1.The Committee has requested a memorandum on the following point:
Given that section 55(5)(b) of the Local Government Finance Act 1988 refers to the accuracy of a non-domestic rating list, explain the source of the power to make the provision in regulation 13A(2) inserted into the 2009 Regulations by regulation 16 which, in relation to appeals on valuation, focuses on reasonableness rather than accuracy.
2.The power in section 55(5) of the Local Government Finance Act 1988 (“the Act”) enables regulations to be made providing for a person who has proposed an alteration to a list (“the proposer”) to appeal to a valuation tribunal where there is disagreement between the proposer and a valuation officer about the accuracy of the list.
3.Section 55(5A) of the Act provides that the regulations may include provision about the grounds on which an appeal may be made.
4.A non-domestic rating list shows:
a) the rateable value of a hereditament; and
b) other information about the hereditament.
5.Regulation 4(1) of S.I. 2009/2268 sets out the grounds for making a proposal to alter a list in relation to a hereditament.
a) The grounds in regulation 4(1)(a) to (d) relate to the accuracy of the rateable value shown in the list.
b) The ground in regulation 4(1)(e) relates to the accuracy of either the rateable value or other information shown in the list.
c) The grounds in regulation 4(1)(f) to (o) relate to the accuracy of other information shown in the list.
6.Regulation 13A(1) (inserted by regulation 16 of S.I. 2017/155) sets out the circumstances in which, for the purposes of making an appeal, there is disagreement between the proposer and a valuation officer about the accuracy of a list. For example, there is disagreement about the accuracy of a list if the valuation officer has decided under regulation 13 not to alter the list according to the proposal. In those circumstances, the proposer may appeal on the grounds set out in regulation 13A(2).
7.If a proposal to alter a list was on the ground that the rateable value was inaccurate (see regulation 4(1)(a) to (e) of S.I. 2009/2268) and there is disagreement between the proposer and the valuation officer about the accuracy of the list (as set out in regulation 13A(1)), the proposer may appeal on the ground in regulation 13A(2)(a).
8.If a proposal to alter a list was on the ground that the list was inaccurate in any other respect (see regulation 4(1)(e) to (o)) and there is disagreement between the proposer and the valuation officer about the accuracy of the list (as set out in regulation 13A(1)), the proposer may appeal on the ground in regulation 13A(2)(b).
9.In regulation 13A(2)(a), “valuation” means the rateable value as determined under Schedule 6 to the Act. Paragraph 2(1) of that Schedule provides that:
The rateable value of a non-domestic hereditament none of which consists of domestic property and none of which is exempt from local non-domestic rating shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year on these three assumptions-
a) the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;
b) the second assumption is that immediately before the tenancy begins the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic;
c) the third assumption is that the tenant undertakes to pay all usual tenant’s rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command the rent mentioned above.
10.Schedule 6 to the Act makes it clear that the determination of a rateable value is based on the valuation officer’s estimate of the rent at which the hereditament might reasonably be expected to let. The rateable value is a value equal to the estimated amount of rent if the hereditament were to be let on a specified date on the open market. A ground of appeal based on the reasonableness of that valuation is consistent with both Schedule 6 and the statutory duty of the valuation officer to maintain an accurate list.
11.While section 55(5) of the Act enables regulations to provide for an appeal only where there is disagreement about the accuracy of a list, section 55(5A) does not require the grounds of appeal to be cast in terms of accuracy. This issue arose in the debate in the House of Lords on S.I. 2017/155.
Department for Communities and Local Government
21 November 2017
7 December 2017