Enterprise Bill

Written evidence submitted by J P Scrafton (ENT 68)

In relation to the rating proposals J P Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

Offered in a personal capacity


Objection to the proposal to restrict the dissemination of rating valuation to ratepayers on the basis of an incorrect assumption as to the law

Refusal to discuss a fundamental divergence of legal opinion will inevitably result in major litigation and a perhaps needless increase in the number of appeals against assessments in the absence of the sharing of information


1. I am, by examination and experience, a qualified solicitor, a Fellow of the Institute of Revenues, Rating and Valuation, a Fellow of the Chartered Institute of Arbitrators, an accredited mediator and an Honorary Member of the Rating Surveyors’ Association. I have worked in rating for over thirty-five years, in private practice and as a Senior Legal Assistant to the Solicitor of Inland Revenue, in the Rating Group. Being no longer in legal practice, I work as a legal and valuation consultant.

2. I am also a member of the Council of the Institute of Revenues Rating and Valuation and have served in a number of capacities, for many years, including as Chairman of its Valuation Faculty. I have seen a number of the principal submissions in relation to the proposed changes to the appeal system, but I believe that these beg the question of the 2005 Act operating to limit the power of the Valuation Office Agency ("VOA") to disclose to ratepayers information given to it in connection with its activities under s41 Local Government Act 1988.


3. My belief, shared by Sir David Holgate (now President of the Lands Chamber) in his Opinion for the Rating Surveyors’ Association (of which Ministers have copies) and by others, is that that Act does not operate in that way. There is no suggestion, of which I am aware, that information given to or used by the Agency in compulsory purchase and compensation cases, is to be treated as confidential - compensation is not an HMRC function, and nor is rating.

4. The Department has been asked to supply supporting evidence for its expressed view: it has declined to do so, even though the Financial Secretary to the Treasury acknowledges its existence; and the question cannot therefore be said to be settled. Indeed, had it been so settled, in 2005, I cannot believe that it took VOA until 2010, as it did, to proclaim that its powers were so limited, if indeed, as a matter of law, they were so limited. To assert otherwise would be to accuse the Agency of considerable inefficiency. There would therefore seem to be other reasons behind this argument, which have not been made clear.

5. When rating valuation was removed from the control of local government in the late 1940s rating valuers who transferred from local government to the Inland Revenue Valuation Office worked in parallel with the District Valuer service, created to deal with Estate Duty prior to the First World War. The head of a local office was styled the District Valuer and Valuation Officer, a style which lasted until agency status came along and, like the waters of equity, the two tasks flowed in the same channel but did not mix. The Board of Inland Revenue appointed a DV/VO and, for taxation purposes, the office reported to the Board; but the client department for rating was what has become DCLG.

6. Information given to the Valuation Office for capital taxation purposes was regarded as confidential and was to be treated as such, in the same way as information given to an Inspector of Taxes. This issue of confidentiality was debated at the highest level in the Valuation Office and a guidance note was issued, in (I believe) the nearly 1980’s, in the Chapter Instructions over the signature of Walter Williams CB FRICS and also, perhaps, that of Norman Behr FRICS (the two Deputy Chief Valuers at the time) that information received by the Office on a Particulars Delivered form could be used in negotiation "over the desk" but could not be used in rating valuation proceedings, unless the capital transaction was disclosed, separately, on a Form of Return for rating purposes.

7. I was instructed by the Chief Valuer’s Office, when I was in the Revenue, to prevent local offices from ignoring this guidance this is the only restriction of which I, and others who worked within the Valuation Office at the time, am aware, and no doubt the VO Circular is available and discoverable in VOA records.

8. It follows, therefore, that, I cannot accept the assumption which DCLG invites us to make, without producing any evidence or argument that the scope and extent of the Act of 2005 is as it claims. I share the views of Sir David Holgate. If I am right in this, then the government’s approach, with all due respect, is misconceived and likely to result in breaches of the rules of natural justice, quite apart from shoals of appeals by those seeking to find information to verify or challenge a rating assessment. Litigants have a fundamental entitlement to know what case they have to meet, and the proposals deny this right so that ratepayers are, in effect, all guilty until proved innocent, and VOA cannot discharge the duty imposed on it by s41 Local Government Finance Act to make and maintain fair lists of rating assessments. These proposals in effect render s41 nugatory

9. VOA has access to the vast bulk of the relevant information, which others simply do not have. When the evidence is deployed to create valuations, numbers of rents can be employed and adjusted so that the resulting assessment is at best a derivative from a base of information selected and adjusted (sometimes incorrectly) by the VOA valuer. A ratepayer, particularly in a smaller business with no valuation expertise, and not professionally advised by an expert with a network of professional contacts each of whom may have relevant information, simply cannot be expected to defend itself against a silent government agency (for the burden of proof in tribunals is on the ratepayer). Professional advice can be expensive but, as was said, justice, like the Ritz Hotel, is open to all.

10. VOA, with its steadily-shrinking funding (since 1990) and with whom I was proud to serve in earlier days is, with the best will in the world, not funded to deal with such a deluge of work. The Valuation Tribunals are similarly underfunded, even though, apart from the magistracy, they are the last of the lay tribunals. This Bill with its accompanying regulations (the consultation on which has already closed, thereby prejudging the will of Parliament) will fail in one of its objects, namely to speed up and to simplify the rating system - indeed, these provisions will have the diametrically opposite effect. Unaccepted taxation breeds avoidance.


Leaving aside questions arising from the chronic underfunding of VOA receding since 1990, and the underfunding of the tribunals, it should be provided, in terms, that VOA must divulge such information as will enable ratepayers to form a judgment as to whether or no their properties are correctly assessed. To do otherwise will gag the taxpayers (many of whom will not be able to afford expert help), create more appeals, rather than fewer, cause greater delay and expense across the board and create unacceptable breaches of the rules of natural justice, which assuredly will require judicial attention at the highest level.

February 2016


Prepared 25th February 2016