Local Taxation Flashcards

Question

Tell me about Woolway v Mazars LLP (2015)?

Answer 1

A question in this appeal is how different storeys under common occupation in the same block are to be entered in the rating list. Concerned Tower Bridge House, an eight-storey office block in St Katherine’s Way, East London. Mazars, a firm of chartered accountants, occupies the second and sixth floors of the building under separate leases. These floors are separated by common areas in the building and were entered in the 2005 rating list as separate hereditaments. In February 2010 Mazars applied to the Valuation Tribunal to merge the two entries to form a single hereditament. The VTE agreed that the two entries should be merged. The Valuation Officer, Mr Woolway, appealed to the Upper Tribunal who confirmed that the premises could be treated as one hereditament. The Court of Appeal dismissed Mr Woolway’s appeal. Mr Woolway appeals to the Supreme Court. The Supreme Court unanimously allows the appeal. Lord Neuberger, concurring with Lord Sumption and Lord Gill, concludes that a hereditament is a self-contained piece of property, where all parts are physically accessible without having to go onto other property. If contiguous units do not intercommunicate and have to be accessed via other property of which the common occupier is not in exclusive possession, this will be a strong indication that they are separate hereditaments. This completely changed the landscape from the Gilbert v Hickingbottom 1956 case. Creating what was called staircase tax.

Answer 2

The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018 reverses the Supreme Court decision in Woolway v Mazars LLP which required non-intercommunicating occupations to be assessed separately and reverts back to the former VO practice where separate but adjoining areas, used for the same purpose and in common occupation are valued as a single assessment. Act took effect from 1 April 2010. Following the 2017 Autumn statement regarding the reversal of the effects of the ‘stair-case tax’, an addition to the definition of hereditament was made to the Local Government Finance Act 1988. The amendment ordered the Valuation Officer to assess together properties that were made to be individual assessments following the Supreme court decision in Mazars.

Answer 3

Two areas which are used by the same common occupier who share a wall, fence, or other means of enclosure. Ceilings and floors, where directly overhead or below each other, will allow property to be considered as contiguous where the properties are in the same occupation. property will still be considered contiguous if there is a service space between the floor and ceiling, control of which remains with the landlord.

Answer 4

Previously occupied contiguous property will continue to be one assessment where it all becomes empty on the same day. If parts are vacated on separate days then individual assessments will apply.

Answer 5

Check – ratepayer confirms or edits details about their property Challenge – once property details are agreed they can then challenge the valuation Appeal – if the challenge result is unsatisfactory, they can take the case to tribunal (up to £300)

Answer 6

VO have 12 months to resolve a check, if not complete the IP has the right to move on to challenge. Challenge must be made within 4 months of check completion date (16 months for external MCC). Challenge must be resolved within 18 months or IP has the right to go direct to appeal stage. IP appeal to VTE within 4 months of decision notice

Answer 7

Universal Business Rates Multiplier Small Business - 49.9p (RV below £51,000) 54.6p - standard rate - increasing from 01-Apr-2025 to 55.5p.

Answer 8

To make the rating appeal system more efficient Ensures that factual issues are dealt with early in the process.

Answer 9

Rating list containing assessments of the network property of major transport, utility and telecommunications. Such as: Electric, gas and water supply networks Railways Telecommunication networks Cross country pipelines

Answer 10

Ministry of Housing, Communities, and Local Government - Angela Rayner is Secretary of State for Levelling up, also Jim Mcmahon OBE and Matthew Pennycook MP

Answer 11

Network Rail London Underground National Grid

Answer 12

Firstly consider is it plant? Ask occupier, take photo and/or ask colleague if unsure Secondly Is the item listed in the 2000 P+M Regs?

Answer 13

Class 1 - Power Class 2 - Services Class 3 - Infrastructure Class 4 – Structures (contains 2 tables)

Answer 14

Air conditioning is not specifically named in Class 2, but all the functional elements are, such as heating, cooling, ventilating and filtration.

Answer 15

Office valuation schemes will often, but not always, reflect A/C. For retail properties, there are agreed schemes in place, based on £7 sq m addition in shops, and £4 sq m in retail warehouses. For industrial premises, A/C is commonly dealt with as a % addition, A/C usually being found in the ancillary offices.

Answer 16

A/C rateable unless used for trade related purposes as held in SC judgement of Iceland Foods v Berry 2018 - Upper Tribunal Iceland Foods v Berry 2016 - Iceland argued AC system far more powerful than in normal supermarket setting to suit particular way of operating stores. Upper Tribunal held that merely keeping goods frozen did not satisfy manufacturing / trade purpose. Court of Appeal held same view. - Supreme Court Iceland Foods v Berry 2018- SC overruled, taking much wider view of regulation proviso. Ruled that trade process is simply trade carried out in course of trade - keeping food frozen is sufficient. Rejected VO assertion that proviso limited to productive classes of industry - regulations suggested applied to all types of hereditaments. Plant deemed ‘tool of the trade’ and therefore non-rateable.

Answer 17

1. Comparable rents 2. Comparable assessments 3. If no good evidence, do cost approach 4. Find annual equivalent If unreliable, adopt £7 backstop

Answer 18

· VAV – variable air volume (highest capital cost but most flexible). · Fan coil – usually 4 pipe (lowest capital cost and good flexibility, but higher running cost). VRV – variable refrigerant volume (lower capital costs but higher running and maintenance cost).

