Rating Manual section 6: valuation practice

Part 6: part B - churches, church and chapel halls and similar buildings

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

1. Introduction

1.1 The provisions of Schedule 5 paragraph 11 Local Government Act 1988 [LGFA 1988] (as amended) exempt from rating property in the following categories where specified requirements are satisfied:-

  • Churches, chapels and other places of public religious worship
  • Church halls, chapel halls and similar buildings
  • Ancillary administrative premises.

2. The Law and the ‘Tests’

Paragraph 11 of Sch 5 LGFA 1988 provides:-

11 (1) A hereditament is exempt to the extent that (Test 1) it consists of any of the following:

a. a place of public religious worship (Test 2) which belongs to the Church of England or the Church in Wales (within the meaning of the Welsh Church Act 1914) or is for the time being certified as required by law as a place of religious worship (Test 3);

b. a church hall, chapel hall or similar building (Test 4) used in connection with a place falling within paragraph (a) above (Test 5) for the purposes of the organisation (Test 6) responsible for the conduct of public religious worship in that place (Test 7).

11 (2) A hereditament is exempt to the extent that it is occupied by an organisation responsible for the conduct of public religious worship in a place falling within sub-paragraph (1)(a) above (Test 8) and:

a. is used for carrying out administrative or other activities relating to the organisation of the conduct of public religious worship in such a place; (Test 9) or

b. is used as an office or for office purposes, or for purposes ancillary to its use as an office or for office purposes (Test 10).

11 (3) In this paragraph ‘office purposes’ include administration, clerical work and handling money; and ‘clerical work’ includes writing, book-keeping, sorting papers or information, filing, typing, duplicating, calculating (by whatsoever means), drawing and the editorial preparation of matter for publication.

3. “To the Extent that” - (Test 1)

3.1 Historical Context

The legislation provides that hereditaments are exempt “to the extent that”. This is a form of words which is common to all the exemption classes within Schedule 5 and the importance of these words cannot be over stressed.

Under s.39 General Rate Act 1967 exemption could only be considered in respect of a hereditament as a whole. However, it was not a requirement of s.39 for the whole of the hereditament to be exclusively used for public religious worship. In the case of Ninth Church of Christ Scientist v Westminster City Council and Cane (VO) 1958 51 R&IT 175 the hereditament comprised a place of public religious worship together with church rooms not used for worship eg. members’ room, clerk’s room, and treasurer’s room. It was held that the user of these rooms was ancillary to the place of public religious worship and their existence would not deprive the whole of the hereditament of exemption.

The wording of paragraph 11(1)(a) uses “place of” rather than “property used for” a place of public religious worship but it is considered that the change of wording to include the phrase “to the extent that” removes such parts ancillary to a single place of worship from exemption. Many will now be specifically covered by the wording of paragraph 11(2) and (3) relating to administrative uses ancillary to churches etc. See paragraph 7 below.

3.2 Exemption within a larger hereditament

Exemption may now be available to places of public religious worship, within larger hereditaments used for other purposes. This will be to the extent that the hereditament consists of a place of public religious worship and the requirements as to public worship, certification etc. are satisfied eg a chapel in a public school which is certified, used and advertised as a place of public religious worship will be exempt.

The wording should be construed as giving exemption to any parts of hereditaments which are used for the prescribed purposes, rather than restricting relief to those hereditaments which are used entirely for such purposes.

3.3 Spatial Test

Para 11(1), which relates to places of religious worship, church/chapel halls and similar buildings, only gives an exemption to a hereditament to the extent that it is such a place that satisfies the prescribed purpose and the words should be given a spatial rather than a temporal meaning. Therefore, a separate part of a building, not used for the prescribed purpose should be separated from the remainder by an identifiable barrier, eg a wall, a partition or similar. Separation by use or function will not be sufficient.

3.4 Temporal-Spatial Test for Offices etc

However, when considering administrative and other activities, offices or office purposes in relation to paragraph 11(2), “to the extent” that can be applied on a temporal spatial basis. In Gallagher(VO) v Church of Jesus Christ of Latter Day Saints, LT [2006] RA 1; HL [2008] RA 317, the Lands Tribunal, Court of Appeal and House of Lords confirmed the approach by the LT President George Bartlett QC.

At paragraph 47 of the Lands Tribunal decision the President said:

“The words “to the extent that” also appear in other exemption provisions in Schedule 5 of the 1988 Act and they seem to me to be a useful fair and practical addition to the provisions of the earlier legislation. Depending on the context in which they appear they are capable of bearing either a physical or a temporal meaning or both (see Ryde D [617] – D [627]) and both parties in the present case agreed that this was so. The exemption in sub paragraph (i) is given to the extent that the hereditament “consists of” a place of public religious worship or a Church hall etc. The qualification here in my judgement, is a purely physical one, so that those parts of a hereditament that are neither a place of public religious worship nor a Church hall etc are excluded from the exemption. But the fact that, for instance, a Church is used from time to time for secular concerts or a Church hall is let out for functions unconnected with the Church would not lead to reduction in the relief that is accorded. The Church would still be a Church and a Church hall would still be a Church hall and, to the extent that the hereditament physically comprises one or other or both of these, it would “consist of” of it or them for the purposes of the exemption. The qualification as it applies in sub paragraph (ii), on the other hand, in my view operates in terms of both space and time. That is because exemption is conferred to the extent that the hereditament is occupied by an organisation of the sort specified and used as specified in (a) or (b), and a use can be viewed both in terms of time and the space to which it relates”.

