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15. What is the valuation process?

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The Valuation Officer is required to produce a Local Rating List of business properties in the authority's area and is given powers to obtain and hold information to enable him to carry out a valuation for each property. The valuation produces a figure known as the rateable value of the property and the rateable value determines the amount payable for that property. Once a local rating list has been compiled there are various circumstances in which the entries can be altered. Statutory rules determine the effective date of those alterations and Valuation Tribunals hear appeals by anyone affected by an entry in, or omission from, the list.

15.1 Valuation Officer

The Valuation Officer is appointed by the Commissioners of the Inland Revenue and is responsible for preparing the local rating list. Crown properties appear in a separate central rating list and the Commissioners also appoint a Central Valuation Officer with responsibility to produce and maintain that list. The Valuation Office has an excellent web site where appeals and rating lists are covered in great detail and you may wish to visit it at http://www.voa.gov.uk/.

15.2 Valuation Officer Powers

The Valuation Officer has the power to serve a notice on any owner or occupier requiring them to supply information to enable him to carry out his duties. If the owner or occupier fails to provide information that is within their knowledge and control, or knowingly provides false information, they may be subject to a fine. The Valuation Officer has the power of entry to conduct a survey and valuation. At least 24 hours notice must be given to the person who controls entry to the property and anyone who delays or obstructs the entry may be subject to a fine.

15.3 Local Rating List

The first local rating list was compiled with effect from April 1990 and a new list is compiled every five years. The list shows a rateable value for every business property in a billing authority's area. The rateable values reflect the annual rental value of a property and the production of a new list every five years enables changes in the general levels of rents to be reflected in changes in rateable values.

Preparation of a new local rating list is started prior to it coming in to force and therefore the values reflect the situation at an earlier date than when the list comes in to force. For example the list that came into force in April 2000 was based on values as at April 1998 and April 1998 is known as the 'antecedent date'. There are prescribed rules about the contents of the local rating list which include defining which properties should appear and what details of those properties will appear.

15.4 Contents of the Local Rating List

The list must contain an entry for every property that is land, a mine, a right to advertise or a building used wholly or partly for business purposes. The technical name of an entry is a 'hereditament' and the entry must show the description of the 'hereditament' ('Shop', 'Office', 'Factory' etc.), its address, and a unique reference number for the entry.

Some properties have a mixed residential and business use and it is not possible to separately identify those parts for council tax and business rate purposes. Such properties are called 'composite properties. The entry in the local rating list will identify such properties and the rateable value will be assessed on the rental value of the business part only.

15.5 'Every Property'

There are some properties where people 'reside' but which are nevertheless treated as businesses and therefore subject to the business rate. They are:

Short stay accommodation, such as a hotel, run as a business to provide accommodation to people whose sole or main residence is elsewhere.
Commercially operated self-catering accommodation let for short periods totalling 140 days or more each year.
Accommodation within the meaning of the Timeshare Act 1992.
The pitch or mooring of a caravan or boat that is not the sole or main residence of an individual. The caravan or boat is not rateable.
Empty property where it appears that when next in use will not be used as residential property.

15.6 Valuation

The valuation process is to determine the rateable value of a property to be entered in the local rating list. In most cases the rateable value is the estimated annual rent at which a property might be expected to be let for having made the following assumptions.

The rent is as at the date the valuation is made
The property is in a state of reasonable repair except for repairs that would be uneconomic to carry out
The tenant is responsible for the property taxes and rates, the property insurance, and for maintaining the property in a state of repair to continue to command the rent.

For a minority of properties there is no rental evidence on which to base a valuation and other methods are used. Examples of such properties are sport stadiums, hotels and mines. In these circumstances other methods including the rebuilding costs, income and expenditure or extraction values are used.

15.7 Alterations

A local rating list may be altered in prescribed circumstances following a proposal having been made to the Valuation Officer by a person who satisfies a prescribed description. The Valuation Officer will supply a copy of the proposal to the billing authority and if someone other than the ratepayer makes the proposal then a copy will also be supplied to the occupier.

If the Valuation Officer believes the proposal is well founded he will alter the local rating list as soon as practicable. Where the Valuation Officer does not find the proposal well founded it may be settled by agreement or where there is no agreement, will be submitted as an appeal to the Valuation Tribunal. The effective date of any alteration is determined in accordance with prescribed rules.

