Part 5: effective dates
The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.
1.1 The determination of the effective date of an alteration of a list is the final step in a sequence of procedural steps which must be addressed when considering any list alteration. It is inextricably linked with the concept of material day and reference should be made to RM2 : Section 3 dealing with material day.
1.2 It is convenient to restate the sequential process described at RM 2 : 3 para 5.2 which should be gone through and of which determination of the effective date forms an integral part. The effective date stage is stage 5 in the sequence shown below. 1. What type of list alteration is being contemplated? 2. What is the material day?
See the summary of SI 1992 No 556 as amended by SI 2005 No 658 (England) and WSI 2005 No 758 (Wales) at Appendix 2:3:1. 1. What are the circumstances existing on that day?
These are the matters to be taken into account for valuation purposes and which are specified in Schedule 6 paragraph 2(7). See RM 2 : 3 para 3.3 for details of the relevant matters. 1. What is the RV taking account of those circumstances using values as applicable to the AVD?
A valuation should be carried out using values appropriate to the tone of the list. The tone of the list provision is contained in Schedule 6 paragraph 2(4) LGFA 1988. 1. What is the day from which all those circumstances and value applied?
Only at this stage should one be considering the effective day for the list alteration. Care must be exercised where there are restrictions on effective day because of the operation of regulations 13 (1990 and 1995 lists) and 13A (2000 list) of the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 (SI 1993/291 as amended) and Regulation 14 of the Non Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 for the 2005 and 2010 lists (SI 2009/2268) or the equivalence in the NDR (Alteration of Lists and Appeals) (Wales) Regulations (WSI 2005/758) applicable to Wales.
Note that Reg 13 of SI 1993/291 (as amended) applicable to pre-2000 lists is subject to Regs 15 and 16 in limited circumstances (effective dates limited to 1 April 1991 or 1 April 1992). It is not expected that this will impact on anything but a minute number of cases, if any, now outstanding.
Regs 13 and 13A of SI 1993/291 (as amended) applicable to pre-2005 lists are both subject to Reg 44 (Orders of the valuation tribunal). Under Reg 44(1) a valuation tribunal is constrained in the alteration it may order by the provisions of, or provisions made under, the Local Government Finance Act 1988. This is however, subject to Reg 44(4) which allows the effective date of a list alteration to be the date of the tribunal’s decision in circumstances where the decision is that the disputed rateable value is greater than both that shown in the list at the date of the proposal and the amount contended for in the proposal.
In a similar manner, Reg 14 of SI 2009/2268 applicable to the 2005 and 2010 Lists is subject to Reg 38 (4) of the Valuation Tribunal for England (Council Tax and Rating Appeals)(Procedure) Regulations 2009 therein. 1. Is there any further action to be taken?
Having dealt with the list alteration in hand, one should go on to consider whether any associated further action is necessary. This may be to deal with
(i) another list alteration, the need for which has become apparent through dealing with the first alteration. For example, in settling a compiled list appeal one may have become aware of a material change of circumstance warranting a further alteration in the list,
(ii) issuing a transitional relief certificate. The certificate regulations and various work aids to assist in determining whether a certificate is required are available from the Transitional Relief Homepage Note a certificate can only be produced via RSA if there is an existing case. If a manual certificate is produced a copy should be retained within EDRM.
2. Statutory basis
2.1 Regulations 13 and 13A of the Non-Domestic Rating (Alteration of Lists and Appeals) Regulations 1993 (as amended) (SI 1993 No 291) apply to alterations made to the 1990, 1995 and 2000 lists whilst Regulation 14 of SI 2009 No 2268 and WSI 2005 No 758 refers to alterations made to the 2005 List after 1st October 2009 and the 2010 list.
3. Regulation 13 (1990 and 1995 lists)
3.1 Regulation 13 is sub divided so as to separately deal with each of the different circumstances in which an alteration of the list may be made. Rather like material day, the effective date of an alteration will depend on the type of list alteration being considered.
3.2 Application of Reg 13
See Appendix 2:4:1 for details of Regulation 13 and comment as to its application.
