IRRV Collection and Enforcement Conference 2013

Transcription

1 IRRV Collection and Enforcement Conference 2013 Jerry Schurder FRICS FIRRV Head of Rating Gerald Eve LLP Where is the Empty Rate going?

2 Where is the Empty Rate going? NNDR1 2013/14 Empty properties 862.8m Part empty 40.3m 903.1m Institute of Revenues Rating and Valuation

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4 It has been recognised for a considerable amount of time that ratepayers or potential ratepayers can and do organise their affairs to avoid paying rates. In Gage, Alverstone CJ dealt with this question and stated that if the ratepayer thought that she would not be within the charging act by going out of possession, she was quite entitled to do so. Judge Jarman Makro v Nuneaton & Bedworth BC, 2012

5 In my judgement the same applies to going in and then out of occupation. It has often been emphasised that the court is not a court of morals, but of law. If the outcome of this case is seen as unacceptable then it is for the legislature to determine whether further reform is needed. Judge Jarman Makro v Nuneaton & Bedworth BC, 2012

6 Councils should not refuse relief because they disapprove of the mitigation scheme Refusal to pay not an acceptable method to appeal demanded amounts Officers should approach liability in a fair, responsible, professional and judicial manner

7 Recent judgements Makro - clarity over relevant tests of actual and beneficial occupation - minimal use can constitute occupation Manchester - 13 companies wound up in High Court (July 2011). They were placed in Members Voluntary Liquidation, but no liquidator appointed

8 Members Voluntary Liquidation In light of the court s decision to wind up the 13 companies on the grounds the arrangement was held to be contrary to the public interest, The Service is of the opinion that in cases where a practitioner takes an appointment in a members voluntary liquidation, in which the main aim of the arrangement is to facilitate the non-payment of rates, such an arrangement would also be contrary to the public interest. Insolvency Service Guidance March 2012

9 Members Voluntary Liquidation As such, if The Service is made aware of practitioners participating in these types of arrangements, it will consider reporting the matter to his/her Recognised Professional Body. Insolvency Service Guidance March 2012

10 Charitable relief Preston City Council v Oyston Angel Charity Empty properties are zero rated where (a) The ratepayer is a charity or trustee for a charity and (b) It appears that when next in use, the hereditament will be wholly or mainly used for charitable purposes (whether of that charity or of that and other charities) Section 45A(2) Local Government Finance Act 1988

11 Charitable relief Preston City Council v Oyston Angel Charity Used for the charitable objects of the owning charity accompanied or not by other charitable purposes Mr Justice Hickinbottom

12 Charitable relief Preston City Council v Oyston Angel Charity Used for the charitable objects of the owning charity accompanied or not by other charitable purposes I stress that that answer is based upon the issues that were before the magistrates, before whom the possibility of charities sought as sub-licensees having charitable purposes entirely different from the wide charitable objects of the trust was not in issue. Mr Justice Hickinbottom

13 Letting to a charity for bluetooth marketing Chester and West Cheshire Council v Public Safety Charitable Trust 2012 Four ingredients of rateable occupation present Was wholly or mainly used for charitable purposes Followed Glasgow Corporation v Johnstone (1965) the Council is wrong when it suggests that it is the extent of the occupation that is determinative English Speaking Union v City of Edinburgh Council (2009) distinguished

14 Letting to a charity Kenya Aid Programme v Sheffield City Council

15 Letting to a charity Kenya Aid Programme v Sheffield City Council Does wholly or mainly relate to use made or floorspace utilised?

16 Letting to a charity Kenya Aid Programme v Sheffield City Council In my judgement the decision of the District Judge was flawed. Whilst the judge was entitled to have regard to the English Speaking Union case and look at the whole of the evidence before him and decide on a broad basis whether the premises are being used wholly or mainly for charitable purposes, and whilst the judge was correct to take into account the extent to which the premises were used, he also wrongly took account of other factors. Lord Justice Treacy

17 Here to stay for now Ratepayers will continue to seek to mitigate their EPR liabilities Will become more inventive

18 Hereditaments not prescribed for the purposes of Section 45(1)(d) of the Act 4(h) whose owner is entitled to possession only in his capacity as the personal representative of a deceased person Unoccupied Property Regulations 2008

19 Contact details Jerry Schurder FRICS FIRRV Head of Rating Gerald Eve LLP 72 Welbeck Street London W1G 0AY Tel

20 Conferences and Meetings: or phone Distance Learning: or phone General Enquiries: or phone Qualifications and Assessment: or phone Policy and Research: or phone Publications: or phone Subscription Services, Sales and Marketing: or phone IRRV, 5th Floor Northumberland House High Holborn London, WC1V 7JZ