COMMON SENSE PREVAILS IN BUSINESS RATES RULING

03/03/2017

Common sense has prevailed with the decision by the highest court in the land in a test case concerning buildings undergoing refurbishment.

The Supreme Court has upheld the established practice that properties which have been stripped out for redevelopment should not be liable for business rates.

This is a landmark decision which overturns an earlier ruling made in 2015 by the Court of Appeal.

Many landlords and developers had been adversely affected by the Court of Appeal decision, with the VOA refusing to zero-rate properties that were clearly incapable of beneficial occupation.

We have advised numerous clients and have already substantially reduced their business rates liabilities.

We are delighted that the Supreme Court's decision will now mean many of our clients will see their liabilities reduced even further, leading to increased savings.

The case of Newbigin v Monk centred on a dispute about the rateable value of a vacant three-storey office building in Sunderland.  The disagreement was between the owner, SJ & J Monk, and the valuation officer.

The owner had claimed that the property's rateable value should be reduced to a nominal £1 because it was unusable, as it had been stripped out for redevelopment.

However, the Court of Appeal decided that, unless it was uneconomical to repair a property, its original rateable value should remain in force.

That ruling left many of our clients frustrated, as they were still having to pay business rates while developing their properties.

The latest and final instalment of this saga means that the periods for which our clients have paid rates will now be reduced.

As the clock ticks towards the March 31 deadline to appeal current rateable values, I would urge developers to seek professional advice regarding any projects they have started or completed in the past few years.

For more information please contact our Head of Rating, Colin Whelan 07881 249812 who will be more than happy to assist. colin.whelan@scanlans.com

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