Rating Manual section 6 part 3: valuation of all property classes

Section 150: canal properties

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1. Co-ordination

Canal premises are subject to co-ordination procedures in accordance with the relevant Practice Note.

2. Historical background

2.1 General

Britain’s canal network was principally developed during the eighteenth and nineteenth centuries as a series of separate undertakings authorised by private Acts of Parliament. The earliest were often developed as adjuncts to other enterprises, particularly mines and quarries, but as the Industrial Revolution gathered pace, entrepreneurs began to construct canals as speculative transport ventures. Most of these are now gathered together under the British Waterways “umbrella”, but a few undertakings remain in private hands. Most notable of these is the Manchester Ship Canal.

2.2 Rating history of canal undertakings

In the pre-nationalisation era, special Acts in many cases conferred on canals a total or partial exemption from rating. Where no such exemption applied the practice was to arrive at a cumulo value on the profits basis and to apportion that cumulo value so as to arrive at the RV in each parish. This approach was sanctioned in the leading case R v Kingswinford (1827). No attempt appears to have been made to arrive at a cumulo valuation by the contractor’s basis; this was possibly because of the difficulty in apportioning costs of navigations between parishes.

3. Occupiers

3.1 British Waterways Board

British Waterways Board is responsible for most of Britain’s canals and navigable rivers. Since 1990 it has been designated under successive Central Rating List Regulations. Rating valuation of the BWB canal network is carried out by the Utilities Rating Team, and GVOs are responsible only for the identification and assessment of those “excepted hereditaments” which are excluded from the central list hereditament. For detailed advice on the identification of such excepted hereditaments, reference should be made to Rating Manual section 2 part 2 - Section 12.

3.2 Other Canal Undertakings

The remainder of this section deals with the few canals that are not occupied by BWB. These remain in the occupation of the private undertakings which constructed them, or their successors.

4. Description

4.1 Manchester Ship Canal

This is in law a Statutory Harbour. The extent of the hereditament continues to be determined in accordance with Regulation 5 of the Non-Domestic Rating (Miscellaneous Provisions) (No.2) Regulations 1989 [SI 1989 No.2303] (see Rating manual: section 6 part 3 - section 350). The valuation of such dock hereditaments, which prior to 1 April 2005 were assessed by statutory formula, is undertaken by the Utilities Rating Team.

4.2 Other canals

Canals operated other than by British Waterways Board should be regarded as single hereditaments and entered in the local list for the Billing Authority Area in which the largest element of value arises. The hereditament should be identified as consisting of all waterways, locks, weirs and towpaths, basins, moorings (other than those separately assessed), and also visitor centres, museums, car parks refreshment rooms (where not let out), offices, stores and workshops where these facilities are used in conjunction with the waterway and are either adjacent to it or closely linked by functional connection, provided that they are all rateably occupied by the body operating the canal. Canals and other waterways occupied by a Drainage Authority may be exempt under LGFA 1988 Sch 5 para 14.

5. Survey requirements

No measurement of waterways or buildings will be required, but it may be necessary to establish the lengths of waterway in each Billing Authority area, and which buildings lie within each Billing Authority area. The occupier should be requested to provide asset registers (if these exist). The use of each building should be recorded and note should be taken of any domestic use, including the presence of any domestic moorings which are not let out (see paragraph 7 below).

6. Basis of valuation

The receipts and expenditure approach will be applied in the same way as it is used in the assessment of Light Railways (see Section 570). It is recognised that in many cases this may lead to a Nil assessment. No account should be taken of income and expenditure arising from separately assessed “Let-Out” property, unless this leads to a Nil assessment, in which case the advice of CEO Rating Section should be sought. Income earned from the sale of water is not to be ignored.

7. Composite Waterways

7.1 Location of Domestic Property

A Canal hereditament may be composite as a result of the presence of:

(i) Staff accommodation (where staff are required to reside on the hereditament as part of their terms of employment).

(ii) Domestic moorings within the hereditament (ie. where moorings are used as living accommodation but boat owners do not have exclusive occupation of individual moorings).

7.2 Treatment of Domestic Mooring Income and Expenditure

In applying the receipts and expenditure method to the valuation of a composite canal, no account should be had to income in the form of domestic mooring fees. Similarly expenditure attributable to the provision and administration of domestic moorings should be excluded.

8. Exemptions

The following exemptions may apply in part or in whole

(i) A waterway may be exempt to the extent that it consists of land which is occupied by a Drainage Authority and which forms part of a river or waterway maintained by that Authority, or that it consists of a structure or appliance maintained by the Authority for controlling or regulating the flow of water (LGFA 1988 Sch 5 para 14).

(ii) A waterway, its towpath, adjacent land, locks, and weirs may be exempt as a park (LGFA 1988 Sch 5 para 15) provided that it is in the occupation of a single relevant Authority or a combination of relevant Authorities and is available for free and unrestricted use by members of the public.

(iii) It is possible that certain features of a waterway hereditament might qualify for exemption as property used for the disabled under LGFA 1988 Sch 5 para 16. Details of any such features should be notified to CEO (Rating) and advice sought.

(iv) Fishing Rights where not severed from occupation of the waterway are to be ignored for the purposes of valuation as from 1/4/97 (LGFA Section 2 made effective by Order 2 of S1 1997/1097). Prior to this date income (and associated expenditure) from Fishing Rights not severed from occupation of the waterway is to be taken into account; as from 1/4/97 it must be ignored.