In the Court of Appeal, Lord Justice Neuberger said:

“The qualification here, in my judgment, is a purely physical one, so that those parts of a hereditament that are neither a place of public religious worship nor a church hall etc are excluded from the exemption. But the fact that, for instance, a church is used from time to time for secular concerts or a church hall is let out for functions unconnected with the church would not lead to a reduction of the relief that is accorded. The church would still be a church and a church hall would still be a church hall and, to the extent that a hereditament physically comprised one or both of these, it would ‘consist’ of it or them for the purposes of the exemption. In relation to the Temple in this case, it appears to me that the inclusion of the new words “to the extent that” into the statutory provision do not begin to justify any ground for distinguishing, or failing to apply, the reasoning of the House of Lords in the Henning case to the facts of this case. Insofar as it is contended that the use of the Temple, or any part of it, falls within the ambit of paragraph 11(1)(a).”

In the House of Lords, Lord Hope of Craighead observed at para 38:

“The legislation is now qualified by the words “to the extent that”. Their effect is to require an apportionment to be made between those parts of the building that qualify for the exemption and those which do not.”

He continued at Para 39:

“…. The words “to the extent that” which qualify para 11(2) would require an apportionment if a definable part of the building was occupied and used for these purposes.”

And Para 41:

“…… I agree with Mr Sumption that this conclusion turns on fine distinctions, because areas used for the same purposes which were within the Stake Centre and not sufficiently clearly identifiable for apportionment would qualify for exemption along with the rest of the building of which they formed part. But the valuation officer must take each building on the hereditament as he finds it, according to the way it is actually occupied and used by the ratepayer.”

Lord Mance entered a reservation about Lord Hope’s use of the words “definable part” but in Ebury(VO) v The Church Council of the Central Methodist Church LT [2009] RA 239, the LT President, Mr Bartlett (at Para 35) said:

“Mr Lewsley relied on what was said in both these speeches for his contention that the words “to the extent that” have only a spatial connotation wherever they appear in Schedule 5. I do not see how what Lord Mance said could possibly lend support to that contention. In relation to the passages in Lord Hope’s speech it seems clear that he was addressing himself to the question of whether part of an otherwise non-exempt building might qualify for exemption. That there should need to be a definable part of the building that is used for an exempt purpose before exemption can arise is understandable, since, as Lord Hope said, it would be necessary for the part in question to be identified in the rating list. Where, on the other hand, the building in question is mainly used for exempt purposes but is partly not so used there would be no need for the purpose of an entry in the list to define the spatial extent of the non-exempt use. The entry could relate to the whole of the building, state that it was partially exempt and include a value that reflected the degree of non-exempt use. (That could have been done by the VO in the present case instead of entering the shop as a separate hereditament.) Lord Hope, in my judgment, was not addressing himself to this latter situation, so that I do not think that what he said supports Mr Lewsley’s contention.”

Accordingly, in paragraph 11(1) the “to the extent that“ test is applied on a spatial basis, whereas in paragraph 11(2) a temporal-spatio approach is applicable.

Consequently, difficulties exist where new churches have been constructed as multi-functional buildings incorporating large conference/concert/sports halls which are only used as a place of religious worship on a Sunday and for secular activities on other days of the week. In such cases the identification of the various users at the property will determine whether a spatial or temporal-spatio test is to be applied. It is possible for parts of the hereditament used for matter contained in paragraph11(2) to qualify on certain days and not on others.

As the issue of exemption will fall to be determined on a day to day basis - a local rating list must show each and every day in which there is a change s.42 LGFA 1988 in these cases, guidance must be sought from the relevant Technical Adviser.

4. “A Place of Public Religious Worship” (Test 2)

The words “a place of religious worship” were previously to be taken as meaning places to which people come to do reverence to or for the veneration of God (not solely the Christian God). See R v Register General, ex parte Segerdal and Church of Scientology of California [1970] RA 439:

“worship …which must have some at least of the following characteristics: submission to the object worshipped, veneration of the object, praise, thanksgiving, prayer and intercession.”

However following the Supreme Court decision in R (on the application of Hodkin and another) v Registrar General of Births, Deaths and Marriages [2013] UKSC 77, [2013] All ER (D) 100, Lord Neuberger made the following observations:

“51. Unless there is some compelling contextual reason for holding otherwise, religion should not be confined to religions which recognise a supreme deity. First and foremost, to do so would be a form of religious discrimination unacceptable in today’s society. It would exclude Buddhism, along with other faiths such as Jainism, Taoism, Theosophy and part of Hinduism… “

And at Para 57:

“Of the various attempts made to describe the characteristics of religion, I find most helpful that of Wilson and Deane JJ. For the purposes of PWRA, I would describe religion in summary as a spiritual or non-secular belief system, held by a group of adherents, which claims to explain mankind’s place in the universe and relationship with the infinite, and to teach its adherents how they are to live their lives in conformity with the spiritual understanding associated with the belief system. By spiritual or non-secular I mean a belief system which goes beyond that which can be perceived by the senses or ascertained by the application of science. I prefer not to use the word “supernatural” to express this element, because it is a loaded word which can carry a variety of connotations. Such a belief system may or may not involve belief in a supreme being, but it does involve a belief that there is more to be understood about mankind’s nature and relationship to the universe than can be gained from the senses or from science. I emphasise that this is intended to be a description and not a definitive formula…. “

Para 60:

“On the approach which I have taken to the meaning of religion, the evidence is amply sufficient to show that Scientology is within it; but there remains the question whether the chapel at 146 Victoria Street is “a place of meeting for religious worship”.

