, north-west of Nottingham. Between June and October 2014, it carried out a programme of works comprising the demolition of an office block which formed part of the warehouse hereditament and alterations to its dock-level doors. During that period the property was incapable of beneficial occupation and was therefore deleted from the rating list. The respondent resumed occupation on 4 October 2014 on completion of the works.
Prior to the works, the appeal property was shown in the rating list with a rateable value of £825,000. The parties agreed that, as a result of the works, that assessment became inaccurate and that the correct rateable value ought to be £745,000.
In February 2015, the respondent submitted a proposal that the existing entry be deleted with effect from 16 June 2014 on the grounds that the property had been demolished and no longer existed and that the assessment was therefore incorrect. The appellant valuation officer did not consider the proposal to be well founded, and it was transferred to the valuation tribunal (VTE) as an appeal against his refusal to alter the rating list.
The VTE declined to exercise its power under regulation 38(7) of the Valuation Tribunal for England (Council Tax and Ratings Appeals) (Procedure) Regulations 2009 that the deletion be temporary and that the entry be restored from the date the works were completed. It was agreed that the rateable value of £825,000 was no longer accurate and the VTE took the view that it had no power to alter the rateable value as part of a temporary deletion, nor was it prepared to restore the hereditament to the list at a rateable value which was agreed to be too high. The appellant appealed.
Held: The appeal was dismissed.
(1) For the purpose of regulation 38(7), a distinction had to be made between an alteration which was the result of a deletion proposal and an alteration which followed a proposal to reduce the rateable value of the hereditament to a nominal amount. Nor did it matter whether the deletion and restoration were viewed as distinct alterations to the list or whether there was only one alteration which was made for a temporary period. In each case an alteration or series of alterations was made to the list to reflect circumstances which existed for a temporary period; there was no good reason to curtail the general power conferred by regulation 38(7), as suggested by the respondent, so that it was not available in relation to certain alterations. The language of the regulation did not require any such limitation, there was no reason to imply one and to do so would simply make the power a less useful one and the task of maintaining an accurate list more difficult. Therefore, in principle it was open to the VTE to direct that an alteration which consisted of the deletion of a hereditament should be for a temporary period ending when the circumstances which justified the deletion ceased to exist: Avison Young Ltd (formerly GVA Grimley Ltd) v Jackson (VO) [2020] UKUT 58 (LC); [2020] PLSCS 30 applied.
(2) Following the deletion of the hereditament from the list, it was for the appellant to make a new entry reinstating the property when it became capable of beneficial occupation. It was not within the scope of the deletion proposal for the property to be re-entered in the rating list with a different rateable value. That was consistent with the statutory scheme which made the entry of a hereditament into the rating list a separate ground for making a proposal to alter the list.
The power to direct that an alteration be made for only a temporary period could not be extended to the making of further substantive alterations which did not fall within the scope of the proposal which gave rise to the primary alteration. The power under regulation 38(7) could not be used to restore a hereditament to the list, after a temporary deletion, with a different rateable value to that which it had at the time of the original alteration unless the rateable value of the restored hereditament was within the scope of the proposal which gave rise to the alteration.
(3) The jurisdiction of the VTE and of the Upper Tribunal on an appeal against a valuation officer’s refusal to give effect to a proposal was limited to the issues raised by the proposal. The appellant did not lack the powers necessary to make the required amendments to the list to ensure that it remained accurate. Nor was the fact that in this case no steps were taken to enter a correct rateable value for the hereditament in its condition after completion of the works capable of influencing either the scope of regulation 38(1) or the scope of the respondent’s proposal itself.
(4) The VTE had no power to restore the hereditament to the list with a different rateable value. The only alteration which followed from acceptance that the ratepayer’s proposal was soundly based was simply the deletion of the hereditament. The VTE had power to order that deletion be temporary, but the effect of that direction would simply be that the assessment would return to the list unchanged. The entry of a significantly lower rateable value was not a matter ancillary to the temporary deletion.
The VTE was right not to make an order which would result in the list being significantly inaccurate when it had been within the power of the valuation officer to enter an accurate valuation and he had failed to do so within the period allowed: Leda Properties Ltd v Howells (VO) (2009) RA/62/2006 and Jackson (VO) v Canary Wharf Ltd [2019] EGLR 31 applied. Hughes (VO) v York Museums and Gallery Trust [2017] UKUT 200 (LC) considered.
Matthew Donmall (instructed by HMRC Solicitor) appeared for the appellant; Daniel Kolinsky QC (instructed by Mills & Reeve LLP) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Sykes (VO) v Great Bear Distribution Ltd
