Rating Manual section 2: maintaining the rating list

Part 2: practice note 1 - revaluation 1990 - formula-rated hereditament valued by the Central Valuation Officer - matters specific to 1990 lists

The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.

1. Statutory provisions

1.1 Outline

The secondary legislation consists of a series of Statutory Instruments made under the powers referred to at Para. 4.1. of the main section. The function of the first group of Regulations is to designate the persons (in practice they are all companies) whose hereditaments are to be shown in the lists, describe the classes of hereditaments to be shown and lay down the information to be shown in the lists.

The second group of Regulations deal with miscellaneous matters concerning the administration of the lists, including special provisions for the conduct of Appeals, the issue of transitional certificates, and the determination of the unit of assessment in certain cases.

The final group consists of Orders which lay down the method of calculation of Rateable Values for those classes of hereditament which are to be valued by statutory formula.

1.2 The statutory instruments

Group 1

  • The Central Rating Lists Regulations 1989 (SI 1989/2263)
  • The Central Rating Lists (Amendment) Regulations 1990 (SI 1990/ 502)
  • The Central Rating Lists (Amendment) (No 2) Regulations 1990 (SI 1990/1566)
  • The Central Rating Lists (Amendment) Regulations 1993 (SI 1993/ 166)
  • The Non-Domestic Rating (Railways) and Central Rating Lists (Amendment) Regulations 1994 (SI 1994/834)

Group 2

The Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 (SI 1993/291) Parts III & IV of these Regulations govern the manner in which alterations to the central lists are made. The conduct of appeals is dealt with by part VI, in common with local rating lists

Group 3

  • The British Gas PLC (Rateable Values) Order 1989 (SI 1989/2471)
  • The British Waterways Board (Rateable Values) Order 1989 (SI 1989/2472)
  • The Electricity Supply Industry (Rateable Values) Order 1989 (SI 1989/2475)
  • The Railways (Rateable Values) Order 1989 (SI 1989/2477)
  • The Telecommunications Industry (Rateable Values) Order 1989 (SI 1989/2478)
  • The Water Undertakers (Rateable Values) Order 1989 (SI 1989/2479)
  • The Gas and Electricity Industries (Rateable Values) (Amendment) Order 1990 (SI 1990/804)
  • The Electricity Supply Industry (Rateable Values) (Amendment) Order 1991 (SI 1991/959)
  • The Water Undertakers (Rateable Values) (Amendment) Order 1993 (SI 1993/772)
  • The Railways (Rateable Values) (Amendment) Order 1994 (SI 1994/999)

2. Layout of the central rating lists for 1990

A typical page from the central list for England for 1990 is shown as Appendix 1. It will be noticed that the style and content differ from a local list entry. The most significant of these, for the purposes of this section, are as follows:

a. There is only one entry per page, and the entry essentially relates to the Designated Person, rather than to the hereditaments. This has importance in relation to the way Notices of Alteration and Proposals are expressed.

b. Hereditaments are described in a general way, and are not individually identified. At first sight, this would appear to be contrary to the requirement of Regulation 3(1)(b) of SI 1989/ 2263. As long as the class of hereditaments is described in the list however, that requirement is satisfied by virtue of s67(9) & (9A) of the Act.

c. Two different RVs are shown. The column headed “RV” contains the figure required by statute. This RV, in the early years of the list, contains in many cases an adjustment for transitional relief because of the operation of the formulae. The second column, which is extra to the statutory requirement, shows what the RV would be if the transitional relief element in the formulae were not operative. It thus shows the underlying changes in RV attributable to alterations to the hereditaments and also provides figures on a basis which is statistically comparable to the RVs in local lists.