Para 64:

”There is a further significant point. If, as I have held, Scientology comes within the meaning of a religion, but its chapel cannot be registered under PWRA because its services do not involve the kind of veneration which the Court of Appeal in Segerdal considered essential, the result would be to prevent Scientologists from being married anywhere in a form which involved use of their marriage service. They could have a service in their chapel, but it would not be a legal marriage, and they could have a civil marriage on other “approved premises” under section 26(1)(bb) of the Marriage Act, but they could not incorporate any form of religious service because of the prohibition in section 46B(4). They would therefore be under a double disability, not shared by atheists, agnostics or most religious groups. This would be illogical, discriminatory and unjust. When Parliament prohibited the use of any “religious service” on approved premises in section 46B(4), it can only have been on the assumption that any religious service of marriage could lawfully be held at a meeting place for religious services by registration under PWRA….”

Para 65:

“I would overrule the decision in Segerdal; allow the appeal; declare that the chapel at 146 Queen Victoria Street is a place of meeting for religious worship within section 2 of PWRA; and order the Registrar General to register the chapel under section 3 of PWRA and as a place for the solemnisation of marriages under section 41(1) of the Marriage Act. It is unnecessary in these circumstances to consider the arguments advanced by the appellants under the Equality Act and the European Convention.”

This decision recognises that religious worship or belief does no longer have to venerate a supreme deity. However a ceremony of instruction or discussion of a philosophy is not religious worship.

The concept of ‘Place of Public Religious Worship’ was further considered in an appeal to the European Court of Human Rights [ECHR], see Church of Jesus Christ of Latter-Day Saints v The United Kingdom [2014] ECHR 7552/09; [2014] All ER (D) 252 (Mar).

The ECHR held in relation to Article 14 that the claim of discrimination was unfounded on its merits since the law was applied equally to all religious organisations (including the Church of England in relation to its private chapels). The Court also found that any difference in treatment was reasonably and objectively justified since the purpose of the exemption was to benefit churches who worshipped with open doors which in turn could dispel myths and prejudices in a multi cultural society.

The separate joint opinion of Judges Ziemele [President] and Hirvelä annexed to the ECHR judgment stated:

“The tax exemption was a privilege. It was not a right. The application of this privilege did not interfere with the exercise of the right to freedom of religion and we therefore conclude that the facts of the case do not fall within the ambit of Article 9 …”

5. “Belong to the Church of England or the Church in Wales or is for the Time being Certified as Required by Law” - (Test 3)

Premises used for public religious worship cannot be treated as exempt unless they ‘belong to’ the Church of England [CoE] or Church in Wales or are certified as places of religious worship in compliance with the Places of Worship Registration Act 1855 [PWRA 1855]. In the case of the Church of England ‘belongs to’ does not denote legal ownership but derives from the historical context and the position under s.10 PWRA 1855, which states:

“10 Nothing to affect churches, etc. of Established Church.

Nothing in this Act shall affect or be construed to affect the churches or chapels of the Church of England, or the celebration of divine service according to the rites and ceremonies of the said Church of England, by ministers of such church, in any place hitherto used for such purpose, or being now or hereafter duly consecrated or licensed by any archbishop or bishop or other person lawfully authorized to consecrate or licence the same.”

To denote ‘belong to’ as physical ownership (because the church occupies and owns by various means) would create anomalies. Subsequent to the 1855 Act it is material to determine whether the church/chapel of the established church has existed prior to 1855 or if the Church has been consecrated or licensed by the CoE since that date. Clearly, a church which has been de-consecrated or desecrated will not belong to the CoE. This view has been taken following legal advice and discussion with the CoE.

Accordingly, from the above analysis there is some doubt regarding the correctness of the decision in Thomas (VO) v Mission to Seamen (Cardiff Branch) [1988] RA 197.

5.2 Certification

The process of certification and the Registrar’s role are fully set out in the Supreme Court decision in R (on the application of Hodkin and another) v Registrar General of Births, Deaths and Marriages [2013] UKSC 77, [2013] All ER (D) 100.

It is a self registration process and care should be exercised that the registration correctly covers the premises used for religious worship. There have been occasions where the registration does not cover the whole of the premises so used or covers areas used for other purposes. Accordingly, there are instances, where the whole of the hereditament is certified as a place of worship under the Places of Worship Registration Act 1855, when the extent of the registration would clearly be open to question. An example may be the inclusion of an area entirely used for secular purposes such as a cafeteria. It should be noted that exemption can only apply from the date of registration and not before.

5.3 Registration

The register is maintained by:

The General Register Office Churches and Chapels Section Smedley Hydro Trafalgar Road Birkdale Southport PR8 2HH

Persons wishing to register their place of religious worship should obtain the necessary forms from their Local Register Office (births, marriages & deaths) and should then send the completed forms to The General Register Office.

The mere act of certification as a place of religious worship as mentioned below does not of itself entitle any part of the hereditament to exemption; to be exempt, there must be use as a place of public religious worship.

5.4 Public Religious Worship

In Church of Jesus Christ of Latter Day Saints v Henning (VO) 1963/RVR/422 - where a Mormon Temple had been certified as a place of religious worship, the House of Lords held (following a review of other cases), that because the public at large and members of the Mormon Church not recommended by their Bishop could not enter the Temple, where certain sacred ceremonies were performed, it was not a place of public religious worship and did not qualify for exemption. A Mormon meeting hall which does not contain a Temple and satisfies the “invitation test” may however, be exempt.

