Liability for business rates
Liability for business rates

The following Property practice note provides comprehensive and up to date legal information covering:

  • Liability for business rates
  • Occupiers
  • Owners
  • Persons named in central ratings lists
  • What is a hereditament?
  • Office blocks—reversal of the ‘staircase tax’
  • Staircase tax—history
  • The four ingredients of rateable occupation
  • Exclusive/paramount occupation
  • Joint occupation
  • More...

Liability for business rates

The Local Government Finance Act 1988 (LGFA 1988) identifies three categories of ratepayer:

  1. occupiers

  2. owners, and

  3. persons named in central rating lists

Occupiers

An occupier is a person who on any day in a chargeable financial year (ie a period of 12 months beginning 1 April) is in occupation of all or part of a hereditament that is shown for the day in a current local non-domestic rating list.

Owners

An owner is the person entitled to possession of the hereditament. He is rateable if the hereditament is unoccupied, he owns the whole hereditament that is shown for the day in a current local non-domestic rating list and the hereditament falls within a class prescribed by the Secretary of State by regulations.

If the property is let, the tenant will be the person entitled to possession. Plainly the lease must be a genuine arrangement—a sham for the purpose of avoiding rateable occupation will not pass liability to the alleged tenant.

For more information on business rates mitigation schemes, see Practice Note: Business rates—empty property.

Persons named in central ratings lists

The Secretary of State may direct that hereditaments in the occupation of designated persons be included in the central rating list for England or Wales. Such designation is mainly intended for those sorts of hereditaments which spread over numerous charging authority boundaries (eg networks of gas pipes, electricity

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