Thoughts by Robert Hayton – Upper Tribunal supports call for nil RV on substantial refurbishment
Nothing about empty property rules in business rates is easy. The ‘obvious’ and ‘sensible’ outcomes are regularly complicated by regulations and practices designed to maximise income for local authorities and penalise owners for investing in and improving their assets or failing, for whatever reason, to have everything let and occupied all of the time.
Nowhere in empty rates has this been more of an issue over the last five years than with the treatment of property undergoing substantial refurbishment or improvement.
There was a time when a Valuation Officer (VO) would delete an assessment as soon as the toilets were removed. It was a terrific outcome, but often wrong. Over time the VO’s approach became more analytical and practice caught up with the rules.
And then, inevitably, things went the other way.
Owners couldn’t get buildings which had been all but been demolished removed from rating, and the VO would argue that the rules on assumed repair meant that any and all strip out was to be ignored as part of the valuation.
In Monk v Newbigin, the Supreme Court put a stop to all that nonsense, and following what they described as a helpful intervention by the Rating Surveyors Association (which was in part funded by Altus Group), we thought the approach to buildings undergoing refurbishment was finally resolved.
And yet, it remains difficult to get buildings removed from assessment. The VO has hundreds of nil RV appeals in their system. Every day we read ever more fanciful and farfetched justifications for why the current case is “beyond the scope of Monk”. We have settled more than are held up, but all have been delayed to some extent.
Now the Upper Tribunal has spoken, and in language that could not be more clear. Hearing an appeal against a Valuation Tribunal decision to nil an RV on offices undergoing refurbishment in Canary Wharf, they listened to the Valuation Officer’s case and then, in what I think is an unprecedented (or at least incredibly rare) move, dismissed the case before the respondent ratepayer even had to speak!
The Upper Tribunal was, rightly, incredibly critical of the VO who was in effect trying to circumvent the Supreme Court ruling.
We hope that the VO finally give up on this hopeless, and hugely damaging, attempt to ignore the Monk precedent. Not every scheme of work will result in a nil assessment, but equally nil RV cannot only be possible where the facts are identical to those in Monk.
Come on Mr VO! Lick your wounds, accept defeat and start to review the, unreasonably delayed, outstanding cases on their individual facts.
Executive Vice President
Head of Empty Rates & Property Tax