5.5 “The Invitation Test”

The concept of the ‘invitation test’ comes from the decision in Broxtowe Borough Council v Birch & Others (Trustees of the Arnesby Trust) and Moffatt (VO) CA [1983] RA/1.

This test, together with the importance of ‘religious worship’ being public, was further considered by the House of Lords in Gallagher (VO) v Church of Jesus Christ of Latter Day Saints HL [2008] RA 317 [the Preston Mormon Temple case]. They were asked to determine whether the Temple, considered by the Church to be the house of the Lord and one of the holiest places on earth, should be exempt from rating. Ceremonies at the Temple carried profound theological significance to Mormons, but only the worthy who had a ‘recommend’ could be admitted.

Counsel for the ratepayer submitted that ‘public worship’ meant ‘congregational worship’. This contention was rejected and in the leading judgement Lord Hoffman re-affirmed the decision of the House in Church of Jesus Christ of Latter-Day Saints v Henning (VO) [1962] 1 WLR 1091, which confirmed the unanimous decision of the Court of Appeal (Lord Denning MR, Donovan and Pearson LJJ), who had held that the words could not apply to places used for religious worship from which the public was excluded. In Gallagher, Lords Hope, Scott, Carswell, Mance dismissed the Appeal and Lord Hope of Craig said, at para 29:

“Slade LJ said in Broxtowe Borough Council, at p 334, that in his judgment a meeting of persons which takes place on private premises cannot be said to be “public” within the ordinary meaning of words unless members of the public, or of the particular section of the public most concerned, are given some notice that they will not be treated as trespassers or intruders if they seek to enter the premises and attend the meeting. The forms of notice, he said, could be many and various. In some cases even the exterior appearance of the building might be enough to indicate to members of the public that they will be welcome.”

The House of Lords’ decision in Gallagher was appealed by the Church to the European Court of Human Rights.

The Court held in relation to Article 14 that the claim of discrimination was unfounded on its merits since the law was applied equally to all religious organisations (including the Church of England in relation to its private chapels). The Court also found that any difference in treatment was reasonably and objectively justified since the purpose of the exemption was to benefit churches who worshipped with open doors which in turn could dispel myths and prejudices in a multi cultural society.

The separate joint opinion of Judges Ziemele [President] and Hirvelä annexed to the judgment stated:

“The tax exemption was a privilege. It was not a right. The application of this privilege did not interfere with the exercise of the right to freedom of religion and we therefore conclude that the facts of the case do not fall within the ambit of Article 9 …”

Usually places of worship can be easily identified by a notice, religious symbol or architectural feature as belonging to a sect or denomination whose service are widely known to be open to the public. Furthermore, the growing trend (particularly in the Christian Church) is for places of worship to advise the public residing in the immediate locality of services and times of worship by leaflets and programmes distributed door to door.

However, in cases where there is no such indication and where times of services, or the means of obtaining them, are not advertised VO’s may need to consider whether the “invitation test” is indeed satisfied.

The sensitivity of this issue should be borne in mind and where a VO is in doubt, advice should be sought from the Technical Advisor.

In the case of chapels in public schools or convents, provided the ‘invitation test’ is met and members of the public are able to attend services, then the chapel will be exempt from rating, providing that it is certified as a place of religious worship. Where the public is not allowed to attend services the exemption will not apply.

6. Church and Chapel Halls or Similar Buildings - (Tests 4, 5, 6 & 7)

6.1 Tests 4, 5, 6 & 7

In order to qualify for exemption the premises must satisfy the three requirements of paragraph 11(1)(b). The premises must:

a. qualify as a church hall or similar building (Test 4),

b. be used in connection with a place of public religious worship (Test 5) and

c. be used for the purposes of the organisation (Test 6) responsible for the conduct of public religious worship therein (Test 7).

The context for these tests is set by the decision in Swansea City Council v Edwards (VO) and Trustees of Our Lady of Lourdes Roman Catholic Church 1977/RA/209, at page 218:

“In order to give meaning to these words each qualification must be taken as narrowing the field of exemption. In other words , premises may qualify as a church hall but are not exempt unless they are used in connection with a church but this does not necessarily involve the conclusion that they are therefore used for the purposes of the organisation carrying on services in the church unless, additionally, they are found to be so used”.

6.2 “a church hall, chapel hall or similar building” (Test 4)

Qualification as a church hall or similar building under Test 5 depends largely on the function of the premises and is not related to any architectural or structural characteristics. In Westminster Roman Catholic Diocese Trustee v Hampsher (VO) 1975 RA 1, the Lands Tribunal Member observed that “a community centre is a reasonably good definition of a church hall”. However, this decision would not fall to be decided in the same way under paragraph 11 of Schedule 5 LGFA 1988 - see para 48 in Gallagher due to ‘the extent that test’.

In the case of Trustees of the West London Mission of the Methodist Church v Holborn MBC 1958 51 R&IT 297, Lord Goddard thought it “obvious” that this building was akin to a church hall or a chapel hall, saying:

“In it a great number of activities of and in connection with the Methodist Church are conducted in Kingsway, and therefore, in my opinion, it comes clearly within the section.”

