Rating Manual section 2: maintaining the rating list

Part 2: practice note 1 - revaluation 1995 - formula-rated hereditament valued by the Central Valuation Officer - matters specific to 1995 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 1994 (SI 1994/3121)

The Central Rating Lists (Amendment) Regulations 1996 (SI 1996/620)

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

The Non-Domestic Rating (Railways, Telecommunications and Canals) Regulations 1994 (SI 1994/3123)

Group 3

*The British Waterways Board and Telecommunications Industry (Rateable Values) Revocation Order 1994 (SI 1994/3281) *The Electricity Supply Industry (Rateable Values) Order 1994 (SI 1994/3282) *The British Gas PLC (Rateable Values) Order 1994 (SI 1994/3283) *The Railways (Rateable Values) Order 1994 (SI 1994/3284) *The Water Undertakers (Rateable Values) Order 1994 (SI 1994/3285) *The Electricity Supply Industry (Rateable Values) (Amendment) Order 1995 (SI 1995/962) *The Electricity Supply Industry and Water Undertakers (Rateable Values) (Amendment) Order 1996 (SI 1996/912) *The Gas Act (Rateable Values) (Modification) Order 1997 (SI 1997/224) *The British Gas plc (Rateable Values) (Amendment) Order 1997 (SI 1997/961)

2. Layout of the Central Rating Lists for 1995

A typical page from the central list for England for 1995 is shown as Appendix 2. It will be noticed that the style and content differ from a local list entry and also the 1990 central 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 6(1)(b) of SI 1994/ 3121. 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.

3. Central list hereditaments in detail

3.1 British Waterways

The Non-Domestic Rating (Railways, Telecommunications and Canals) Regulations 1994 provide that: 1. (a)“excepted hereditament” means any hereditament-

i. 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)

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

iii. consisting of office premises or consisting of a car park used wholly or mainly in connection with office premises; and 1. 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 occupied by or, if unoccupied, owned by the British Waterways Board;

(b) it comprises -

i. Waterways (including cuts and culverts, locks, gates, sluices, pumps, flood let-off valves, feeders, conduits, weirs, side ponds, ditches and drains);

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

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

iv. docks, wharves, piers, jetties, pontoons, moorings, slipways, land and buildings used for the building, maintenance or floating storage of craft, or for the provision, maintenance or servicing of inland waterways and plant or machinery used in connection therewith;

v. clay pits, dredging and other waste disposal tips;

vi. other land, buildings or structures or parts of buildings or structures used for the provision or servicing of facilities for traffic by, public access to, or enjoyment of, inland waterways, or for ancillary purposes; and

(c) is not comprised in an excepted hereditament. 1. The hereditaments described above shall be treated as occupied by the British Waterways Board and are relevant hereditaments by virtue of Part 1 of the Schedule to the Central Rating List Regulations 1994.

Changes from the 1990 List

a. The British Waterways central list property now comprises a single hereditament rather than a class of hereditaments. b. The central list entry has expanded to contain some hereditaments which were shown in local lists in 1990. c. The central list assessment is now valued conventionally, and not calculated by formula.

3.2 The Electricity Industry

Relevant hereditaments comprise:

I In the case of National Power plc, Powergen plc and Magnox 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 Nuclear Electric Limited;

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

III In the case of the National Grid Company plc;

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

IV In the case of:

*Eastern Group 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 and shown in local lists under the provisions of Part II of The Electricity Generators (Rateable Values) Order 1994 (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 or IV 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).

At present only Midlands Electricity plc and South Western Electricity plc are known to have generating capacity. Other suppliers involved in activity in this field have done so by forming separate joint venture companies.

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

Changes since the 1990 List a. Only the nuclear powered generation of Nuclear Electricity Limited (previously known as AGR & PWR Limited) falls within the class of relevant hereditaments. Any non-nuclear powered generation capacity that they might eventually occupy will be shown in local lists, and assessed in accordance with Part II of The Electricity Generators (Rateable Values) Order 1994 (as amended). b. The central list entry for National Grid plc no longer covers that company’s generation activities. These have now been disposed of and are shown in the appropriate local rating list. c. All central list hereditaments continue to be assessed by statutory formula.

