[2025] UKUT 104 (LC)

Fecha: 26-Mar-2025

The statutory background

The statutory background

19.

Section 41 of the Local Government Finance Act 1988 (‘the 1988 Act’) requires the VO for a billing authority to compile and maintain a local non-domestic rating list for the authority’s area. By section 42 the rating list must show each relevant non-domestic hereditament.

20.

The expression “hereditament” is defined by section 64(1) of the 1988 Act by reference to its meaning under section 115(1) of the General Rate Act 1967, as follows:

“Hereditament means property which is or may be liable to a rate, being a unit of property which is, or would fall to be, shown as a separate item in the valuation list.”

The question of whether a property falls to be shown as a separate item in the valuation list can be answered by applying principles developed by judges through case law.

21.

Rateable value is defined in paragraph 2(1) of Schedule 6 of the Local Government Finance Act 1988, as amended by the Rating (Valuation) Act 1999, as:

"… 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:

the first assumption is that the tenancy begins on the day by reference to which the determination is to be made;

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;

the third assumption is that the tenant undertakes to pay all the usual tenant’s rates and taxes and bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state fit to command the rent mentioned above.”

22.

Statute requires that the appeal property be valued reflecting certain matters as they existed on the material day, and by reference to values pertaining at an antecedent valuation date (“AVD”) which is 1 April 2015. It is agreed that for the purpose of this appeal the material day was 15th December 2022. The matters which must be taken to have been as they were at the material day are set out in paragraph 2(7) of Schedule 6 to the 1988 Act. The matters relevant to the appeal are:

“(a)
matters affecting the physical state or physical enjoyment of the hereditament;
(b)
the mode or category of occupation of the hereditament;
(c)
...
(d)
matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless physically manifest there;
(e)
the use or occupation of other premises situated in the locality of the hereditament.”