However, it should be noted that in the House of Lords, in Gallagher, Lord Hope criticised this decision thus:

“I would reject Mr Sumption’s analogy with the West London Methodist Mission. It is no longer a reliable guide as to how buildings that contain distinct areas that are put to a variety of uses should be treated. The legislation is now qualified by the words “to the extent that”. Their effect is to require an apportionment to be made between those parts of the building that qualify for the exemption and those which do not.”

The most recent an informative definition is in Gallagher where the President of the Lands Tribunal said, at para 51:

“Without myself attempting a complete definition, I think that in essence a church or chapel hall is a hall, often with other rooms and ancillary accommodation, which is used for functions and meetings by the congregation, and at times also by others, for the conduct of church business and sometimes for wider community purposes that reflect the nature and purposes of the ecclesiastical body that is in occupation. It is not itself a place of worship.”

In the Court of Appeal Neuberger LJ (as he then was) said, at Para 31:

“I have already mentioned the risk of seeking to define, or redefine, an expression used in a statutory provision, and the opening words of this quotation indicates that Mr Bartlett appreciated the risk as well. Having said that, it seems to me that his formulation is pretty satisfactory, save that it may be a little too restrictive so far as the words which follow “wider community purposes” are concerned. The uses for which a church or chapel hall will, in many cases, be let out from time to time are pretty wide, and (probably) provided such uses do not positively conflict with those of the church or chapel, it seems to me that they would not prevent the use being consistent with that of a church or chapel hall. At any rate, however one defines a church hall or chapel hall, it seems to me that it cannot possibly include full time use of the sort of use to which the Training Centre is put.”

It should be noted that the Ebury decision was that the hereditament was physically part of the church and church hall building and was never shut off from it internally. Its actual use in the LT President’s judgment was ancillary to the church just as much as the other parts of the church hall were and it was not outside. See also Romiley Lifecare v Tuplin (VO) 2011RVR 255, where the Ebury decision was distinguished by the President of the VTE, Professor Graham Zellick, at para 256 of his decision.

6.3 “similar building”

Associated premises occupied solely or mainly for activities which appear to be secular may be entitled to exemption under the provisions of paragraph 11(1)(b) if the requirements set out in paragraph 6.1 (above) are met.

Consideration should therefore be given to the scope of ‘the purposes of’ the church organisation, which may or may not extend beyond strictly spiritual matters. For instance, it is a stated aim of the Roman Catholic Church that it is not only concerned with religious life but also with aspects of the social life of the community.

Typically, the following activities may be encountered:

a) Social Clubs

Whilst social club premises may have the appearance of being secular in character (eg where the membership includes non-members of the church or when premises include a licensed bar) they may nevertheless qualify for exemption if the requirements of paragraph 11(1)(b) are met.

Where a club is a separate and distinct body from the church organisation and enjoys exclusive or paramount occupation of a hereditament, then the occupation will be rateable. See The Trustees of the Roman Catholic Diocese of Hexham and Newcastle v Little (VO) and Another 1984 RA 97.

Where the accommodation is used for club activities not qualifying for exemption and for qualifying ‘church’ activities then, if the use for the latter is significant, ie perhaps not very extensive but greater than de minimis, exemption should be given.

Whether or not a club exists as a distinct and separate body will depend on the facts. In this respect Valuation Officers should refer to the relevant constitution, its rules, and the degree of control exercised over its activities by the church organisation - see Liverpool Roman Catholic Archdiocesan Trustees Incorporated v Mackay (VO) 1988 RA 90. Where control is tenuous or the club is a branch of a national organisation and its activities are not directly connected with a particular church the club should be treated as an independent body and will not qualify for exemption.

b) Youth Clubs

The considerations mentioned in the preceding paragraph will apply to the rateability of premises associated with churches and used as youth clubs. It is emphasised that the youth activities must be in connection with and for the purposes of the organisation responsible for public religious worship at a particular church and in order to identify such purposes it will be necessary to examine the relevant constitution and structure of the church organisation.

For example, in view of the constitution and duties of the Methodist Youth Councils and Committees, a youth centre run by a local Methodist church may be exempt on the basis of the West London Methodist decision [see 6.2 above] despite the fact that the club provides facilities for all the youth in the district without regard to their religion. It is also necessary that the organisation responsible for the religious worship in the church shall also be responsible for the youth club. Thus for example effective control of the club, albeit by way of committee, must rest in the hands of the priest, minister, parochial church council or whatever is the equivalent for the particular religious organisation concerned.

c) Buildings occupied by Boy Scouts, Girl Guides and similar associations

A hereditament occupied by the Boy Scouts Association or similar organisations (Girl Guides, Boys Brigade etc, hereinafter referred to as ‘the Group’) will normally be rateable. However, in the following limited circumstances exemption may be appropriate:

i) The hereditament must be in the nature of a church hall or similar building;

ii) The Group must be sponsored by the organisation responsible for the conduct of public religious worship in that place, to which it is affiliated;

iii) The Group’s members must be predominantly, if not wholly drawn from the congregation of the sponsor organisation responsible for the conduct of public religious worship in that place;

iv) The activities of the Group must form part of “the purposes of the organisation responsible for the conduct of public religious worship”. Furthermore, the availability of the hereditament for use by persons other than the Group for activities relating to the parish and congregation would be relevant in this respect.

If all these conditions are met exemption may be conceded - see Hall (VO) v Boy Scouts Association 1968 RA 120.

d) Christian Science Reading Rooms

In the Ninth Church of Christ Scientist v Westminster City Council and Cane (VO) 1958 LT 51 R&IT 175, it was held that a Christian Science reading room which comprised a single hereditament was exempt as being a “similar building” to a church hall. By its constitution each Christian Science church is required to have reading room facilities. The Lands Tribunal found that these facilities comprised an activity of a religious character required by church members and also offered a place largely used for missionary activities in connection with the church.