4. Regulation 13A (2000 lists)
4.1 Regulation 13A is similar to Regulation 13 but has important differences. The most important difference is the restriction on some effective dates in respect of certain types of list alteration to the first day of the financial year in which either the proposal is served on the VO or the year in which the VO alters the list instead of the actual day of the event. During the first year of the 2000 list the effective date of a proposal served after 30 September 2000 was limited to 1 October 2000 by Reg 13A (2)(a)(ii).
4.2 Financial year
Sections 145(3) and 146(7) of the Local Government Finance Act 1988 define a financial year as 12 months beginning 1 April in any year.
4.3 Application of Reg 13A
See Appendix 2:4:2 for details of Regulation 13A and comment as to its application. Amendments to the 2000 list can only now be made to give proper effect to a proposal, assistance in determining the correct effective date for any outstanding 2000 list proposals may be obtained from the Technical Advisors via your Team Leader.
5. Regulation 14 of SI 2009 No 2268 and WSI 2005 No 758 (2005, 2010 and 2017 Lists)
5.1 The regulations provide that the effective date of an alteration to a list will generally be the day on which the circumstances giving rise to the alteration first occurred. (Reg 14 (2)). The exceptions are:
a. where an alteration is made to give effect to a completion notice, the alteration shall have effect from the day specified in the notice (Reg 14 (3)) or a different day being substituted, agreed or determined under Schedule 4A to the Local Government Finance Act 1988 (Reg 14 (4))
b. where the day the circumstances arose is not reasonably ascertainable, the effective day will be the day the list is altered or the day the originating proposal was served (Reg 14 (5))
c. a correction of the inaccuracy in the compiled list that will increase the RV shown in the list shall have effect from the day on which the alteration is made (Reg14 (7)(a))
d. a correction arising from an earlier alteration that will increase the RV shown in the list for the hereditament to which the inaccuracy relates shall have effect from the day on which the alteration is made (Reg (14)(7)(b))
See Appendix 2.4.3
5.2 It should be remembered that the effective date applicable to an alteration will also be dependant on when the circumstances existing on the Material Day first arose.
5.3 Alterations to the 2010 list post 01.04.15 - England - Limitations to the Effective Date
Where you are altering a list as a result of a proposal received before 01 April 2015 then the effective date will be the day of the event or 01April 2010.
Where a proposal is received on or after 01 April 2015 then the effective date is limited to 01.04.15 or the day of the event if this is later.
Exceptions to this are a proposal served within 6 months, against a VON or following a relevant tribunal decision. The decision of the tribunal must have been made before 01 April 2015 and the VON must have been served before 01 April 2016.
A VON served before 01 April 2016 will not have a limited effective date, alterations to the list by VON made on or after 01April 2016 will have an effective date limited to 01April 2015 or the day of the event if this is later.
In the period between 01 April 2015 and 31 March 2016 a consequential VON should be used to alter the list following an agreement made on a proposal where the effective date is restricted because the proposal was served after 01 April 2015.
5.4 The relevant effective dates for the 2017 list are shown in a table, these follow the rules in paragraphs 5 above.
6. Frequently asked questions regarding effective date
6.1 New occupier is not a reason to limit effective date
The effective date of a list alteration made as a consequence of a proposal made by a new occupier is not limited to the date from which the present occupier took up occupation. Once a valid proposal has been made, on whatever grounds, and an alteration to the list is considered to be appropriate, the only limitations on the effective date of that alteration are those provided by Regulation 13 (1990 and 1995 lists), Regulation 13A (2000 list) or Regulation 14 (2005 and 2010 list) and the appropriate Material Day.
6.2 Split or merger occurring pre 1 April 2000 but not reflected in list until post 1 April 2000
Some ambiguity in the application of the regulations to these circumstances existed prior to the introduction of Reg 13A(4A) by the Non-Domestic Rating (Alteration of Lists and Appeals) (Amendment) (England) Regulations 2002 (SI 2002 No 498). This provides clarification that where a hereditament has been split/merged the list alteration can be backdated to 1 April 2000 where the split/merger had occurred before the 2000 list came into effect.