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.

Changes since the 1990 List

None as at 1st April 1995. British Gas continued to be assessed by statutory formula. Following the Gas Act 1995, the industry was re-organised and British Gas Transco succeeded as occupier of the central list hereditaments. As a result of this a number of hereditaments, such as gas processing and storage installations, as well as a number of LPG domestic fuel undertakings, passed into local lists and became valued on a conventional basis. These changes became effective on 3rd March 1997. Local VOs affected received advice on an individual basis.

3.4 Railways

Relevant hereditaments comprise:

I In the case of London Underground Limited:

Hereditaments (other than excepted hereditaments) used wholly or mainly for the purpose of the parts of London Underground Limited’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 British Railways Board, Railtrack PLC, Docklands Light Railway Limited and The Tyne and Wear Passenger Transport Executive:

The hereditament situated in England (or in Wales where appropriate) described in the relevant regulation of The Non-Domestic Rating (Railways, Telecommunications and Canals) Regulations 1994 (see below). 1. Interpretation

“1993 Act” means the Railways Act 1993

“the Board” means the British Railways Board

“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.

Note: Whether intentionally or otherwise, the effect of the above provisions upon offices not situated on the operational land of a designated person is unexpected.

Broadly, such offices, if occupied by one of the designated persons, will be excepted hereditaments, as has always been the case, and should be shown in the local rating list.

If, however, they are owned by one of the designated persons but let to a licence holder or licence exempt operator they will not be excepted hereditaments and should not appear in local lists.

If VOs are asked to remove offices from local lists on the above grounds the circumstances should be reported to CVO immediately, and no further action taken until advised by CVO.

  1. 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.

(c) Docklands Light Railway Limited

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

(a) it is

(i) occupied by or, if unoccupied, owned by Docklands Light Railway Limited; and

(ii) used wholly or mainly for the purposes of the parts of its 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); and

(b) it is not comprised in an excepted hereditament

(d) Tyne and Wear Metropolitan Railway

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

(a) it is

(i) occupied by or, if unoccupied, owned by the Tyne and Wear Passenger Transport Executive; and

(ii) 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); and

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

The hereditaments described at (a) above shall be treated as occupied by the Board, those described at (b) above shall be treated as occupied by Railtrack PLC, that described at (c) above shall be treated as occupied by Docklands Light Railway Limited and that described at (d) above shall be treated as occupied by the Tyne and Wear Passenger Transport Executive.

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 undertaking 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

At the time of writing, it is understood that no advertisement rights owned by the undertakings are 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 leave the undertakers in rateable occupation. The situation is reviewed periodically and VOs will be notified of any change by CVO.

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 since the 1990 List

The comprehensive changes in drafting made by The Non-Domestic Rating (Railways) and Central Rating Lists (Amendment) Regulations 1994 (SI 1994/834) have been adopted with only one change for the 1995 lists. This change reverts to the pre 1st April 1994 definition of “the Board”, removing the words “or any of its subsidiaries”. It involves VO’s because it affects the demarcation between central and local rating lists.

Those hereditaments, occupied by subsidiaries of BRB, which were shown in local lists prior to 1st April 1994 and were removed as a consequence of the amendment introduced by SI 1994/834, revert to local lists with effect from 1st April 1995 and remain there until occupied by a licence holder or licence exempt operator following completion of the franchising process, when they will once more return to the central list. Appendix 3 contains the names of all known licence holders and licence exempt operators, and the dates upon which they took over occupation of former BRB property.

The only circumstances in which the above chain of events will not proceed as set out above are:

  1. When the franchise took effect prior to 1st April 1995, or

  2. where it is claimed that the BRB subsidiary in occupation on 1st April 1995 was itself a licence holder or licence exempt operator.

