News In Focus
Court rejects recession-related rates reductions
7 September 2012
Two groups of traders have failed in their attempts to secure a reduction in their business rates due to a drop in turnover since the onset of the recession.
Three Court of Session judges chaired by the Lord President, Lord Gill, sitting as the Lands Valuation Appeal Court, allowed appeals by the assessors for Fife and Tayside against decisions by local valuation committees to allow reductions in rateable values due to a "material change of circumstances". The cases concerned the Mercat Shopping Centre, Kirkcaldy, and the Overgate Centre, Dundee.
The issue arose over the timing of the change of circumstances relied on, in relation to the making up of the new valuation roll in force from 1 April 2010. This was claimed to be 1 April 2009 in the Dundee case and 1 September 2009 in the Kirkcaldy case. Under the legislation the valuations for the new roll had to take place as at a common date (the "tone date") of 1 April 2008, but material changes of circumstances could only be taken into force if occurring after the roll came into force.
Both committees decided that this gave rise to anomalous and unfair results, and the legislation must have intended that any material change after the tone date could be taken into account. But Lord Gill, delivering the leading judgment in each case, said in the Kirkcaldy case that that approach was "insupportable". "It is the duty of the Committee to decide appeals on the basis of what the legislation says and not what it would wish it to say", he commented.
In the Dundee case he explained: "The fundamental principle on which a revaluation is carried out is that all of the lands and heritages entered in the new roll are valued to a common base... Inevitably, there will be increases and decreases in the values of various groups or classes of lands and heritages during that period; but for there to be consistency in the roll it is essential that all lands and heritages in the new roll must be valued as at one fixed date."