In this section
My name is … … … … … … ….
I am appearing as an advocate for the Listing Officer, being duly authorised* to do so by [name] the Listing Officer for [name of billing authority].
[* ensure that the written authorisation is taken to the VT hearing]
Introduce any other VOA staff and other parties present.
This appeal concerns a proposal made on [date] seeking to reduce the Council Tax Band in respect of [address].
However, the substantive point to be determined by the valuation tribunal today concerns the validity of that proposal. I shall be addressing the tribunal on the legal requirements for a valid proposal and how they need to be satisfied.
Accordingly, at this hearing I shall not be looking at the banding of this property, bringing evidence of value or of entries in the Council Tax List. Such matters may be determined once the validity, or otherwise, of the proposal is determined.
It is my contention before the tribunal today that this proposal is not validly made as it does not comply with legal requirements that govern the administration of Council Tax.
This legislation is principally contained in the Council Tax (Alterations of Lists and Appeals) (England) Regulations 2009 [Statutory Instrument 2009/2270] and I have included the relevant part of the legislation at appendix *.
My detailed reason[s] for this assertion is [are] as follows:
[Caseworker can choose the relevant (parts of) cases 1 - 5 for case presentation]
Case 1: Where the restricted circumstances for making proposals are not satisfied:
Regulation 3 is headed ‘Restrictions on alteration of valuation bands’, and Regulation 4 has the heading ‘Circumstances and periods in which proposals may be made’.
The whole tenor of the legislation dictates that there are limited circumstances in which proposals can be made. If one seeks to make a proposal outside these specific circumstances, it will not be valid and no further action can be taken in respect of it.
Regulation 4 sets out circumstances and periods in which proposals may be made. The relevant part of the legislation may be paraphrased as follows:
(Choose the relevant part of the legislation)
Under 4(1) Proposals can be made
(a) Where a dwelling is shown in the list which ought not to be shown.
(b) Where the list fails to show a dwelling which ought to be shown.
(c) Where the listing officer has determined a valuation band incorrectly.
(d) Since the band was first shown in the list there has been:
A material increase and relevant transaction
A material reduction (i.e. demolition of whole or part, change in the physical state of a dwelling’s locality, or works involving adaptations for the disabled (S24(10) LGFA1992). Where a material reduction is wholly due to demolition of part, the band shall not be altered if the works of demolition are part of, or connected with, a building, engineering or other operation carried out, in progress, or proposed to be carried out in relation to the dwelling".
In other words, if a demolition occurs simply as a precursor to carrying out an improvement, no alteration to the List is to be made.
Dwelling has ceased to be a composite
Increase or reduction in domestic use in a composite
(e) Account has not been taken of a relevant VTE or High Court decision, and a band change is necessary. Under Reg 4(2) such a proposal must be made within six months of the date of decision.
“Subject to paragraph (4) and regulation 7(3)(a), where, in relation to a dwelling shown in a list [compiled under section 22 or 22A of the Act] on the day on which it is compiled, a billing authority or an interested person is of the opinion that the list is inaccurate because the LO has determined as applicable to a dwelling a valuation band other than that which should have been determined as so applicable, any proposal for the alteration of the list as regards that matter must be made not later than the end of the period of six months beginning on the day on which the list is compiled”.
…In other words, any person or body that was an interested person at the date the List was compiled (1st April 1993) had until 30th November 1993 to make a proposal. For the proposal in question the maker of the proposal was an interested person as at the date the list was compiled and so this proposal is out of time, and is therefore invalid.
[NB. This is likely to apply in a considerable number of cases.]
Paraphrasing Regulation 4(4), when a person becomes a new taxpayer in respect of a particular dwelling they may make a proposal. However, under Regulation 4(5) this opportunity ceases to exist:
(a) where six months has expired since becoming the taxpayer, or
(b) where a proposal has been considered for the same dwelling under the same facts by a VTE or the High Court
Sub-paragraphs (c) to (f) of Regulation 4(5) relate to the rare situations concerning companies and partnerships.
…The proposal was received on */*/**. The maker of the proposal became the taxpayer on */*/**, * years/months previously. As a consequence this proposal does not meet the requirements of this regulation and so the proposal is invalid.
Regulations 4(6) & 4(7)
Paraphrasing Regulation 4(6), a billing authority or an interested person may make a proposal against a list alteration by the listing officer within six months of the service of the notice of alteration, seeking either or both of the following:
(a) the restoration of the list to its state before the alteration was made,
(b) a further alteration of the list in respect of that dwelling.
However, under Regulation 4(7), this does not apply if the alteration in question:
(a) consists of –
(i) the insertion or alteration of a reference number,
(ii) the alteration of an address,
(iii) the correction of a clerical error, or
(iv) the entry of the day from which an alteration has effect where the day is the completion day determined under Schedule 4A in relation to the dwelling concerned; or
(b) reflects a change in the area of the billing authority or the decision of a valuation tribunal or the High Court in relation to the dwelling concerned.
