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

Section 260: clubs and institutes

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section deals with premises occupied by clubs and institutes excluding casinos and gaming clubs (see Rating Manual section 6 part 3: section 210); church clubs and community centres (see Rating Manual section 6 part 3: section 475); discotheques and night clubs (see Rating Manual section 6 part 3: section 720) and sports grounds and clubs (see Rating Manual section 6 part 3: section 970). Snooker Halls & Clubs (see Rating Manual section 6 part 3: section 945).

1.1 Definitions

In general, clubs and institutes will fall within one or other of the following categories:

a.Members’ Clubs, or (private members clubs) where the management is vested in the body of members, or trustees acting on behalf of the members, or an elected committee and include political, sports and social clubs (excluding sports clubhouses). Such clubs may be unincorporated or incorporated under the Companies Acts; workingmen’s or similar clubs registered under the Friendly Societies Acts or the Industrial and Provident Societies Acts. These subdivisions are in themselves unimportant. What is important is that a members’ club is carried on for the benefit of the members, and is not conducted for profit, nor does it carry on a trade or business or other undertaking of a similar character.

b.Proprietary Clubs are commercial enterprises owned by individuals, partners, or companies (whether incorporated or not) but may be managed by a committee as to part or all of its activities. Where, however, the proprietor exercises paramount control he/she will be in rateable occupation. These include Exclusive Gentlemen’s Clubs, Livery Halls and the like.

Either category of club may supply intoxicating liquor to members by virtue of grant under The Licensing Act 2003 of either a Club Premises Certificate, or a Premises Licence.

2. List description and scat code

Clubs and Institutes covered by this Practice Note fall within Scat code 061. Care should be taken to use the correct scat code and not to confuse with clubhouses (scat 060), Nightclubs (scat 199), Community Centres (scat 067) Village Halls (scat 253) and snooker halls & snooker clubs (scat 253). Any assessments found to be in the wrong scat code should be amended by way of an MRL case. Examples of wrongly scat coded clubs found are reading clubs, flying clubs, gliding clubs, dance studios, youth clubs and martial arts clubs etc. This is a Generalist class therefore the appropriate suffix letter will be G.

3. Responsible teams

Clubs and Institutes are a Generalist Class.

It is recommended that each Unit appoint a named co-ordinator/lead valuer, to act as a point of contact within the Unit. This individual will be responsible for assisting in the delivery of the Unit’s valuation scheme and also liaising on value and technical issues with other lead valuers across adjoining Units.

4. Co-ordination

The Clubs and Institutes Class Co-ordination Team has overall responsibility for the co-ordination of this class. The team are responsible for the approach to and accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Co-ordination responsibilities are set out in (Rating Manual: section 6 part 1).

Caseworkers have a responsibility to:

  • follow the advice given at all times

  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team

5.1 The Licensing Act 2003

The Licensing Act 1964 was superseded by the Licensing Act 2003. There were several amendments to the 1964 in between. The Licensing Amendment Act 1976 relaxed the provisions of the 1964 Act dealing with special hours certificates. In 1987 Sunday opening hours were revised. In 1988 Pubs were granted the option to remain open during the afternoon in England & Wales. In 1995, Sunday afternoon drinking was allowed.

In 2003 a new Licensing Act established a single integrated scheme for licensing premises used for the sale and supply of alcohol, to provide regulated entertainment, or late night refreshment. Under the Act permission can be secured to carry on some, or all, of these licensable activities within one single licence. Responsibility for issuing licences now rests with local authorities. The powers of the Act came fully into force at midnight, 23 November 2005.

There are now two types of licensing arrangement:- a Club Premises Certificate or a Premises Licence.

5.1.1 Club Premises Certificate

Licensing Act 2003 - Chapter 17 part 4 Section 60

1.In this Act “club premises certificate” means a certificate granted under this Part— a.in respect of premises occupied by, and habitually used for the purposes of, a club, b.by the relevant licensing authority, and c.Certifying the matters specified in subsection (2).