In neither of the above cases will a 1995 local list entry be appropriate. Where circumstance 1 above is the case VOs may delete hereditaments from the local list on the basis of this instruction, but should consult with the CVO where circumstance 2 is claimed.

British Railways Board, Railtrack and London Underground Limited continue to be assessed by statutory formula, but Docklands Light Railway and Tyne and Wear Metro are now valued conventionally.

3.5 Telecommunications

British Telecommunications plc central list hereditaments are defined as follows -

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 it is- a. occupied by, or if unoccupied, owned by British Telecommunications plc; and b. occupied by posts, wires, underground cables and ducts, telephone kiosks, towers, masts, switching equipment, or other equipment, or easements or wayleaves, being property used for the monitoring, processing or transmission of communications signals for the provision of telecommunications services.

Each hereditament described in the above paragraph shall be treated as occupied by British Telecommunications plc.

Exactly similar provisions are made in respect of Mercury Communications Limited, Energis Communications Limited, Racal BRT Limited (formerly BR Telecommunications Limited) and AT & T (UK) Limited.

Changes since the1990 List

a. Three new national network operators have been designated for central list purposes.

b. A common definition of hereditament now applies to all the undertakings. This has the effect of transferring a substantial number of BT hereditaments from local to central rating. Principal categories are towers, masts and telephone exchanges. Where a local list hereditament comprised both a telephone exchange and accommodation occupied for other purposes, not ancillary to the exchange and lying outside the scope of the above definition, the necessity for a division arises, with the non-exchange part of the former hereditament remaining in the local list. For valuation considerations refer to para. 10 of the main section. For transitional certificate considerations refer to Practice Note 4.

c. The extent of the Mercury central list hereditament remains unchanged.

d. Both BT and Mercury are now subject to conventional valuation methods, as are also the three new designated hereditaments.

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 II (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 & West Hampshire Water plc
  • Bristol Waterworks plc
  • Cambridge Water Company
  • Cholderton & District Water Company Limited
  • Dee Valley Water plc
  • Dwr Cymru Cyfyngedig
  • Eastbourne Water plc
  • East Surrey & Sutton Water plc
  • Essex and Suffolk Water plc
  • Folkestone & Dover Water Services Limited
  • Hartlepools Water Company
  • Mid Kent Water plc
  • Mid Southern Water plc
  • Mid Sussex Water plc
  • North Surrey Water Company
  • North West Water Limited
  • Northumbrian Water Limited
  • Portsmouth Water plc
  • Severn Trent Water Limited
  • South Staffordshire Water PLC
  • South West Water Services Limited
  • Southern Water Services Limited
  • Tendring Hundred Water Services Limited
  • Thames Water Utilities Limited
  • Three Valleys Water plc
  • Wessex Water Services Limited
  • West Kent Water plc
  • The York Waterworks plc
  • Yorkshire Water Services Limited

“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.

Changes since the 1990 List

The Schedule has been updated to reflect the changes in the water industry since 1990, but no material changes in the extent of the central lists coverage have been made. All central list water undertakings are valued by statutory formula.

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:

  • Barking Power Limited
  • The BOC Group plc
  • BP Chemicals Limited
  • BP Oil UK Limited
  • Conoco Limited
  • Conoco (UK) Limited
  • Esso Petroleum Company Limited
  • Esso UK plc
  • Fina plc
  • ICI Chemicals and Polymers Limited
  • Kelt UK Limited
  • Kinetica Limited
  • Manchester Jetline Limited
  • Mainline Pipelines Limited
  • North West Water Limited
  • The Rugby Group plc
  • Shell Chemicals UK Limited
  • Shell UK Limited
  • United Kingdom Oil Pipelines Limited
  • Walton - Gatwick Pipeline Company Limited

Changes since the 1990 List

The list of designated persons has been expanded to include the occupiers of all known qualifying pipelines. Central list pipelines continue to be assessed by conventional valuation methods. Valuation work is undertaken by SVU on behalf of the CVO.