…The proposal in question was received *months / years after the list alteration took place and so is therefore invalid/the alteration was for a matter mentioned in Regulation 4(7) and so is therefore invalid.
Case 2: Where the Proposal has not been made in the prescribed manner:
Paraphrasing Regulation 5(1), it requires that a proposal shall be made in writing, served on the listing officer and:
(a) state the name, address and capacity of the proposer;
(b) identify the dwelling;
(c) identify in what respect the list is to be altered; and
(i) a statement of the reasons for believing the list to be inaccurate;
(ii) [for a Regulation 4(1)(d) proposal] - a statement of the reasons for the belief that an event mentioned in sub-paragraph (a) of paragraph (1) of regulation 4 has occurred [see list of bullet points in case (b,) above], and of the date on which the event occurred.
(iii) [for a Regulation 4(1)(e) proposal]- a statement identifying the property to which the decision relates, the date of decision and whether it was by the valuation tribunal or the High Court.
(iv) [for a Regulation 4(4) proposal] - the date the proposer became the taxpayer
(v) [for a proposal disputing the accuracy of a LO alteration] - the date of that alteration.
(vi) [for a proposal disputing the effective date] - an alternative date.
…The proposal in question has not been made in the prescribed manner because, specifically, it did not include *. Therefore, the proposal is invalid.
Case 3: Where the maker of the proposal is not an Interested Person under the regulations:
● Under Regulation 4(1), only “Interested Persons” have the right to make a proposal. In the current case the person who signed the document does not qualify as an interested person.
● Regulation 2 defines “interested person” as ‘the owner’ [Regulation 2(1)(a)] or ‘any other person who is the taxpayer’ [Regulation 2(1)(d)].
● Regulation 2 also states that, “’taxpayer’ in relation to a dwelling … means the person who is liable (whether solely or jointly and severally) to pay council tax in respect of the dwelling …”.
NB. Taxpayers can include former owners who have been served with a bill for an historic period of occupation and are liable in respect of a day, though now they may neither be owners or occupier. But only if they have been served with a bill, otherwise they are not an interested person]
Only after this “interested persons” requirement has been satisfied, can one proceed any further.
In this particular case there is no Interested Person as defined in the Regulations and therefore a valid proposal cannot have been made.
(NB As a general policy, a proposal may be accepted as valid where any local physical change has occurred and that has been identified on the proposal. The proposer only has to be of the opinion that the list is inaccurate and such a change has caused a material reduction in the value of the dwelling. Whether there has been such a material reduction is a matter of valuation, rather than a validity issue.)
“Material Reduction” in relation to the value of a dwelling is defined in section 24(10) of the Local Government Finance Act 1992 as “any reduction which is caused (in whole or in part) by the demolition of any part of the dwelling, any change in the physical state of the dwelling’s locality or any adaptation of the dwelling to make it suitable for use by a physically disabled person;”.
Effectively, there are 3 elements to this.
(1) the demolition of any part of the dwelling
(2) any change in the physical state of the dwelling’s locality
(3) any adaptations of the dwelling to make it suitable for use by a physically disabled person.
It is only point (2) that is relevant in this context.
Under Regulation 5 (1)(d)(ii), the proposer must include a statement of the reasons for belief that a material reduction has occurred. Where this involves a physical change, it must be identified. Whether that physical change is in fact value significant or band significant cannot be determined at the point of receipt.
The phrase ‘state of the dwelling’s locality’ should be taken to imply something fixed and permanent, not something that is subject to daily or weekly change.
There are two elements to consider:
Has there been a ‘change in the physical state’?
Is it within ‘the dwelling’s locality’?
In essence, ‘a change in the physical state’ means a change in the physical landscape, buildings or infrastructure, and could include, for example, new telephone masts or pylons, new or widened roads, and new or extended buildings. An intensification of an exiting use (e.g. an increase in the volume of traffic) does not in my view, constitute a ‘change in the physical state’, but permanent alterations to a road layout would be a ‘change in the physical state’.
What constitutes the dwelling's locality will be a matter of fact and degree. In general, the smaller the 'change in the physical state', the smaller the locality within which it might have a value impact. An extension to 5 Acacia Avenue is a 'change in the physical state' and is clearly in the 'locality' of 3 Acacia Avenue, but is not likely to be in the 'locality' of 123 Acacia Avenue. A new sewage works close to Acacia Avenue is also a 'change in the physical state' and would most likely be perceived as being in the locality of all of Acacia Avenue (and beyond).
Unlike rating legislation, there is no reference in CT regulations to matters that are physically manifest in the locality and the two concepts should not be confused.
An intensification of an existing use of a building, for example a factory making more noise than before or a road creating greater impact on amenity, may well be physically manifest in the locality, but they have not affected the physical state of the locality. As such they might affect a non domestic valuation, but cannot be taken into account in Council Tax. The word ‘matters’ is not used at all in the Council Tax legislation, only the phrase ‘physical state’. If it were the intention of Parliament that the same factors should be taken into account for Council Tax the regulations would not have been drawn up in different terms.