2.Those matters are— a.that the premises may be used by the club for one or more qualifying club activities specified in the certificate, and b.That the club is a qualifying club in relation to each of those activities (see section 61).

Qualifying clubs - Section 61

1.This section applies for, determining for the purposes of this Part whether a club is a qualifying club in relation to a qualifying club activity.

2.A club is a qualifying club in relation to the supply of alcohol to members or guests if it satisfies both— a.the general conditions in section 62, and b.the additional conditions in section 64.

3.A club is a qualifying club in relation to the provision of regulated entertainment if it satisfies the general conditions in section 62.

The general conditions Section 62

1.The general conditions which a club must satisfy if it is to be a qualifying club in relation to a qualifying club activity are the following.

2.Condition 1 is that under the rules of the club persons may not— a.be admitted to membership, or b.be admitted, as candidates for membership, to any of the privileges of membership, without an interval of at least two days between their nomination or application for membership and their admission.

3.Condition 2 is that under the rules of the club persons becoming members without prior nomination or application may not be admitted to the privileges of membership without an interval of at least two days between their becoming members and their admission.

4.Condition 3 is that the club is established and conducted in good faith as a club (see section 63).

5.Condition 4 is that the club has at least 25 members.

6.Condition 5 is that alcohol is not supplied, or intended to be supplied, to members on the premises otherwise than by or on behalf of the club.

Clubs holding a Club Certificate are restricted to serving alcohol to members only, but they can now hold events which relax the membership rule for up to 12 times in a single year. This permission comes under a Temporary Events Notice (TENS) and these must be applied for in advance. The rules governing these notices are:-

The event must:

  • have less than 500 people at any one time – including staff running the event

  • last no more than 168 hours, or 7 days

The applicant must be at least 18 to apply for a Temporary Event Notice.

There must be a TEN for each event held on the same premises.

A single premises can have up to 12 notices applied for in 1 year, as long as:

  • the total length of the events is not more than 21 days

  • 1 person doesn’t make more than 5 applications for the premises

‘Late TENS’ can be applied for up to 5 working days before the event. A premises can apply for up to 10 late TENs per calendar year under a Club Certificate. If there are separate but consecutive events, there must be at least a 24 hour gap between them.

If the club does not qualify for a Club Premises Certificate then a Premises Licence will be required.

5.1.2 Premises Licence

A Premises Licence is required to sell alcohol or provide ‘licensable activities’ from any particular venue that does not constitute a qualifying club.

Licensable activities include:

  • selling alcohol

  • serving hot food and drinks between 11pm and 5am

  • theatrical performance

  • showing a film

  • indoor sporting event

  • boxing or wrestling (indoor or outdoor)

  • live music

  • recorded music

  • dance

  • facilities for making music

  • dancing facilities

Restrictions

The applicant must be 18 or over to apply for a premises licence.

Conditions

A designated premises supervisor (DPS) must be in place when a licence is applied for. A DPS must have a personal licence to sell alcohol.

There may be other conditions added to the licence, eg having an age-checking policy where alcohol is to be sold.

5.1.3 Licence Registers

Each Local Authority (LA) has to provide a register of licences. Most LAs have these published on their websites with address search facilities. Some LAs don’t yet have the software capabilities to display the register in this way however, there is still a legal requirement to provide the information on request. Plans are sometimes attached to the on-line version of a licence.

5.2 Case Law

Licensed Members’ Clubs

In United Services and Services Rendered Club (Tooting and Balham) Ltd and the Putney Club v Thorneley (VO) (RA/86/1998) the member, Mr N J Rose FRICS, held in his interim decision that “the evidence of [four] rents adduced in these two appeals is sufficiently reliable to enable me to base my valuations of the appeal properties upon them. I do not consider that the method put forward by the appellants, which uses turnover as a starting point for the valuations, is of any assistance in preparing those valuations”, and in his full decision stated it was his opinion that “the available evidence, although limited, is sufficiently reliable to enable me to arrive at an accurate valuation of the appeal properties”; in his full decision in discounting the Receipts and Expenditure method of valuation he held that “those responsible for managing members’ club are likely to be motivated by a desire to provide those facilities which satisfy their members’ particular requirements, subject to the overall need to remain solvent.” He also stated that the appellants’ agent had “failed to take account of the more general benefits which the appeal properties provide to their members” by “concentrating primarily on turnover”.

