Since the Government increased the level of empty rates to 100% in 2008, there's been a series of high profile court and tribunal cases to determine exactly when empty business rates will apply on empty properties.
Read on to find out what these cases mean for owners and developers.
What are the court cases?
Earlier this year, the Court of Appeal decided in the Newbiggin v Monk case that one floor in a building that had been stripped out should continue to be rated and continue to pay rates. Following the Monk case, the Valuation Office Agency (VOA) has been focussing on demolition and refurbishment schemes. On the back of this case, they have sought to charge rates to major reconstruction schemes and, in some cases, where properties were in the course of being demolished.
Recently, an Upper Tribunal decision has put the brakes on the VOA relying on a strict interpretation of Newbiggin v Monk. In this case, concerning a redevelopment site in Tunbridge Wells, the Upper Tribunal ruled that the site was not rateable and that the VOA cannot ignore such factors as planning consents (the lack of) and the fact that the building will be part of a wider development site.
What does this mean?
Owners and developers have found empty rates to be a real burden on development sites and this decision may provide an avenue to challenge empty rates charges in such circumstances.
Careful analysis of the redevelopment scheme is required and how it affects the business rates position. It may be possible to distinguish Monk refurbishment cases from the vast range of other circumstances that arise as buildings come up for partial or full redevelopment, extension and modification, or change of use.
What should you do if you are paying rates?
If you are paying rates on development sites, please contact your usual PwC advisor or the My Taxpartner team. We have a great deal of experience in taking rating cases successfully to Tribunal and so are well placed to assess the relative strengths and merits of a prospective appeal.
If you require further information, or would like to discuss, please contact Phil Vernon or your usual PwC contact.