Answer 19

12 months or more

Answer 20

Rent free Stepped rent Premium Reverse Premium Repair liability Tenant contribution Landlord contribution

Answer 21

Primary duty as an expert witness is not to a client but to the tribunal. Must give independent and unbiased evidence. State main facts and assumptions. 'Surveyors Acting as Expert Witnesses (2023)'

Answer 22

- Duty to client -Also owe an overriding duty to the tribunal to act properly and fairly as set out in Surveyors Acting as Advocates (2nd edition professional statement, 3rd edition guidance note) 2017

Answer 23

Notice for a newly constructed property to serve as the date whereby building is said to be complete and rate liability can commence.

Answer 24

0 rent free period shown as the first line Rental income on second line, YP is deferred by length of rent free using growth rate of 7% PV is deferred by length of time of rent free (YP x PV of £1) x Rent = total rental income Divided by YP @ growth rate = yearly rent

Answer 25

If the returned glazed frontage runs for the entire length of the shop, then it will be appropriate to apply a percentage additional to the value of the whole shop. Dependent on the quality of the return frontage (i.e. is it facing other retail units, does it substantially add to the prominence of the shop, is there a secondary entrance from the return frontage elevation). One might add 10% or 7.5%, 5% or 2.5% to the total rental value of the ground floor to reflect the benefit of the return frontage. In a situation whereby, the glazed return frontage is partial i.e. only part of the shops return frontage benefits from glazing, and the rest is a solid structure, an addition to the rental value should be made for the area of the shop which benefits from the glazed frontage. Another approach is to zone from both frontages (only say this if they ask) zoning from the inferior entrance ceases when it is less in value than the value attributed when zoning from primary frontage.

Answer 26

Where a retail unit occupies a corner position it may have glazing on part of the side elevation and we refer to this as return frontage (R/F). JEWELLERS IN PARTICULAR LIKE CORNER SHOPS WITH R/F OR SPLAYED FRONTAGE

Answer 27

Benefits Increases prominence of the shop Customers can see inside the shop thus enhancing the tenant’s opportunity to attract more customers. Tenant has a greater opportunity to display. Negatives Most retailers now seek the maximum amount of linear wall space and so do not want a glazed return frontage because they could not rack against that frontage and so lose linear wall space. The dressing of shop windows is time consuming and costly. The insurance premises are higher for a unit with a glazed return frontage.

Answer 28

To convert rental evidence into a form which is compatible with the definition of Rateable Value in Schedule 6 para 2(1) of the Local Government Finance Act 1988. The rental evidence obtained on FORs will rarely, if ever, accord with the definition of RV.

Answer 29

May contain premiums or incentives. During periods when the market is depressed reverse premiums are sometimes paid to a new tenant by the landlord or the previous occupier, or other incentives given in the form of rent-free periods in excess of any ‘norm’ fitting out period or the transfer of liabilities to the landlord.

Answer 30

Although VAT is often specified within leases to be recoverable from tenants as additional rent it is considered that it does not form part of the rent payable under the hypothetical tenancy. The imposition of the tax is likely to be inconsistent and its impact on underlying rents insignificant in most cases. The overwhelming need for a uniform basis for rating dictates that the RV is net of VAT

Answer 31

Value Added Tax

Answer 32

Group-Pre-Challenge-Review An agreement is made between a VO and ratepayers of an action to be taken regarding a group of rating assessments.

Answer 33

It relates to mode and category. Held that a cotton mill could be valued as a factory and not restricted to a cotton mill - a factory is a factory but not any particular kind of factory.

Answer 34

Taking it as it is - Latin. Scottish and Newcastle v Williams 2000: Case determined mode or category of occupation has two distinct limbs: - Use – must be valued in same use - Physical – only minor alterations

Answer 35

12 Compiled list error MCC Deletion Recon

Answer 36

Material change in circumstances - something that impacts the hereditament or locality. - road works - public transport

Answer 37

PICO act 2018 - Mazars 2015

Answer 38

Matters affecting the physical state, physical enjoyment, or mode or category of a hereditament. Matters affecting the locality where the hereditament is situated, although not affecting the locality but none the less manifest there.

Answer 39

Economic matters as they are to be taken at the AVD - e.g interest rate changes not an MCC Physical changes cause by occupiers own performance disregarded - Cox v Wigan (2018), but if economics cause a physical matter - MCC can continue Repair - we assume reasonable repair at AVD

Answer 40

Guidance from public bodies should not be grounds for a change in RV - E.g smoking ban previously may have been an MCC, but not now.

Answer 41

Appeal of Sheppard – 1978 – 2 Houses affected by noise and smell due to sewer works. VO argued the works were less than a year so no allowance. LT – The degree of importance attached to ease of administration must vary with circumstances and the severity of the works. An allowance was allowed. Greenwood V Harrison – No allowance for scaffolding outside a shop for 6 weeks. Too transient. Morton V Jones 1986 – Road widening scheme, at the material day the works were almost at the end so no allowance given. Denny Bros – 2009 – Hypothetical tenant would know a disturbance would continue to a greater or lesser extent for over a year. So a 25% allowance awarded.

Local Taxation Flashcards

(65 cards)