Introduction

The case Avison Young Ltd v Jackson (Valuation Officer) ([2021] EWCA Civ 969) adjudicated by the England and Wales Court of Appeal, Civil Division, addresses significant questions regarding the scope and temporal limitations of the Valuation Tribunal for England's (VTE) powers under regulation 38(7) of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009. Avison Young Ltd ("AY") contested the VTE's authority to restrict alterations to a rating list to align strictly with the duration of specific circumstances, such as building works rendering a property temporarily incapable of beneficial occupation. This commentary delves into the intricacies of the judgment, elucidating its implications for non-domestic rating law and administrative procedures.

Summary of the Judgment

In both appeals presented before the VTE—representing AY and Great Bear Distribution Ltd ("GBD")—the core issue revolved around whether the VTE, under regulation 38(7), possessed the authority to limit the duration of list alterations to the specific period during which particular circumstances existed. The cases involved properties undergoing alterations that temporarily affected their rateable values. AY sought to have the rateable value of their leased premises at 10 Aldermanbury reduced to a nominal amount during refurbishment, while GBD aimed to have Freeston Drive removed from the rating list during similar works.

The VTE, supported by the Upper Tribunal (Lands Chamber), affirmed its power to restrict alterations temporally, aligning them with the duration of circumstances such as construction activities. However, on appeal, the Court of Appeal upheld the Upper Tribunal's decision in AY's case but found fault with the Upper Tribunal's reasoning in GBD's case, thereby allowing the Valuation Officer's appeal. The judgment affirms the VTE's discretion to temporally limit alterations but scrutinizes the application consistency, especially concerning the impact on ratepayers.

Analysis

Precedents Cited

The judgment references several key cases to contextualize the legal framework governing rating list alterations. Notably, Monk v Newbigin ([2017] UKSC 14) underscored the administrative necessity of altering rating lists during periods when properties were under reconstruction and hence unoccupiable. Additionally, Jackson (VO) v Canary Wharf Ltd ([2019] UKUT 136 (LC)) and Colour Weddings Ltd v Roberts (VO) ([2019] UKUT 385 (LC)) further explored the boundaries of list alteration powers, emphasizing the importance of reflecting accurate rateable values relative to property conditions.

These precedents collectively reinforce the principle that the Valuation Tribunal must ensure the accuracy of rating lists, adjusting rateable values in response to material changes in circumstances. The current judgment builds upon this foundation, specifically addressing the temporal aspect of such alterations.

Legal Reasoning

Central to the Court of Appeal's reasoning was the interpretation of regulation 38(7), which grants the VTE discretion to alter rating lists in accordance with prevailing circumstances. AY and GBD contended that this discretion did not extend to temporally limiting alterations when the circumstances-ended rateable values differed from their original assessments.

The appellate court, however, upheld that regulation 38(7) allows the VTE to confine alterations to the period during which specific circumstances exist, such as construction works. The court rejected AY's arguments that the cessation of building works resulted in the creation of a new hereditament or that the VTE's discretion should be narrowly construed to prevent temporal limitations. It emphasized that alterations made to reflect a property’s temporary incapacity to be occupied align with the legislative intent to maintain accurate and current rating lists.

Importantly, the court addressed AY's assertion that the cessation of circumstances did not restore the hereditament to its prior state but only altered its physical condition. The court clarified that while post-alteration rateable values may change due to new circumstances, the VTE’s power under regulation 38(7) remains applicable for the specific period during which the original circumstances justified the alteration.

Impact

This judgment has profound implications for the administration of non-domestic rates in England and Wales. It affirms the VTE's authority to impose temporal restrictions on list alterations, thereby ensuring that changes in rateable values accurately reflect the duration of specific circumstances such as renovation or reconstruction works. This clarification aids in preventing long-term inaccuracies in rating lists, promoting fairness for both ratepayers and local authorities.

Moreover, the decision underscores the necessity for ratepayers to proactively engage in maintaining the accuracy of their rateable values by submitting timely proposals for list alterations. Failure to do so may result in rateable values not being updated post-alteration, leading to potential discrepancies and financial liabilities.

Complex Concepts Simplified

Hereditaments

A hereditament is a legal term referring to a unit of property liable to rates. Under section 64(1) of the Local Government Finance Act 1988, it encompasses properties that are listed separately in valuation lists. If a property is not capable of beneficial occupation—meaning it cannot be used effectively for its intended purpose—it may cease to qualify as a hereditament temporarily.

Rateable Value

The rateable value of a property is an assessment of its open market rental value on a specific date. This value determines the amount of non-domestic rates (a form of property tax) owed by the property owner. Rateable values can be adjusted based on changes in the property's condition, usage, or market circumstances.

Valuation Tribunal for England (VTE)

The Valuation Tribunal for England (VTE) is a specialized tribunal that adjudicates disputes regarding rateable values of properties. It operates under regulations such as the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009, interpreting and applying statutory provisions to ensure fair valuation assessments.

Regulation 38(7) of the VTE Regulations

Regulation 38(7) grants the VTE discretion to alter rating lists by limiting the duration of such alterations to the period during which specific circumstances justify the change. For instance, if a building is under reconstruction and cannot be occupied, the VTE may reduce its rateable value to a nominal amount only for the duration of the reconstruction works.

Conclusion

The Avison Young Ltd v Jackson (Valuation Officer) judgment delineates the extents and limitations of the VTE’s authority under regulation 38(7), particularly emphasizing the temporal confines of rating list alterations. By affirming that the VTE can restrict alterations to the duration of specific circumstances, the court ensures that rateable values remain reflective of a property's actual state and usage during periods of significant change.

This decision not only reinforces the importance of maintaining accurate and up-to-date rating lists but also highlights the proactive role ratepayers must play in initiating alterations when circumstances change. The judgment serves as a pivotal reference for future disputes involving the temporal scope of rating list modifications, promoting administrative precision and equitable treatment of ratepayers across similar contexts.