3. Central list hereditaments in detail

3.1 British Waterways

Relevant hereditaments (other than excepted hereditaments) comprise:

a. Waterways (including cuts and culverts, locks, gates, sluices, pumps, feeder conduits and weirs);

b. Aqueducts, basins, bridges, embankments, reservoirs and tunnels;

c. Lighthouses, beacons, buoys, breakwaters, boatlifts and other structures designed to aid navigation;

d. docks, wharves, piers, jetties, pontoons, moorings, slipways and buildings used for the floating storage of craft;

e. dredging and other waste disposal tips;

f. other land, buildings or parts of buildings and structures used for the provision of facilities for traffic by inland waterways or in harbours, or for ancillary purposes;

“excepted hereditament” means any hereditament-

a. consisting of or including a dock or harbour undertaking carried on under authority conferred by or under any enactment; (i.e. any statutory dock or harbour, not merely those to which the Docks and Harbours (Rateable Values) Order 1989 (SI 1989/2473) applies - see RM 5:350);

b. consisting of premises so let out as to be capable of separate assessment;

c. consisting of premises used as a shop, museum, car park, warehouse, place of public refreshment or as a workshop or premises for maintenance or repair or for the hiring or storage of craft; or

d. consisting of office premises; and

“inland waterway” includes any such waterway, whether natural or artificial.

3.2 The electricity industry

Relevant hereditaments comprise:

i) In the case of National Power plc, Powergen plc and Nuclear Electric plc;

Hereditaments (other than excepted hereditaments) wholly or mainly used for the purposes of the generation of electrical power or for ancillary purposes.

ii) In the case of the National Grid Company plc;

Hereditaments (other than excepted hereditaments) wholly or mainly used for the purposes of the generation, transformation and transmission of electrical power or for ancillary purposes.

iii) In the case of:

  • Eastern Electricity plc
  • East Midlands Electricity plc
  • London Electricity plc
  • Northern Electricity plc
  • NORWEB plc
  • MANWEB plc
  • Midlands Electricity plc
  • Scottish Power plc
  • Southern Electric plc
  • South Wales Electricity plc
  • South Western Electricity plc
  • Yorkshire Electricity Group plc

Hereditaments (other than excepted hereditaments) wholly or mainly used for the purposes of the functions of a public electricity supplier or for ancillary purposes.

“excepted hereditament” means a hereditament consisting of or comprising premises used wholly or mainly-

a. as a shop or other place for the sale, display or demonstration of apparatus or accessories for use by consumers of electricity (any use for the receipt of payments for the use of electricity being disregarded);

b. as office premises of a designated person, where those premises are not situated on operational land of that person; or

c. for both of the foregoing purposes; or

d. for the generation of electricity primarily by means of wind or tidal power; and

“public electricity supplier” has the same meaning as in section 6(9) of the Electricity Act 1989.

Note that hereditaments excepted under (d) above fall to be valued by formula under the provisions of The Electricity Generators (Rateable Values) Order 1989 (as amended). These are dealt with at RM5:530.

Note also that the definition of public electricity supplier referred to above does not extend to generating activity. Accordingly, where any of the undertakings in group III above generates electricity, by whatever method, the hereditaments occupied for that purpose will not fall within the definition of relevant hereditaments and must be shown in the local list. See (RM5:350). Only Midlands Electricity plc and South Western Electricity plc are known to have had generating capacity during the life of the 1990 List.

Any warehouse occupied by any of the electricity undertakings is a central list hereditament.

3.3 British Gas

Relevant hereditaments comprise hereditaments (other than excepted hereditaments) used wholly or mainly-

a. for the purposes of British Gas plc acting as a public gas supplier; or b. for the purposes of the supply, installation or maintenance of gas appliances, or for ancillary purposes; or c. for more than one of the foregoing purposes;

“excepted hereditament” means a hereditament consisting of or comprising premises used wholly or mainly-

a. for the manufacture of plant or gas fittings; b. as a shop or other place for the sale, display or demonstration of apparatus or accessories for use by consumers of gas (any use for the receipt of payments for the use of gas being disregarded); c. as office premises, where those premises are not situated on operational land of British Gas plc; or d. for more than one of the foregoing purposes; and

“public gas supplier” has the same meaning as in Part I of the Gas Act 1986.

Any warehouse occupied by British Gas is a central list hereditament.

3.4 Railways

Relevant hereditaments comprise, for the period 1st April 1990 to 31st March 1994:

I In the case of The British Railways Board, London Underground Limited and Docklands Light Railway Limited:

Hereditaments (other than excepted hereditaments) used wholly or mainly for the purpose of the parts of the designated person’s undertaking which are concerned with carriage of goods or passengers by rail, or for purposes ancillary to those purposes (including the purpose of exhibiting advertisements).