The whole tenor of the CT regulations concerning alteration of the list is couched in restrictive terms, not inclusive terms. Hence the heading, “Restriction on alteration of valuation bands”, applied to Regulation 3, which includes the definition of ‘material reduction’.
There will be thousands of possibilities, but the following illustrative examples may help:
The placing of a lamp post where there was not one before, and the bright light affecting the enjoyment of the dwelling – valid. This is a physical change (and whilst not likely to be value significant cannot be determined as invalid at receipt stage)
The moving of a lamp post a few feet – invalid. This might not considered to be a change to the locality, as there was a lamp post in the locality before.
Increase in traffic and factors associated therewith –invalid, not considered to be a physical change.
The completion of a new road layout close to the boundary of the property – valid
The completion of a Nuclear Power Station, say a half a mile (or more) from the property – valid. It would be difficult to argue that a change of that scale would not be considered to affect values in a quite a wide locality.
The above examples are purely illustrative, not prescriptive. The concept of locality cannot be interpreted as a purely geographical distance, as illustrated by the power station example. The size and scale of a physical change will influence how wide the ‘locality’ is within which it will have a value effect. A small change, therefore, will be value significant in a small locality, whereas a major change could well have impact over a greater distance.
Any change in the physical state, has to be considered in terms of market conditions at the AVD of 1 April 1991. Whether such changes affect value to the extent that a band reduction should be made will depend on the evidence. What is perceived to have an effect on value today, may not have been relevant at the AVD.
…The reasons for my view that the circumstances do not constitute a physical change to the dwelling’s locality are ….(LO to relate issues specific to property- facts of case etc)
Case 5: Where the proposal seeks to reflect land contamination which is not a ‘material reduction’ case:
(where knowledge of degree of contamination has come to light well after the construction of the dwellings, and where no physical change to dwelling’s locality has taken place. Each case will be different and only the main headings are given below)
The description of the property – present nature of the contamination.
The history, how it came to be in the soil, the date at which contamination occurred.
The circumstances of the new development, dates and knowledge at the time of the history of the site.
Evidence of effect of contamination at AVD as evidenced in sales prices
Circumstances of more recent investigation of contamination, evidence of recent change of knowledge.
Evidence of no change to physical state of dwelling’s locality. Unchanged physical environment.
Outline the ‘material reduction’ regulation as above in its three elements only.
…The question to be answered is, ‘Has a material reduction actually occurred according to the regulations?’ Has there been a change in the physical state of the dwelling’s locality since AVD? (or since the dwelling was entered into the list). The answer is that in this case the physical locality is actually unchanged.
…When one walks round the estate, there is no physical change visible which could support the contention that a valid material reduction proposal can be made. (describe circumstances etc…)
…What has changed is market perception as at date of proposal.
…In consequence, the circumstances do not fit into the circumstances of ‘material reduction’. The change has been a change of knowledge, not a physical change in the state of the dwelling’s locality. Since AVD the locality has not changed. The contamination pre-existed the construction of the dwelling. This does not, unfortunately, qualify the proposal as a valid under the material reduction provisions.
…The fact that a reduction in value may have occurred does not in itself make the proposal valid, the reduction has to be caused by one of the three factors in the regulations, i.e. demolition, a change in physical state of a dwelling’s locality or disabled adaptations.
Unfortunately the restrictive nature of the CT regulations does not allow a band reduction to be considered in these circumstances. Such a change would have to wait until a general revaluation before it could be properly reflected.
…The matter has been considered twice by VT’s recently and I would refer the tribunal to a decision of the Surrey VT dated 13th February 2006 concerning a property in Dorking and a decision of the Buckinghamshire VT dated 19th March 2007 concerning a case in Amersham, (appeal number 0410396951/162C/1
1. …Validity of proposal was the main issue as a primary consideration in a test case in Surrey in which the LO was represented by HMRC Solicitor was referred to. The Tribunal was held in November 2005 and the final decision was not published till mid February 2006, following requests from both parties to amend the decision to correctly report factual evidence given at the hearing. The Surrey VT held that the proposal was invalid, thus upholding the LO’s arguments. Briefly these are that the change in knowledge following the publication of the council’s contamination reports and any effect on property value, do not constitute a “material reduction” in value under CT legislation because no physical change to the dwelling’s locality has occurred, as required by S24(10) LGFA1992. No appeal has been received against this decision. The Appeal number is 362037828/154C/6.
The address of the appeal property 1 Durleston Park Drive, Great Bookham, Leatherhead, Surrey KT23 4AJ.
2. The second Buckinghamshire VT decision again confirmed the correct approach on this difficult issue. The proposal was held to be invalid as a material reduction had not taken place. There had been no actual change in the physical state of the dwelling’s locality, owing to the pre-existing historic nature of the contamination. The only change was the state of knowledge that had more recently affected the market. The decision is dated 19th March on appeal number 0410396951/162C/1.
The property was 144 Lent Rise, Burnham, Slough, SL1 7BH.
This case concerned contamination under the surface of the ground which was alleged to have crept towards the surface over the years, though whether this had or had not happened could not be established.