Due to the many motives of occupation of members’ clubs, and of those which affect the receipts, other than that of maximising profit, it is not an acceptable approach to use account information for a receipts and expenditure valuation, nor turnover as a shortened method of valuation.

5.3 Town & Country Planning Use Class Order

Members clubs usually have a planning use type of D2 (Assembly & Leisure). Public Houses come under A4 (Drinking establishments) in England and A3 in Wales. However, many clubs will not have a use class assigned to them at all if they predate the Use Class order.

5.4 Clubs in Converted Premises

Following the Court of Appeal decision in R F Williams (VO) v Scottish & Newcastle Retail Ltd and Allied Domecq Retailing Ltd (RA/41/2001) rebus sic stantibus has been defined more narrowly. In valuing a club, which occupies converted premises, any higher alternative use value should not be taken into account, unless the alterations needed for this use are of a minor nature, and it can be proved that occupiers of clubs are prepared to pay a rent at the same level as the competing uses in this type of location.

However, where it can be shown that converted premises would command a higher rent as club premises owing to their particular suitability, the value is not limited to the alternative use.

In Barry West End Labour Club Ltd v Barry Area Assessment Committee (1932 KBD 16 R & IT 166), it was held that the assessment of a club occupying adapted house premises should not be based upon the value of the property as a house to which is added a percentage of the cost of adaptation. MacNaghten, J held “…. where a rateable hereditament is converted from one purpose to another…the cost of effecting the alterations affords no guidance at all as to what the value of the hereditament will be when altered”.

5.5 Catholic Clubs and Exemption

Roman Catholic Clubs are widespread throughout the Archdioceses of Liverpool, Shrewsbury, Salford and Lancaster and possibly elsewhere. The clubs are run with the object of fostering the spiritual and social life and wellbeing of the parish by providing the members with the opportunities and facilities for sociality, recreation and refreshment in suitable surroundings and to raise money for parochial purposes.

Following the Lands Tribunal case of Liverpool Roman Catholic Archdiocesan Trustees Incorporated v Mackay (VO) [1988 RA 90] it was accepted that such clubs were exempt under s39 of the General Rate Act 1967 (GRA 1967). This exemption continued under schedule 5 para 11 of the Local Government Finance Act 1988 (LGFA 1988) and until 2001 virtually all clubs will have been assumed to be exempt. Subsequently it became apparent that the management of many of these clubs had changed since the MacKay case and it is no longer safe to presume that they qualify for exemption.

The key point in the Mackay case was that the priest retained control of the premises and as the occupier satisfied the test in s39(2)(b) GRA 1967.

Some clubs, however, are not controlled by the parish priest but are run by a committee. The committee will usually occupy under a lease granted by the Diocese. As the Church (through the priest) is no longer in occupation, exemption cannot apply under Schedule 5 para 11 LGFA 1988.

In all cases it will be necessary to establish who is the rateable occupier.

A consideration of the club’s constitution or club rules will help to establish who controls the use and functioning of the building. Also if the club is let to a committee this will be conclusive that the Church is no longer in occupation and exemption cannot apply.

Further advice can be obtained from Technical Advisers.

6. Survey Requirements

Clubs and Institutes should be measured to Net Internal Area (NIA) in accordance with the VOA Code of Measuring Practice for Rating Purposes.

7. Survey Capture

Rating surveys should be captured on the Rating Support Application (RSA) and plans and surveys stored in the property folder of the Electronic Document Record Management system (EDRM).

