NEW CASES
Meadowbank International Ltd v Allis (VO) [2020 UKUT 0321 (LC)
This case concerned a former gym in Long Eaton, near Nottingham, which had stood vacant after the previous occupier became insolvent in 2014. The property was made up of two separate assessments and whilst work had commenced on one assessment, the other one remain untouched. The Upper Tribunal found that the untouched assessment remained capable of rateable occupation and as such should not have been removed from the list, despite work to the property as a whole. Whilst this case does not make any significantly new points, it is a useful reminder that the determining factor is not whether or not there is an intention to redevelop, but whether or not the property is incapable of beneficial occupation as a result of works.
Isle Investments Ltd v Leeds City Council [2021] EWHC Admin 345
In a recent decision the High Court has upheld a Magistrates’ Court decision that a business rates avoidance scheme was a sham and as such the business rates were payable by the landlord. The case involved a rates avoidance company which was employed by the landlord to implement a rates avoidance scheme.
The scheme involved the landlord granting a number of short-term leases to newly formed shell companies with a restriction that the properties could only be used for the purpose of heliciculture by the tenant. A Magistrates’ Court District Judge found that the leases were in fact shams and as such the property owner remained liable. On appeal, the High Court found that the District Judge had reached a conclusion that was reasonably and logically open to her on the evidence and the appeal was dismissed.
With no apology for the pun, it is clear that the use of ‘shell’ companies in such schemes, where the evidence does not accord with the purported intention runs the risk of courts finding that the arrangement is a sham and the scheme will fail.
EXISTING CASES
London Borough of Southwark v Ludgate House Limited and Valuation Office Agency 2020 EWCA Civ 1637 (The Guardians Case)
As was noted in our last update, the Court of Appeal found in the Council’s favour and refused permission for Ludgate House Limited to appeal to the Supreme Court. Ludgate House Limited has since requested permission to appeal directly and this is currently being considered by the Supreme Court. A decision on whether permission is granted is expected after Easter.
Nuffield Health v London Borough of Merton [2020] EWHC 259 (Ch)
In this case, the High Court found that a gym operated by a registered charity, but which charges £80 per month in membership fees is still wholly or mainly used for charitable purposes. The full decision can be found here . It is understood that the decision was appealed by the Council and was heard in January. A decision is awaited.
Derby City Teaching Hospitals NHS Foundation Trust and 16 Others v Derby City Council and 44 Others [2019] EWHC 3436 (Ch)
In December 2019, the High Court held that NHS Foundation Trusts are not charities for business rates’ purposes and are therefore not entitled to the 80% reduction in business rates’ liability automatically afforded to them. It is understood that 11 out of the original 17 Trusts decided to appeal and the hearing is listed for the end of April. Updates will be provided as this matter proceeds.
Museums – Hughes (VO) v Exeter City Council (2020) UKUT 0007 (LC)
Following our last update on this in October which talked about discussions taking place on a way forward for appeals of museum assessments for both 2010 and 2017, the valuation principles at the heart of this case are now subject to further Upper Tribunal decisions so all cases have been stayed. This potentially has wider repercussions than just museums and the team at WHE will be keeping a close eye on progress and will update clients as and when any final decisions are made.