It is for local authorities to ensure that non-domestic rating lists are accurate and up to date and businesses are under no obligation to point out errors. The High Court made that point in ruling that one such mistake entitled an IT company, at least in principle, to a rates rebate of more than £160,000.
The company held the head lease of an office block. In defining the unit of property – or hereditament – on which it was said to be liable to pay rates, the local rating list mistakenly included certain parts of the building that the company had sublet to other businesses, thus giving up exclusive occupation of those parts.
After paying a rates bill of £164,159 under protest, the company took legal action with a view to recovering that sum. A judge concluded that, as the company was not in exclusive occupation of the whole hereditament, it was not in rateable occupation of any of it and had no liability whatsoever to pay business rates. He ruled that the council was in principle obliged to reimburse the company for its overpayment.
In rejecting the council’s challenge to that ruling, the Court noted that it was common ground that the company was not, during the relevant period, in exclusive occupation of the entirety of the hereditament because parts of it had been sublet. On a true reading of the relevant provisions of the Local Government Finance Act 1988, the company was therefore not in rateable occupation of the hereditament at all.
The Court noted that there was nothing bizarre about the requirement that, in order to be rateable, occupation must also be exclusive. The remedy for the council was obvious: to alter the rating list so as to render it correct. The Court noted that a further hearing would be required to consider whether the council had any viable grounds for resisting the company’s reimbursement claim.