8. Valuation Approach

Typically the rental method of valuation should be adopted in determining the assessment of all club premises, rather than a turnover based approach. It is essential that all available evidence is considered and properly analysed in order to establish a proper basis of valuation. In considering any rental evidence it is important to establish whether or not the rent is at arm’s length, as some rents may be tainted as a result of connections between landlord and tenant or because the landlord is a brewer and the rent is subject to a tie.

Comparisons should be drawn over as wide an area as necessary and, in localities where rental information is limited, the CCT should liaise with Units ensuring that the valuation of this class is co-ordinated across the country. Although it is recognised that large differences in value could be justifiable.

Historically, The Royal British Legion Club rents have been agreed at discounted levels in return for accommodating the charity raising activities of the branch. The branch being an actual part of the RBL and the club in affect paying a fee to trade under the name of the RBL. Consideration should be given to the number of hereditaments that exist in these circumstances.

There is a distinct difference between Members’ and Proprietary clubs. This is mainly down to the fact that the former are non-profit making and the latter are generally run for profit. It is not always easy to tell them apart physically and even within the same type of club there can be a huge range. Proprietary clubs can be very similar in appearance to Members’ clubs and rental values would generally be expected to be at the same level for both for the majority of locations. However, Exclusive Members’ Clubs, such as those located in prime central London locations are likely to be valued having regard to the rental values for that particular type of club. In the absence of local rental evidence, regard to income would be appropriate.

An important characteristic of a club holding a club certificate is that there is a joint ownership of the stock of liquor by the members as a whole. When one member of the club is supplied with intoxicating liquor, there is not, in law, a sale of that liquor. They must also be non-profit making. There are many clubs that are ‘social clubs’ and the like in name only as they hold a premises licence enabling them to sell alcohol to non- members. Some proprietary clubs call themselves social clubs.

In some cases there is little difference between a public house and a club, if there is no requirement to hold a membership and the main objective is for profit, then regard should be had to whether the public house valuation basis is more appropriate (see Rating Manual: section 6 part 3 - section 825).

Care should be taken not to rely purely on the type of licence held when trying to distinguish between Members’ and Proprietary clubs. There are some genuine non-profit making Members’ clubs that hold a premises licence. Additionally there are some premises licences that have been issued where the club has volunteered certain conditions to be written in to the licence, restricting the sale of alcohol to members only. These conditions then become mandatory and cannot be breached.

9. Valuation Support

  • Rating Support Application (RSA)

  • Survaid

  • Class Co-ordination Team

Practice note 1: 2017 - Clubs and institutes

1.Market Appraisal

Clubs were once at the heart of the British working class population from small children right up to the elderly. They were often the starting venues for many famous live acts such as comedians and bands. However, there has been a general fall in their popularity over the years. Historically, this was linked to structural changes to heavy industry which occurred during the 1980s and 90s such as pit closures, but more recent decline has been a result of ageing membership, increased competition from supermarkets selling cheap alcohol, and other licensed and leisure facilities. There has also been a definite shift in public attitude towards clubs and drinking trends are changing as we become a more health conscious nation. Many are choosing to spend recreational time enjoying more outdoor pursuits. When we do socialise, it’s becoming more likely to be in small groups within a similar age range and food will more often be the focus, with alcohol to complement.

With membership dwindling, many clubs are struggling and face financial difficulties. In 1974 the CIU (Clubs & Institutes Union) had over 4,000 affiliated clubs. This number fell to 2,786 by 2,001, 2,702 by 2003 and as at 2012 this stood at approximately 2,000. The smoking ban which came into effect in July 2007 has been heavily blamed for the recent rise in club closures however it’s likely to be a combination of causes that has contributed to the number of closures seen nationally. On the plus side, some clubs have successfully managed to reinvent themselves as live music venues as the buildings tend to have good acoustics due to them originally being designed with entertainment in mind.

Regardless of club performance, it is rental evidence that must form the basis for rating valuation.

2. Changes from the last practice note

There was no Practice Note for the 2010 Revaluation.

3. Ratepayer Discussions

To date initial discussions have taken place with representatives of the industry and are ongoing.