II In the case of The Tyne and Wear Passenger Transport Executive:

Hereditaments (other than excepted hereditaments) used wholly or mainly for the purposes of the Tyne and Wear Metropolitan Railway, or for purposes ancillary to those purposes (including the purpose of exhibiting advertisements)

“excepted hereditament” means a hereditament consisting of or comprising-

a. premises used as a shop, hotel, museum, or place of public refreshment; b. premises used wholly or mainly as office premises occupied by a designated person which are not situated on operational land of that person or of another person designated by virtue of [Part 4 of the Regulations]; c. premises or rights so let out as to be capable of separate assessment; d. premises (other than premises used in connection with the collection and delivery of parcels, goods or merchandise conveyed or to be conveyed by rail) used wholly or in part for purposes concerned with the carriage of goods or passengers by road transport or sea transport or with harbours, or for purposes incidental to such purposes.

Note that in the case of railway undertakings, unlike those of gas, water or electricity undertakings, offices are included in the central list assessments if they are situated on the operational land of any of the designated railway undertakers. Thus offices occupied by British Rail fall within the cumulo not only if they are built on top of a BR station, but also if they are built on top of a London Underground station. See Practice Note 2 for a fuller treatment of the subject of operational land.

Any warehouse used wholly or mainly for the purpose of storing parcels, goods or merchandise in connection with their transportation by road or by sea and where there has not also been, or is not to be, conveyance by rail by any designated undertaking should appear in the appropriate local list, but any warehouse occupied used wholly or mainly for other purposes (e.g. the storage of spares for locomotives or track) will fall within the class of central list hereditaments. Where a single building is used for both purposes, the paramount use should decide the issue, but where separate buildings within a single curtilage are used for different storage purposes, those satisfying the definition of an excepted hereditament should be made the subject of a local list entry.

In relation to the railway undertakings designated and listed in this section, the Central Rating List Regulations state that the purpose of exhibiting advertisements is to be regarded as a purpose ancillary to the purposes of the parts of the designated person’s concerned with the carriage of goods or passengers by rail.

Accordingly, hereditaments occupied for this purpose fall within the central list unless they come within the definition of excepted hereditaments, which in this context means advertisement sites or rights so let out as to be capable of separate assessment.

The position, in relation to advertisement rights owned by designated railway undertakings may therefore be summarised as:

Occupier rating list

Designated person central lists Any other person local lists

It is understood that, for the duration of the 1990 Lists, no advertisement rights owned by the undertakings were let out so as to be capable of separate assessment, since the terms of the contracts between the various designated railway undertakings and their advertising contractors left BR in rateable occupation.

No such special provisions are made in respect of advertisement rights owned or occupied by any other designated persons, and these, where they occur, should be entered in local rating lists.

Changes taking effect on 1st April 1994

The Railways Act 1993 prepared for the privatisation of the British Railways Board (BRB) by the creation of a new company, Railtrack PLC, in which was vested the track and stations of BRB, which retained only a small proportion of its former property. The alterations to the Central List Regulations have been designed to enable the privatisation of British Rail to proceed without creating the necessity for a series of amending SI s to cope with the creation of new companies occupying former BR hereditaments.

The principal change reflects the transfer of the bulk of hereditaments from the ownership of BR to Railtrack PLC. As hereditaments remaining in BR’s occupation are transferred to the physical occupation of franchisees, who are either licence holders or licence exempt operators, the rateable occupation of those hereditaments will transfer from BR to Railtrack. The only hereditaments in the occupation of franchisees which GVOs will need to ensure are entered in local rating lists are those which are owner-occupied, leased from landlords other than BR or Railtrack PLC, or consist of excepted hereditaments. None of these categories will have previously been the subject of central list assessment.

In the event of former BR or Railtrack hereditaments being sold off for purposes unconnected with the provision of railway services, or to persons who are neither licence exempt operators or licence holders, GVOs will need to enter these in local rating lists.

To reflect this change, The Non-Domestic Rating (Railways) and Central Rating Lists (Amendment) Regulations 1994 (SI 1994/834) were made. They amended The Central Rating List Regulations 1989 in three particulars:

  1. They designated the newly created Railtrack PLC.
  2. They introduced a new definition of a single hereditament for BRB, replacing the former class of hereditaments and defined a hereditament for Railtrack PLC in similar terms.
  3. They expanded the definition of “the Board” to include the subsidiaries of BRB.

