Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Written evidence submitted by the City of London Corporation (RCTB04)

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Public Bill Committee

Response by the City of London Corporation

Submitted by the City Remembrancer’s Office

Introduction

1. The City Corporation welcomes the opportunity to contribute to the Public Bill Committee’s consideration of the Bill. The City Corporation agrees with the intention of reinstating the practice of the Valuation Office Agency (VOA) prior to the Supreme Court’s decision in the case of Mazars.

Implementation

2. The City Corporation has no reason to suppose that the proposed method of implementation will not succeed, but ratepayers would be better served by an alternative approach. It would be preferable for the Valuation office Agency to reverse the divisions of assessments made following the Court decision in Mazars, rather than ratepayers having to launch a fresh appeal to have the situation reversed and then agree a merger with the VOA. The appeal process is lengthy, especially since the introduction of Check, Challenge, Appeal. The VOA will have all the relevant information and would be best placed to correct the situation.

3. Furthermore, the proposed approach might have particularly negative effects on small ratepayers who, in the context of an appeal, are likely employ rating agents to act on their behalf. If the current proposals are introduced without any support for those businesses, eligible businesses would receive a refund but would bear a net cost in respect of professional and other fees.

4. Given the passage of time since the Mazars decision, the possibility exists that a relevant hereditament has altered in the interim period. This would give rise to complexities in relation to re-assessments that refer back to 2010, as envisaged in clause 1 (2) of the Bill. Further explanation should be given regarding the way in which it is intended such re-assessments will be conducted.

New Costs to Local Authorities

5. Although additional rates income arising from the divisions of assessments will be offset by reductions from their being merged, there is an administrative cost to local authorities in actioning both the divisions and the mergers and also of dealing with the resultant refunds, particularly where the merger is backdated into the 2010 Rating List. This new burden is in the form of a double cost to authorities that arises from the original requirement on authorities to transpose amendments received from the VOA into their rating records and the future cost of re-adjusting the authority’s rating records and making refunds.

6. Additionally, in areas such as London that are now taking part in pilots for 100% rates retention, any additional income generated by assessments being split would have been divided according to the proportionate shares, with amounts being allocated to the billing authority, preceptors and central Government. If re-merging them results in refunds to ratepayers, it would be inequitable for billing authorities/preceptors to bear the whole cost of those refunds because they were not the sole beneficiary of the additional income. 

7. The situation is outside local authorities’ control and it would be fair and reasonable to ensure local authorities do not suffer a financial impact. The City Corporation would advocate that Government takes steps to ensure the measure is cost neutral for local authorities.

April 2018

 

Prepared 2nd May 2018