It is still expected that detailed rental schedules are going to be provided by the main operators (or their agents). Some of this information is being supplied through the Valuation Office Ratepayer Contact Scheme (VORC). Direct rental evidence may not exist, rents quoted may relate to franchise rents rather than the rent of the individual unit so care needs to be taken.

4. Valuation Scheme

4.1 Background

For the 2017 revaluation, a network wide look at rents has been carried out by the CCT members with the aim of being able to provide value guidance to each Location and ensure a consistent approach is followed.

In previous revaluations some locations valued members’ clubs primarily by reference to age, construction and location and insufficient regard was had to other material factors, such as:

  • the different location factors of position and catchment area

  • internal quality and facilities

  • demand for the property

  • competition from other clubs and from other licensed leisure attractions

  • the demography and social and financial characteristics of the catchment area

  • material change of circumstances which had occurred over a number of years such as industrial decline and increased competition from other licensed and leisure attractions

In order to review the relative values of clubs in different locations, or different aged clubs within a locality, turnover, where the consumption of alcohol is a significant activity, (Gross Takings All Sources) has been used as one of the indicators of the relative merits of particular locations or clubs as well as a measure of the effect of MCCs. The use of turnover information for members’ clubs, in this limited way, may be helpful but it should be remembered that the way in which clubs are run varies greatly and the actual turnover of a particular club is not necessarily indicative of the true potential of a club. In many instances a club’s motive is not solely to provide intoxicating liquor nor necessarily to maximise turnover and it is therefore important that valuers do not place too much weight on turnover information but use it as one of the many factors that will indicate the use of the club by members and help establish the appropriate level of value for a particular club.

For proprietary clubs, where the aim of the occupier is to maximise profits of a business, turnover has a greater relevance as a means of comparison. It must, however, be remembered that for rating purposes the assumption is that the business will be proficiently carried out by a competent operator responding to the normal trading practices and competition of the locality. The objectives of the club and its amenities are relevant and if a proprietary club trades like a public house in a building capable of so operating then regard should also be had to a valuation on the licensed property basis.

If turnovers are being compared between two dates, any increase may in part be due to inflation, and may not necessarily be a sign of increased profit.

4.2 Relativities

Floor level Accommodation % of main space
GF Main bar, lounge, clubroom 100%
  Offices, committee rooms, Kitchens 66%
  Beer Cellars Stores 50%
  Changing rooms 66%
FF Main bar, lounge, clubroom 75%
  Offices, committee rooms, Kitchens 50%
  Beer cellars, stores 37.5%
Bst Main bar, lounge, clubroom 50%
  Beer cellars, stores 25%
  Offices, committee rooms, Kitchens 25%
Outside Outbuildings 25%

4.3 Car Parking

It is recommended that the values adopted should reflect car parking, except where it can be shown that the presence of exclusive parking facilities adds value to the club. Where a club does not have an exclusive car park it is unlikely than an allowance would be warranted unless the parking facilities in the locality are wholly inadequate. If additional value is placed on parking, the level per space adopted should reflect the spaces as ancillary to the club and not necessarily at the full car park value for that location. This stand back and look approach will avoid situations where the parking total value forms by far the largest proportion of the RV.

4.4 Heating & Air Conditioning

It is recommended that the values adopted should reflect heating and that a deduction of 5% should be made where heating is not present (except for cellars, outbuildings etc. where this is reflected in the relativity adopted).Where air conditioning is present, an addition should be made to the valuation for this element.

4.5 Sports Facilities

Some clubs may include within the hereditament sports facilities such as a bowling green or football pitch.

In order to be able to compare the main space prices of one club with another it is recommended that where a club includes sports facilities that these be valued separately having regard to the prevailing tone for such amenities and not reflected in the price adopted for the club. The club price adopted should, however, adequately reflect the cost of providing and maintaining the sports facility.

Care must be taken to distinguish between a social club with a sports facility (to be valued as a social club) and a sports ground and clubhouse with social membership (to be valued as a sports ground). In cases of doubt the main objectives in the club’s constitution will determine whether to value as a social club or as a sports facility (see Rating Manual: section 6 part 3 - section 970).