Whilst the exemption may apply to premises used as reading rooms it is doubted whether premises used as retail shops would fall within the provision.

e) Church and Chapel Halls used as Children’s Day Nurseries

Church and chapel Halls used as children’s day nurseries and let on hiring agreements/licences will not normally form a separate rateable occupation of a church or chapel hall providing the church organisation’s interference and control over the hall is such that the church organisation at “the end of the day” remain in paramount occupation - see s.67(5) LGFA 1988 and 6.6 below.

In the case of church/chapel Halls used by children’s day nurseries exemption is very much dependent upon the evidence of church’s interference with and control over that occupation. It should be noted that day nurseries will normally operate for only a limited number of hours on certain days of the week and in between, especially in the evening and at weekends, the hall will revert back to a use qualifying for exemption. In the majority of cases, therefore at the end of the day, it will be reasonable to assume, providing the church organisation has retained paramount occupation by virtue of its control and use (typical examples being reservation of the hall by the church for other uses; reserved rights of access; shared use, etc) that insofar as the activities in the hall are not uses for the purpose of the organisation responsible for the conduct of public religious worship in that place, that the church should still be regarded as the rateable occupier.

It is considered that the correct approach to rateability is as follows:

  • If the children’s nursery takes place within a church hall but does not undermine the character of the building as a church hall because the building is still used for other purposes, then the building retains exemption as a church hall. Use as a nursery per se is not inconsistent with a building being a church hall as the very essence of a church hall (see Gallagher in the Court of Appeal) is that it is a building which is used for a variety of purposes and a children’s nursery can be one such purpose.

  • However, if the reality is that a discrete area of the building has been physically set aside for use as a nursery and that part of the building is designated for use as a nursery rather than being available for a range of uses associated with a church hall then exemption will only be available “to the extent that” the building physically remains a church hall (ie the part which is available for a variety of uses) whereas the part which has been designated as a nursery would be rateable.

It is recommended that the facts are established at the earliest opportunity by obtaining copies of any licence or letting agreement and ascertaining the church’s control and retained powers in relation to the area used by the day nursery.

The technical Advisers should be consulted in any case where the VO is uncertain as to whether the church organisation has retained paramount occupation.

6.4 “used in connection with” (Test 5)

The use of the words ‘that place’ in paragraph 11(1)(b) connotes a specific link between the hall or building and a particular place of worship - see Church House Trustees v Dimmick (VO) 1959 52 R&IT 606.

Hence, the ‘used in connection with a place of public religious worship’ test will not be satisfied if the premises are used in connection with all the churches in a diocese, whereas exemption should not usually be denied merely because two churches share a church hall.

6.5 “for the purposes of the organisation” (Test 6)

The church organisation will normally contend that the whole of the premises is used in connection with the place of public religious worship. However attractive this argument may be on the surface (because the church may have a close and intimate relationship and exercise influence on the way the premises are run), it is necessary to consider whether every use of the premises is “use in connection with a place of public religious worship”.

Activities such as adult fitness programmes, eg Weightwatchers slimming clubs, 5-a-side football and volley ball leagues, etc or daytime courses/ activities for the retired, including old time dancing and art classes, are examples which may not properly constitute “use in connection with a place of public religious worship”. These activities would also fail Test (7).

The President of the Lands Tribunal in Church House Trustees v Dimmick (VO) 1952 R&IT 606 distinguished the West London Mission decision (see 6.2 above) on the grounds that the Methodist Church placed a particular emphasis on service to the community at large, whereas the Church of England did not. He said at page 607:

“Now it is true that the Church of England sponsors social activities amongst its members, indeed the normal church hall is largely devoted to such activities, but those activities must bear some relationship to the activities which the man in the street associates with a church hall. As far as I am aware, there is no provision in the Church of England’s constitution similarly to that in the Methodist Church, i.e. a spiritual obligation on the part of the church to provide the comprehensive social activities outlined in the West London Mission case. It seems to me that the Old Palace deals mainly with the administration generally of the diocese and I cannot regard it as a church hall, chapel hall or similar meaning within the meaning of Section 7(2)(b).”

However, exemption will not generally be lost merely because there are some inappropriate activities. In the Swansea case (see 6.1 above), where the premises were used mainly by a social club, it was held that nothing contained in the legislation suggests that the use of the premises is required to be wholly, mainly or even substantially for the purposes of the organisation.

6.6 “conduct of public religious worship in that place” (Test 7)

It is essential that the activities carried on in the hall premises should marry with and serve the purposes of the church organisation. See Trustees of the West London Mission of the Methodist Church v Holborn MBC 1958 51 R&IT 297 referred to at paragraph 6.2 above.

It is considered that activities that have absolutely no ‘religious’ element and which do not have any greater link to the church than they take place on premises administered by the church, can be said to have been organised “for the purposes of” the church. Such a view is supported by the Swansea case referred to above and Trustees of the Roman Catholic Diocese of Hexham & Newcastle v Little (VO) 1984/RA/97.