1 5.8 Person who can make a proposal

The occupier, owner, leaseholder or tenant of a property may make a proposal as regards a property. Where the 'person' is a company, a person or company that is a subsidiary of that company may act on their behalf. A proposal may only be made under one or more of prescribed circumstances. A billing authority may also make a proposal for any property in their area but they may only make a proposal under the circumstances covered by items b), d), f) and i) of the prescribed circumstances.

15.9 Form of a proposal

A proposal must:

Be in writing
Be served on the Valuation Officer
State the name, address and status of the proposer
Identify the property to which it refers
State the circumstances under which the proposal is made
Provide supporting information

There is no prescribed form but the Valuation Office supply a pro-forma for proposer's convenience and copies can be obtained on-line from www.voa.gov.uk

Where the Valuation Officer is of the opinion that a proposal is invalid he must serve a notice on the proposer within four weeks saying so. The proposer may accept the notice, serve another proposal, or serve an objection to the notice within four weeks. If an objection is served then the proposal is referred to the Valuation Tribunal. Technically it is referred to the Valuation Tribunal as an appeal against the Valuation Officer's decision to not treat the proposal as well founded.

15.10 Proposals - Prescribed Circumstances

A proposal to alter a local rating list can only be made in the following circumstances:

The rateable value ('RV') as originally shown is inaccurate
The original RV has become inaccurate because of changes to the property
An amended RV has subsequently become inaccurate
A decision by a Valuation Tribunal, Lands Tribunal or Court shows existing details to be inaccurate
The effective date of an alteration is shown to be wrong
An entry that should be shown in the list is not shown
An entry that should not be shown in the list is shown
The entry does not indicate a composite property or a property exempt from non-domestic rating
The entry inaccurately indicates a composite property or a property exempt from non-domestic rating
The entry shows a property that should be shown as one or more different entries
The entry shows a property that should be shown as more than one entry
The address shown in the entry is wrong
The description of the property is wrong
Any statement required to be shown is not shown

15.11 Settled by Agreement

After a proposal has been made it can be settled in terms different from those contained in the proposal if there is agreement in writing. The Valuation Officer will then alter the local rating list and the agreement has the effect of withdrawing the original proposal. The agreement must be signed by:

The Valuation Officer
The proposer
The occupier at the date of the proposal
The ratepayer at the time of the agreement, and
Any other relevant person who has indicated that they want to be a party to any agreement.

15.12 Effective Date

The effective date of an alteration to a local rating list is included as a part of the altered entry and the factors taken into account in determining the date are prescribed in regulations. The reasons can be broadly described as correcting inaccuracies or reflecting changes and the factors include:

The reason why the alteration is made
The date a proposal to make an alteration is made
The date of any occurrence that required the alteration to be made
Other special factors from time to time prescribed.

The only special factor prescribed to date related to areas affected by the outbreak of foot-and-mouth disease in 2001 and provided for proposals made before July 2001 to have effect prior to April 2001. Where reference is made to a 'year' it refers to the period April to March and where a particular day is required to be identified but cannot be identified then an alteration has effect from the date a proposal is made or, if done without a proposal, the date the list is amended.

15.13 Effective date to correct inaccuracies

The effective date to correct an inaccuracy in the list, and amended as the result of a proposal made before October 2000, can be backdated to April 2000. If the proposal was made between October 2000 and March 2001 the amendment can be backdated to no earlier than October 2000 and if the proposal is made after March 2001 the amendment can be backdated to no earlier than the beginning of the year in which the proposal was made.

Where a proposal is made to correct a previous alteration the effective date will be the date the original alteration had effect and if not made as a result of a proposal from April of the year the alteration is made.

15.14 Effective date for changes

Where the alteration to the local rating list is to reflect a property being split into more than one part, parts being merged into fewer parts, parts or the whole being demolished, or there is a change in the parts being used for domestic and business purposes, then the effective date will be the date of the split, merger, demolition, or change of use. Where an alteration reflects other changed circumstances the effective date will be whichever is the later of the date the change occurred or April of the year in which the proposal is made.