The Business Rates Regime is Complex - Seek Legal Advice For Certainty

The law relating to business rates is intricate to say the least, and without expert legal advice commercial property occupiers can fall victim to its complexity. The High Court made that point in rejecting a tenant's determined challenge to a non-domestic rates bill.

For a period of eight months, the corporate tenant occupied premises that did not appear on the relevant local non-domestic rating list. They were not entered on the list until almost a year after the tenant moved out. The local authority purported to back-date the listing so that it covered most of the period during which the tenant was in occupation. On that basis, the tenant received a demand for more than £7,000 in non-domestic rates.

In refusing to pay the bill, the tenant argued that the council had no power under the Local Government Finance Act 1988 to retrospectively list the premises. It said that liability to pay rates did not arise because the premises did not appear on the list at any time during the relevant period of occupation. Magistrates were not persuaded by that argument and issued a liability order against the tenant.

Amongst arguments put forward by the tenant in challenging that outcome was that, if back-dating were permissible under the Act, those who enter into occupation of commercial premises that do not appear on a rating list would have no way of knowing that they might face a rates liability at some point in the future.

Rejecting the appeal, however, the Court noted that commercial occupiers must be taken to understand the law, however unrealistic such an expectation might be. The risk that the rating list might be amended with retrospective effect was thus something the tenant should have known about.

In disputing the bill, the tenant had overlooked the effect of the Non-Domestic Rating (Alterations of Lists and Appeals) (England) Regulations 2009, which permit back-dated alterations to rating lists in certain circumstances. The Court noted that, had the local authority brought the Regulations to the tenant's attention at an early stage in the proceedings, a great deal of time and expense might have been saved.