4.6 Quantum/Obsolescence

In some instances there may be parts of a club that are no longer used and are surplus to requirements or clubs that are now disproportionately large compared with their current needs. These are factors for which adjustments may be required but caseworkers should exercise great care in such cases.

4.7 Split Level Sites

In some cases where a club occupies a split level site there may be main space accommodation such as snooker rooms, concert rooms, committee rooms etc. at lower ground floor level. In such instances it is recommended that if the accommodation is comparable in quality to that normally found at first floor level that the first floor relativities are adopted.

4.8 Other non-Standard Accommodation

Some clubs may include additional ancillary accommodation such as gyms, boxing rings, skittle alleys etc. and these should be valued having regard to their quality in comparison to other parts of the club.

4.9 Dressing Rooms

Fitted dressing rooms located within the main structure of the concert room should be valued as part of the concert room. If the dressing room is structurally separated from the concert room it should be valued on the office relativity. Measured to NIA both staff and customer toilets (WCS) should be deemed reflected in the basic price adopted. Cloakroom areas should be included in the valuation.

4.10 Entrance Areas

Measuring to NIA these will generally be excluded. Large entrance areas, however, which have facilities such as cigarette or gaming machines should have part of their area included in the valuation.

Practice note 1: 2005: Clubs and institutes.

1. Co-ordination

Clubs and Institutes are a Group co-ordination class and as such responsibility for ensuring the appropriate co-ordination takes place lies with the Groups. As there is likely to be limited rental evidence it is essential that Groups co-ordinate across boundaries and share rental evidence with adjoining Groups.

Co-ordination responsibilities are set out in Rating Manual: section 6 part 1.

Special Category Code 061G should be used.

The popularity for members’ clubs continues to decline in many areas. Historically this was linked to structural changes to heavy industry which occurred during the 1980s and 90s such as pit closures, but more recent decline has been a result of an ageing membership, increased competition from other licensed and leisure facilities and as a consequence of changes in the public’s attitude towards clubs.

In 1974 there were over 4000 CIU affiliated clubs. This had fallen to 2786 by 2001 and 2702 by 2003 with, on average, circa 85 clubs closing per year (source The Stage News).

The effects of these changes will vary across the country and VOs need to be aware of the changes in their localities in order to be able to compare one location with another, and to compare the situation as at the AVD of 1 April 2003 with the circumstances prevailing as at 1 April 1998.

3. Case Law

In Aberman Ex Servicemen’s Social Club and Institute Ltd v Aberdare UDC (1947 KDB 40 R&IT 576) the Court of Appeal confirmed the VO’s view that turnover cannot and should not be used as a primary method of valuation for members’ clubs. Members’ clubs are run by or on behalf of the members and are not operated for profit and as a consequence a receipts and expenditure approach to valuation is not considered appropriate. In also rejecting the contractor’s basis of valuation the Valuation Tribunals have reaffirmed the need to consider and come to terms with any available rental evidence.

The United Services and Services Rendered Club (Tooting and Balham) Ltd and the Putney Club v Thorneley (VO) [1998 RA 861] is the most recent club case to be heard at the Lands Tribunal. It is important that valuations of members’ clubs are based on rental evidence rather than turnover and that the comments made by the Lands Tribunal in this case are fully taken into account (see Rating Manual: section 6 part 3 - section 260 paragraph 4.2).

4. Valuation Approach

The rental method of valuation should be used for all clubs and institutes. Levels of value should be determined at Group level having regard to the evidence.

It is essential that all available evidence is considered and properly analysed in order to establish a proper basis of valuation. In considering any rental evidence it is important to establish whether or not the rent is at arms length as some rents may be tainted as a result of connections between landlord and tenant or because the landlord is a brewer and rent is subject to a tie.

Due to the paucity of open market rents it is important that VOs exchange rental information with the other Groups within their cluster and also discuss levels of value adopted.