It should be noted that there is no requirement in paragraph 11(1)(b) [NB this is specific only to this sub-para] for the “organisation responsible for the conduct of public religious worship in that place” to be the rateable occupier of the church hall, chapel hall or similar building. Undoubtedly it would help the case for exemption, but there is no reason why a wholly owned subsidiary organisation cannot be said to use the premises which it occupies for the purposes of its parent organisation. Indeed it may frequently be the case that the wholly owned subsidiary has been created solely for the purpose of carrying out one or more of the purposes of the parent organisation.

There must obviously be some manifest and close connection between the ‘worshipping organisation’ and the ‘occupying organisation’ before the latter can be said to use the premises for the purposes of the former and it is essential in each case to establish all of the facts relating to the connection between the two bodies.

However, great caution should be exercised to ensure that the tests in the Swansea decision are fully met. In any case of doubt, advice should be sought from the Technical Adviser.

6.7 The “End of Day” Provisions [s. 67(5) LGFA 1988]

The “end of day” provisions in s.67 LGFA 1988 provide that:

“A right or other property is a hereditament on a particular day if (and only if) it is a hereditament immediately before the day ends”.

Moreover, the determination of ‘exempt property’ has to be made in accordance with the provisions in s.67(5) LGFA 1988.

Qualification for exemption falls to be determined on a day to day basis in accordance with the provisions in s.42(1)(c) and (3) LGFA 1988.

In circumstances, where a non qualifying use within a church/chapel hall exists for only part of a day, providing that the state of affairs at the end of the day is such, that the church/chapel (or wholly owned subsidiary organisation, see para 6.4 above) can be regarded as being in paramount occupation, by virtue of the Church’s interference and control as the residual rateable occupier, exemption will continue to apply.

Para 2(1B) Sch 6 LGFA 1988 provides that if there is partly exempt use of such a hereditament at ‘the end of the day’, the non exempt use of the hereditament is valued.

7. “Administrative or Other Activities” and “Office Premises” (Tests 8 -10)

7.1 The Law

Paragraph 11(2) to Schedule 5 of 1988 LGFA as originally enacted was modified by the 1992 LGFA and paragraph 11(3) inserted, with effect from 1/4/92.

Under paragraph 11(2) a hereditament is exempt to the extent that it is occupied by an organisation responsible for the conduct of public religious worship in a place falling within paragraph 11(1)(a) This is the occupation requirement -Test 8.

It should be noted that there is no requirement that the administration or other activities and office use should be connected with one particular place of public religious worship, the words “in such a place” can be distinguished with “in that place” in para 11(1)(b) relating to church and chapel halls. See also para. 6.6 above.

In Gallagher, the President of the Lands Tribunal clarified these provisions at para 50:

“There are two final matters to which I should refer on the construction of the provisions. Firstly, the extent of the exemption under paragraph 11(2)(a). This provides that a hereditament is exempt to the extent that it is occupied “by an organisation responsible for the conduct of public religious worship” in a place of public religious worship and “is used for carrying out administrative or other activities relating to the organisation of the conduct of public religious worship in such a place”. It will be observed that the word “organisation” is used in two quite different senses – first to mean the body constituted for the particular purposes set out and secondly to mean the process of making arrangements for or carrying into effect those particular purposes – although this does not, I think, give rise to any difficulty. What is important, in my view, is that the activities must be ones relating to the “organisation” of the conduct of public religious worship and not just to the conduct of public religious worship. The fact that it is administrative activities that are singled out for mention emphasises the nature of the exemption that is given. The activities may be administrative or they may be other activities: but they must be activities relating to the organisation of the conduct of worship. Mr Newberry, as I understood him, contended that the words “relating to” suggest that some weak connection would suffice to satisfy the provision, but I do not think that this is right. In my judgment the relationship must be substantial. It may be that the purpose of what is now subparagraph (2)(b) was to extend exemption to parts of premises used for some of the purposes that were under consideration in Church House Trustees v Dimmick (VO), and that the sub-paragraph (2)(b) exemption was added by the 1992 Act because it was found that this objective had not been sufficiently achieved by the wording used. There is, however, no need to speculate about this since the wording of the provision shows that it is relatively limited in its scope. It should not be regarded as an invitation to treat as exempt any building that is occupied by a church organisation and has some connection to worship in the church.”

7.2 Application of the Principles

Examples of the type of exemption conferred by para 11(2)(a) would be a seminary where priests are trained to conduct religious services, although it should be noted that this does not extend to general courses at theological colleges or car parks which allow worshippers to park their vehicles to attend services.

More difficulty arises where a corporate body related to such an organisation responsible for the conduct of public religious worship occupies offices. It will be a question of fact and degree in each case whether the body can be seen as forming an integral part of the main body’s activities relating to the organisation of the conduct of worship in churches etc, or is too remote. For example offices occupied by the Church Commissioners and the Church Urban Fund have been accepted as exempt. However, see Glenwright (VO) and Durham City Council -v- St Nicholas Parochial Church Council 1988/RA/1.

It is then necessary to consider:-

i) Whether the hereditament is used for carrying out administrative or activities relating to the conduct of public religious worship in such a place falling within sub-para 11(1)(a) - (Test 9)

or

ii) It is used as an office or for office purposes, or for purposes ancillary to it’s use as an office or for office purposes - (Test 10).

These uses (the user condition) are to be considered in the alternative.

Sub paragraph (a) of 11(2) specifically exempts hereditaments used for carrying out administrative or other activities relating to the organisation of the conduct of public religious worship in such a place - see Gallagher. Where offices, such as diocesan offices, are used by a denominational organisation which is responsible for the conduct of worship, establishing whether exemption applies will be straight forward.