The last of these is significant for local GVOs because it had the effect of incorporating a number of local list hereditaments, occupied by BRB subsidiaries, into the central rating list assessment of BRB with effect from 1st April 1994.

With effect from the same date, The Railways (Rateable Values) (Amendment) Order 1994 (SI 1994/999) amended The Railways (Rateable Values) Order 1989 (SI 1989/2477), by prescribing fixed RVs for both BRB and Railtrack PLC for the year 1994/1995 and suspending the application of the formula in the Order for that year.

The amended Regulation prescribed, in the case of The British Railways Board and Railtrack PLC.

“The hereditament situated in England (or in Wales where appropriate) described in the relevant regulation of The Non-Domestic Rating (Railways).

(1) Interpretation

“1993 Act” means the Railways Act 1993

“the Board” means the British Railways Board or any of its subsidiaries

“excepted hereditament” means a hereditament consisting of or comprising-

a. premises used as a shop, hotel, museum, or place of public refreshment; b. premises used wholly or mainly as office premises occupied by a person designated by regulation 5(1) of, and named in Part 4 of the Schedule to, the Central Rating List Regulations 1994 and which are not situated on operational land of that person or of another person so designated and named; c. premises or rights so let out as to be capable of separate assessment (other than those falling within paragraph (a)(ii) of the definitions of the British Railways Board and Railtrack PLC hereditaments; d. premises (other than premises used in connection with the collection and delivery of parcels, goods or merchandise conveyed or to be conveyed by rail) used wholly or in part for purposes concerned with the carriage of goods or passengers by road transport or sea transport or with harbours, or for purposes incidental to such purposes;

“heavy maintenance services” means the carrying out on locomotives and other rolling stock of maintenance services (including the detection and rectification of faults) other than light maintenance services (within the meaning given by section 82 of the 1993 Act);

“licence exempt operator” has the meaning given in section 10(6) of the 1993 Act;

“licence holder” has the meaning given in section 83(1) of the 1993 Act;

“railway services“ has the meaning given in section 82(1) of the 1993 Act;

A list of BR subsidiary businesses, indicating the dates sold and whether they were sold to licence holders, licence exempt operators or otherwise is provided at Appendix 3 to this section.

(2) Definition of Hereditaments

(a) British Railways Board

Anything situated in England which would (apart from [the relevant] Regulations) be more than one hereditament shall be treated as one hereditament and anything situated in Wales which would (apart from [the relevant] Regulations) be more than one hereditament shall be treated as one hereditament if -

(a) it is

(i) occupied by or, if unoccupied, owned by the Board; or

(ii) let or licensed by the Board to a licence exempt operator or a licence holder (other than Railtrack PLC),

wholly or mainly for the purposes of providing railway services or heavy maintenance services, or for purposes ancillary to those purposes (including the purpose of exhibiting advertisements); and

(b) it is not comprised in an excepted hereditament.

(b) Railtrack PLC

Anything situated in England which would (apart from [the relevant] Regulations) be more than one hereditament shall be treated as one hereditament and anything situated in Wales which would (apart from [the relevant] Regulations) be more than one hereditament shall be treated as one hereditament if -

(a) it is

(i) occupied by or, if unoccupied, owned by Railtrack PLC; or

(ii) let or licensed by Railtrack PLC to a licence exempt operator or a licence holder (other than the Board),

wholly or mainly for the purposes of providing railway services or heavy maintenance services, or for purposes ancillary to those purposes (including the purpose of exhibiting advertisements); and

(b) it is not comprised in an excepted hereditament.

3.5 Telecommunications

Relevant hereditaments comprise, for British Telecommunications plc-

All hereditaments occupied by posts, wires, underground cables and ducts, telephone kiosks, switchgear and other equipment not within a building, or by easements or wayleaves, being property used for the purposes of telecommunications services and for Mercury Communications Limited-

All hereditaments occupied by posts, wires, underground cables and ducts, telephone kiosks, towers, masts, switchgear and other equipment, or by easements or wayleaves, being property used for the purposes of telecommunications services.