In previous revaluations some offices valued members’ clubs primarily by reference to age, construction and location and insufficient regard was had to other material factors, such as:

  • the different location factors of position and catchment area

  • internal quality and facilities

  • demand for the property

  • competition from other clubs and from other licensed leisure attractions

  • the demography and social and financial characteristics of the catchment area

  • material change of circumstances which had occurred over a number of years such as industrial decline and increased competition from other licensed and leisure attractions

In order to review the relative values of clubs in different locations, or different aged clubs within a locality, turnover, where the consumption of alcohol is a significant activity, (Gross Takings All Sources) has been used as one of the indicators of the relative merits of particular locations or clubs as well as a measure of the effect of MCCs. The use of turnover information for members’ clubs, in this limited way, may be helpful but it should be remembered that the way in which clubs are run varies greatly and the actual turnover of a particular club is not necessarily indicative of the true potential of a club. In many instances a club’s motive is not solely to provide intoxicating liquor nor necessarily to maximise turnover and it is therefore important that valuers do not place too much weight on turnover information but use it as one of the many factors that will indicate the use of the club by members and help establish the appropriate level of value for a particular club.

If a VO needs to have regard to accounts when considering the relative merits of one club against another or one locality compared to another or in considering claims that a MCC has detrimentally affected a club or locality copies of accounts may be available from the Registry of Friendly Societies who are at 34 Kingsway, London WC2B 6ES (Tel 020 7663 5276). A charge is made for copies of accounts.

For proprietary clubs, where the aim of the occupier is to maximise profits of a business, turnover has a greater relevance as a means of comparison. It must, however, be remembered that for rating purposes the assumption is that the business will be proficiently carried out by a competent operator responding to the normal trading practices and competition of the locality. The objectives of the club and its amenities are relevant and if a proprietary club trades like a public house in a building capable of so operating then regard should also be had to a valuation on the licensed property basis.

If turnovers are being compared between two dates, an increase in turnover may in part be due to inflation, and may not necessarily be a sign that a club is doing better.

5. Relativities

Due to the paucity of reliable rental evidence it is important that Groups endeavour to harmonise relativities.

As variations in relativities may be difficult to substantiate, it is recommended that the following be applied:

Accommodation

% of main space

Ground Floor

Main bar, lounge, clubroom

100%

Offices, committee rooms, kitchens

66%

Beer cellars, stores

50%

Changing rooms

50%

First Floor

Main bar, lounge, clubrooms

75%

Offices, committee rooms, kitchens

50%

Beer cellars, stores

37.5%

Basement

Beer cellars, stores etc

25%

Outside

Outbuildings

25%

The basis of measurement should be NIA.

6. Car Parking

It is recommended that the values adopted should reflect car parking, except where it can be shown that the presence of exclusive parking facilities adds value to the club. Where a club does not have an exclusive car park it is unlikely that an allowance would be warranted unless the parking facilities in the locality are wholly inadequate.

7. Heating and Air Conditioning

It is recommended that the values adopted should reflect heating and that a deduction of 5% should be made where heating is not present (except for cellars, outbuildings, etc. where this is reflected in the relativity adopted).

Where air conditioning is present an addition should be made to the valuation for this element.

8. Sports Facilities

Some clubs may include within the hereditament sports facilities such as a bowling green or football pitch.

In order to be able to compare the main space prices of one club with another it is recommended that where a club includes sports facilities that these be valued separately having regard to the prevailing tone for such amenities and not reflected in the price adopted for the club. The club price adopted should, however, adequately reflect the cost of providing and maintaining the sports facility.

Care must be taken to distinguish between a social club with a sports facility (to be valued as a social club) and a sports ground and clubhouse with social membership (to be valued as a sports ground). In cases of doubt the main objectives in the club’s constitution will determine whether to value as a social club or as a sports facility (see RM : Sect 6 Part 3 : S970

9. Quantum/Obsolescence

In some instances there may be parts of a club that are no longer used and are surplus to requirements or clubs that are now disproportionately large compared with their current needs. These are factors for which adjustments may be required but caseworkers should exercise great care in such cases.