6.3 List alteration after a series of un-reflected value significant MCCs (2005 Lists)
6.3.1 Confusion can arise where a list falls to be altered but there have been a number of individual MCCs which are not reflected in the current assessment. The key to the problem is to understand that any list alteration can only have one material day and one effective date. Where there are circumstances requiring list alterations for situations having different material days consideration must be given to the possibility of making one single alteration or making more than one list alteration. Advice should be sought from the Technical Adviser via the Team Leader in case of uncertainty. See RM Vol 2 Section 3 regarding Material Day.
6.3.2 Following the process set out in paragraph 1.2 above, the first thing is to identify the type of list alteration (here we know we are dealing with a number of MCCs) and then identify the material day according to SI 1992 No 556, as amended, for MCCs which would result in an alteration of the list compiled on or after 1 April 2005,
6.3.3 Having identified the material day, identified the relevant matters existing on that day and done a valuation, consideration must be given to the effective date of the list alteration. ( see paragraphs 3 to 5 above) For the 2000 List, note the special arrangement under Regulation 13A (7) for MCC proposals served in April in respect of MCCs occurring in March. Such a proposal is deemed to have been served in March but this is for purposes of determining effective date only. It does not change the date of service for other purposes (eg. Reg 4A (proposals), Regs 6 – 12 of SI 1993/291 (procedure after proposal received) or the Material Day regulations).
The rateable value determined as appropriate on the material day can only apply for as long as the circumstances (matters mentioned in LGFA Sched 6 para 2(7)) on the material day existed. When there is a change in those matters then a different rateable value may be appropriate. The circumstances on which the value on the material day is based will only have existed from the date of the change in those matters, the date of the MCC. For the 2000 lists, it is not possible to individually deal with a series of earlier MCCs and adopt different, individual effective dates (unless proposals were made in respect of each one before the next one occurred). Therefore, any earlier MCCs that occurred and which were not already reflected in the RV can only be taken into account to the extent they are reflected in the rateable value calculated as at the material day of the most recent MCC.
It is possible for the 2005 and 2010 lists to reflect a series of earlier MCC’s by way of Valuation Office notices by virtue of Regulation 3(7) of SI 1992/556 as amended by SI 2005/658 and Regulation 14 (2) of SI 2009/2268 or Regulation 14 (2) WSI 2005/758. For alterations pursuant to proposals, the rules in relation to 2005 and 2010 lists remain the same as applied to earlier lists.
It should be noted that references to MCCs in this example do not include changes to the identity of the hereditament itself that are specifically dealt with in Reg 3(4) of the Non-Domestic Rating (Material Day for List Alterations) Regulations 1992 [SI 1992 No 556]. Reg 3(4) covers the hereditament coming into existence/ceasing to exist; ceasing to be/becoming domestic property or exempt property; ceasing to be/becoming required to be shown in the central list; or ceasing to be/becoming part of a Billing Authority’s area through boundary changes. These type of changes have as their material day the day on which the circumstances giving rise to the list alteration occurred, both for proposals and VOR/BAR cases.
6.4 List alteration after a series of un-reflected value significant and insignificant MCCs
6.4.1 Where there has been a value significant MCC in respect of which the list has not been altered and this is then followed by a value insignificant MCC the VO will still be able to alter the list pursuant to a proposal with an effective date of the value significant MCC. The most recent MCC is not a limitation on the effective date if it is of no value effect on the hereditament.
6.4.2 The same process as described at paragraph 6.3 above applies. Support for the argument that it is only value significant MCCs which limit the effective date is taken from the wording of regulations 13(5) and 13A(5) of SI 1993/291 (as amended) dealing respectively with the 1990 and 1995 lists, and the 2000 lists. Both state that an alteration to reflect a MCC “ … shall have effect from the day on which the circumstances giving rise to the alteration arose ….. “. This is provided similarly in Regulation 14(2) of SI 2009/2268 but without limiting the effective date to the first day of the financial year in which the alteration is made. Therefore, there must be circumstances giving rise to an alteration. Only value significant circumstances give rise to an alteration.
6.4.3 For 2005 and 2010 lists alterations other than by settlement of a proposal, a series of MCC’s may be reflected in sequence even if this does not happen until after the last event takes place.