Premises or parts of premises used as offices or for office purposes or for purposes ancillary to such an office use will also be exempt providing they are occupied by an organisation responsible for the conduct of public religious worship in a place mentioned in paragraph 11(1)(a) notwithstanding its use does not relate to the organisation or the conduct of such worship.

‘Office purposes’ is amplified, albeit not exhaustively, by the list of examples in paragraph 11(3).

The exemption covers, firstly, administrative or other activities which relate to the organisation of public religious worship in such a place mentioned in paragraph 11(1)(a). If administration or other activities do not relate to the organisation of worship in such a place then the part so used will not be exempt unless it is used for office or office purposes or purposes ancillary to such an office use - para 11(2)(b).

Examples of uses which do not fall within the exemption are buildings used for social purposes, other than church halls, or for commercial purposes such as publishing and bookselling or for education (unless for pre or post ordination training where students are trained as ministers with the intention that they would go on to conduct public religious worship).

7.3 Specific Examples

a) Bookshops and Gift shops

Bookshops and Gift shops are not exempt as a place of public religious worship under Sch 11(1)(a) nor are they in the nature of a church hall, chapel hall or similar building under para 11(1)(b). Similarly, they have no connection with the administration or other activities relating to the organisation of public religious worship in such a place as falling within para 11(1)(a) nor are they used for as an office or for office purposes etc. Therefore, Bookshops and Giftshops are rateable and should be separately assessed.

b) Function Rooms

These may be used both by the church organisation and let out to members of the public for non-religious functions. Providing these rooms are not located within the place of public religious worship falling under para 11(1)(a), then for the reasons set out in para. 7.3a above relating to bookshops etc exemption will not apply.

c) Cathedral Workshops and Stone Mason’s Yards

It is often contended that Workshops and Stone Mason’s Yards used for the repair of the structure should be considered as ancillary to the use of a Cathedral as a place of public religious worship and therefore exempt under par 11(1)(a). Alternatively, that the use of the premises is an activity relating to the organisation of the conduct of public religious worship - para 11(2)(a).

The use of a workshop/yard for structural repairs is not exempt under these provisions as the use has more to do with the preservation of the architectural integrity of the Cathedral as a monument and not with the use of it as a place of public religious worship. Neither is it considered to be an activity relating to the organisation of the conduct of public religious worship for similar reasons - the activity is the preservation of the architecture of a historic building.

d) Offices occupied by Cathedral Preservation Trusts

For similar reasons to those set out in para 7.3c above offices occupied by a Preservation Trust should not be regarded as exempt. Moreover, the Preservation Trust may be a separate legal entity and in these circumstances it will be necessary to examine the relationship of the Preservation trust with that of the organisation responsible for the conduct of public religious worship in that place See para 7.2 above.

e) Car Boot Sales

In the case of church premises where the church retains control of the car boot sale exemption under para 11 Sch 5 LGFA 1988 will continue to apply - see Liverpool RC Archdiocesan Trustees Incorporated v Mackay (VO) 1980/RA/90.

f) Churchyards

Churchyards forming part of the same hereditament as a church will qualify for the same exemption as the qualifying church. However burial grounds located some distance away from the incumbent responsible for a place of religious worship will not qualify for exemption and will be rateable. Although prayers may be said at graveside services they cannot be considered places of public religious worship.

g) Training Centres

Religious training centres do not qualify for exemption on religious grounds. Whilst religious activity may be practised at the centre, the exemption only applies to places of public religious worship, or premises associated with administrative or other activities relating to the conduct of religious worship at that place.

As such training centres are not directly in control of places of public religious worship, they fail first limb of the test in paragraph 11(2).

The first limb of paragraph 11(2) requires that a hereditament will be exempt only to the extent that it is occupied by an organisation responsible for the conduct of public religious worship in a place falling within sub-paragraph (1)(a). Sub-paragraph 11(1)(a) provides that a hereditament is exempt to the extent that it consists of any of the following:

“(a) a place of public religious worship which belongs to the Church of England or the Church in Wales (within the meaning of the Welsh Church Act 1914) or is for the time being certified as required by law as a place of religious worship;”

In the Court of Appeal decision in the Gallagher case, Neuberger LJ stated:

“I simply cannot accept that the training of missionaries can possibly fall within the expression “activities relating to the organisation of the conduct of public religious worship”. As Mr Bartlett said, although “as part of their training the missionaries are instructed in the conduct of chapel services, this is not the primary purpose of their training; and in any event that part of the training is an activity that appears to relate not to the organisation of the conduct of services but of the conduct itself”.

In the House of Lords decision, Lord Hope of Craighead stated the following:

“The problem for the appellant does not lie in satisfying the opening words of para 11(2). It plainly is an organisation responsible for the conduct of public religious worship in the Stake Centre. But it needs to satisfy subparagraph 2(a) if it is to obtain the exemption. The mere fact that there are links between what happens in these buildings and what happens in the Stake Centre, as Mr Sumption suggested, will not suffice. To be within this subparagraph, the use must be for administrative or other activities relating to “the organisation of the conduct” of public religious worship there. This cannot be said to be so in the case of the Missionary Training Centre. As the President put it, the missionaries are instructed as part of their training in the conduct of chapel services. But this is not the primary purpose of their training. In any event this is an activity which relates to how services in general are conducted, not to the organisation of the conduct of services in the Stake Centre or any other building that the appellant uses for public religious worship.”

Consequently all religious training centres regardless of denomination will liable to a non-domestic rating list entry.