10. Split Level Sites

In some cases where a club occupies a split level site there may be main space accommodation such as snooker rooms, concert rooms, committee rooms etc. at lower ground floor level. In such instances it is recommended that if the accommodation is comparable in quality to that normally found at first floor level that the first floor relativities are adopted.

11. Other Non Standard Accommodation

Some clubs may include additional ancillary accommodation such as gyms, boxing rings, skittle alleys etc. and these should be valued having regard to their quality in comparison to other parts of the club.

12. Dressing Rooms

Fitted dressing rooms located within the main structure of the concert room should be valued as part of the concert room. If the dressing room is structurally separated from the concert room it should be valued on the office relativity.

13. Customer Toilets

Measured to NIA both staff and customer toilets (WCS) should be deemed reflected in the basic price adopted. Cloakroom areas should be included in the valuation.

14. Entrance Areas

Measuring to NIA these will generally be excluded. Large entrance areas, however, which have facilities such as cigarette or gaming machines should have part of their area included in the valuation.

15. Catholic Clubs and Exemption

Roman Catholic Clubs are widespread throughout the Archdioceses of Liverpool, Shrewsbury, Salford and Lancaster and possibly elsewhere. The clubs are run with the object of fostering the spiritual and social life and well being of the parish by providing the members with the opportunities and facilities for sociality, recreation and refreshment in suitable surroundings and to raise money for parochial purposes.

Following the Lands Tribunal case of Liverpool Roman Catholic Archdiocesan Trustees Incorporated v Mackay (VO) [1988 RA 90] it was accepted that such clubs were exempt under s39 of the General Rate Act 1967 (GRA 1967). This exemption continued under schedule 5 para 11 of the Local Government Finance Act 1988 (LGFA 1988) and until 2001 virtually all clubs will have been assumed to be exempt. Following investigations carried out by CEO in 2001 it became apparent that the management of many of these clubs had changed since the MacKay case and it is no longer safe to presume that they qualify for exemption.

The LT decision turned on two main issues; 1. The interpretation of the phrase “…church hall, chapel hall or similar building…” and whether the subject club could be so described. 2. Whether the use of the club building fell within the definition of s39(2)(b) GRA 1967 “….and so used for the purposes of the organisation responsible for the conduct of public religious worship.

The key point in the Mackay case was that the priest retained control of the premises and as the occupier satisfied the test in s39(2)(b) GRA 1967.

The majority of the clubs within the Liverpool Archdiocese are now managed by a limited company called “Archdiocesan Parish Centres Management Company Limited” [APCMC Ltd] which was created in response to concerns expressed by the Charity Commissioners. The terms of the management agreement are such that each Parish Priest retains effective day-to-day control of his clubs and there is no real change in the rateable occupation from that applicable at the time of the MacKay case. The other main diocese affected operate in the same way and clubs managed by the following companies are likely to remain exempt:

“Lancaster Diocesan Clubs and Centres Limited”

“Shrewsbury Diocese Commercial Company Limited”

“SDC Trading Limited”

There may be similar arrangements in other Diocese and advice should be taken from the appropriate CEO (Local Taxation) Technical Adviser where such exemption is claimed.

If the priest is the rateable occupier and the use is primarily for Church purposes then it may be exempt.

Some clubs, however, are not controlled by the parish priest but are run by a committee. The committee will usually occupy under a lease granted by the Diocese. As the Church (through the priest) is no longer in occupation, exemption cannot apply under Schedule 5 para 11 LGFA 1988.

In all cases it will be necessary to establish who is the rateable occupier.

A consideration of the club’s constitution or club rules will help to establish who controls the use and functioning of the building. Also if the club is let to a committee this will be conclusive that the Church is no longer in occupation and exemption cannot apply.

This policy has been successfully maintained at VT.

Further advice can be obtained from CEO Local Taxation Technical Advisers.