A High Court judge has ruled that even “whimsical or eccentric” use of a property qualifies as ‘occupation’ when calculating non domestic rates.
The case was brought by Public Health England over a £2.5m bill for non-domestic rates and is the latest judgment in a string of disputes between tenants and councils over local charges.
The dispute is over the Glaxo Smith Kline building in Harlow, Essex, which PSE bought in 2017 as its future headquarters.
In March 2018 the council sent PHE a bill for non domestic rates for £2.5m for the 2018-19 financial year.
The building wasn’t yet occupied, but consultants advised PHE that if they could occupy the building for a continuous period of six weeks and then stop using it, they would qualify for a three-month rebate on non-domestic rates.
PHE stored some documents and equipment in the building and showed it to the council to claim a rebate. The council refused saying that the level of occupation wasn’t enough to qualify for a rebate.
However, in a ruling handed down earlier this month, High Court Judge Mr Justice Kerr disagreed.
“Actual use of a property, even minimal use as in this case, combined with intention to occupy is sufficient for occupation, whether the motive is rates mitigation or any other motive.
“The use need not be substantial… It need not be legally required. It may be whimsical or eccentric. It must serve a purpose to the occupier but that purpose can be obtaining a future rates exemption,” he said in the judgment.
He ruled that the council must repay PHE the overpaid tax.
In his ruling he said that “what constitutes occupation of premises for non-domestic rating purposes [has been] explored in many cases down the years”.
Therefore, he said, he added two annexes to the judgment that should be used to reduce the need to take cases to court.
“If it is not followed, the parties resistant to it could find district judges or other courts disposed to impose cost sanction against them,” he warned.
The Queen (on the application of the Secretary of State for Health and Social Care on Behalf of Public Health England) v Harlow District Council
QBD (Kerr J) 16 April 2021
Ms Jenny Wigley (Instructed by Davitt Jones Bould) for the Claimant
Ms Kelly Pennifer (Instructed by Greenhalgh Kerr Solicitors) for the Defendant