Note the italicised differences between the two definitions, which reflect the different technology used in the two systems. The use of the words “not within a building” in the case of BT means that their telephone exchanges are not relevant hereditaments, and accordingly appear in local lists.

The absence of such words from the Mercury definition means that their trunk access nodes (TANs), which perform an equivalent function but consist of computer equipment located in an office environment where other tasks are also undertaken, are relevant hereditaments, along with the office accommodation forming part of the same hereditament.

Any warehouse occupied by either undertaking should be shown in the appropriate local list.

3.6 Water supply

The relevant hereditaments are hereditaments (other than excepted hereditaments) used wholly or mainly for the purposes of a water undertaker under Part III of the Water Industry Act 1991 or for ancillary purposes. Note that where hereditaments are occupied wholly or mainly for the purposes of a Water Undertaker under Part I (provision of recreation facilities) or Part IV (sewage disposal) of that Act a local list entry will be appropriate. The water undertakings which constitute designated persons are as follows:

Anglian Water Services Limited Bournemouth & District Water Company Bristol Waterworks Company Cambridge Water Company Chester Waterworks Company Cholderton & District Water Company Limited Colne Valley Water Company East Worcestershire Waterworks Company

  • Eastbourne Water Company Essex Water plc
  • Folkestone & District Water Company
  • Hartlepools Water Company
  • Lee Valley Water plc
  • Mid Kent Water Company
  • Mid Southern Water Company
  • Mid Sussex Water Company
  • North East Water plc
  • North Surrey Water Company
  • North West Water Limited
  • Northumbrian Water Limited
  • Portsmouth Water plc
  • Rickmansworth Water plc
  • Severn Trent Water Limited
  • South Staffordshire Water Company
  • South West Water Services Limited
  • Southern Water Services Limited
  • Suffolk Water Company plc
  • Sutton District Water plc
  • Tendring Hundred Water Company
  • Thames Water Utilities Limited
  • Wessex Water Services Limited
  • West Hampshire Water Company
  • West Kent Water Company
  • Wrexham & East Denbighshire Water Company
  • The York Waterworks plc
  • Yorkshire Water Services Limited

Note that the acquisition of a number of these undertakings by other holding companies took place during the currency of the 1990 list. In most cases this did not constitute a merger of any of the designated persons, each of which retained its individual legal identity. The exceptions to this, which were catered for by amending legislation, were the absorption of East Worcestershire Waterworks Company by Severn Trent Water Limited and the merger of Colne Valley Water Company, Rickmansworth Water plc and Lee Valley Water plc into Three Valleys Water plc

“excepted hereditament” means a hereditament consisting of or comprising premises used wholly or mainly-

a. for the manufacture, storage, sale, display or demonstration of apparatus or accessories for use by consumers of water (any use for the receipt of payments for the use of water or sewerage services being disregarded); or b. as office premises of a designated person, where those premises are not situated on operational land of that person; or c. for both of the foregoing purposes.

Any warehouse used wholly or mainly for the purpose of storing apparatus or accessories for use by consumers of water and occupied by any water undertaking should appear in the appropriate local list, but any warehouse occupied used wholly or mainly for other purposes will fall within the class of central list hereditaments. Where a single building is used for both purposes, the paramount use should decide the issue, but where separate buildings within a single curtilage are used for different storage purposes, those satisfying the definition of an excepted hereditament should be made the subject of a local list entry.

3.7 Long distance pipelines

The relevant hereditaments are cross-country pipelines (within the meaning of the Pipe-lines Act 1962) situated within the area of more than one charging authority. A cross-country pipeline is one which exceeds 10 miles in length.

The designated persons whose relevant hereditaments appear in the central lists are as follows:

  • The BOC Group plc
  • BP Chemicals Limited
  • BP Oil UK Limited
  • British Steel plc
  • Conoco Limited
  • Conoco (UK) Limited
  • Esso UK plc
  • Imperial Chemical Industries plc
  • Mainline Pipelines Limited
  • The Rugby Group plc
  • Shell Chemicals UK Limited
  • Shell UK Limited
  • United Kingdom Oil Pipelines Limited 13
  • Walton - Gatwick Pipeline Company Limited 14

Note that these hereditaments, although shown in the central lists, are valued by conventional methods. Detailed instructions for the valuation and office procedures concerning this class will be found at RM5:780.