Rating Manual section 6: valuation practice

Part 12: rounding valuations

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

1. Concept

Traditionally, the rounding of a valuation has been a matter for individual valuers using common sense. The result of an arithmetical calculation might, for example, be £10,011 and to adopt this as a rateable value would give a misleading impression of accuracy. The figure sought in any valuation is an estimate of likely letting value (or sale value for other purposes) and valuers cannot value to such a precise figure as in this example. Quite reasonably, a figure of £10,000 would be adopted and similarly if the result of the arithmetical calculation was £9,989 this would be rounded up to £10,000.

Particularly because of the publication of summary valuation calculations on the Intranet any rounding of valuation calculations is now visible. It is desirable that a common approach to rounding is adopted across the Agency so that no ratepayer can, however unreasonably, feel he or she has in some way been disadvantaged compared to another ratepayer.

2. Compiling rating lists

When compiling rating lists it is desirable for VOs to adopt a common rounding policy so that all ratepayers’ assessments are treated the same.

The Rating Support Application (RSA) has for many years prior to 2005 had default rules built into it to provide suggested rounding. For the 2005 revaluation these default rules (Appendix A) were adopted for all rateable values whether valued using RSA or prepared using other software or by hand. This has also been done for Reval 2010 where the standard rounding scale has been followed.

3. Exception

The exception is with receipts based valuations where Fair Maintainable Receipts is estimated and a suitable percentage applied to the FMT. Two subjective judgements are applied in this calculation and it is appropriate for the caseworker to stand back and look in deciding on the valuation, rather than apply the standard rounding process.

4. Consideration of proposals

Rounding, though, is not just something to consider when compiling new lists so as to produce sensible and consistent rateable value figures. Rounding also needs to be considered in the course of discussion relating to a proposal. Usually it will be appropriate to follow the rounding guidance but it may be that an agreement is reached to round up or down to arrive at a settlement, perhaps to reflect some overall advantage or disadvantage not reflected elsewhere. Here it is not always appropriate to follow the rounding guidance and agreements may be reached at figures which both parties are content to agree.

5. Revisiting agreed rateable values

It is understood by CEO that some firms have used IT routines to identify 2005 lists rateable values that have not been rounded in accordance with the rounding scale and have suggested these should be altered by VO action. Generally these are rateable values that have either formed the subject of agreement between professional surveyors and the VO pursuant to a proposal, or have been maintained following withdrawal of a proposal. In most cases agreed assessments will have resulted from extensive discussion and negotiation and may have involved all sorts of considerations in arriving at the agreed figure. It is not considered appropriate to revisit and alter these agreements merely to comply with the rounding scale. Similarly, in other cases the assessment may have been maintained following withdrawal and suggest the ratepayer’s representative was content with the existing figure; again, these assessments should not be altered.

In the case of assessments that have not been the subject of a proposal, but which have not been arrived at in accordance with the rounding guidance, no action should be taken to reopen them. It is reasonable to assume that if there has been no proposal made against the assessment, both the VO and the ratepayer are content with the figure in the rating list; this is consistent with the position where a proposal has been withdrawn even though the figure in the list does not comply with the rounding guidance.

Appendix 1: the rounding scheme

Total RV

Greater than

Total RV

Less than

Rounded down to next (£)

0 200 no further rounding
200 500 5
500 1,000 10
1,000  2,500 25
2,500 5,000 50
5,000 10,000 100
10,000 50,000 250
50,000 100,000 500
100,000 250,000 1,000
250,000 500,000 2,500
500,000 1,000,000 5,000
1,000,000   10,000

The extent of the rounding for some value ranges has been criticised and consideration will be given to narrowing these for the 2017 Revaluation.