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AN ARTICLE by Peter Scrafton FIRRV, FCIArb, MRSA(Hon) Solicitor (Non-Practising)

June 2013.

Not content with cancelling the English revaluation, and persuading the Welsh and the Scots to do the same (though not the Ulstermen) Mr Pickles (Eric, not Wilfred) seems to be turning his attention to other methods of protecting revenue. Wilfred’s song was: “Have a go, Joe!” Flotsam seems to recall, and his catch phrase, spoken in a Northern accent was the order: “Give him the money, Mabel!” Doubtless, the present Mr Pickles is ”having a go” – but it is not he who will be giving the money away……….

Mind you, all governments, of whatever stripe, need to raise revenue to seek to pay for the services which the public expects to receive. There have been impacts on ratepayers, and Council Taxpayers, which will become more evident as “localism” comes into play, and as the new benefits system is gradually rolled out.

For more and more items, including rate reliefs, are to come into the local authority discretionary spend, area, and will come under pressure. Whereas, until 31st March this year, local authorities were able to recover from the pool, at least some element of the reliefs given under s44A, 47 and 49 Local Government Finance Act 1988 (as amended); now these reliefs are going to fall much more directly on the local purse. With the mandatory spend ever rising, the discretionary spend is coming under ever greater pressure. Flotsam has not heard of a successful application under s49 recently; and there is a quiet technique among some authorities of ignoring applications under s47 until the applicants go away.

But what is going to happen to s44A, now? Those in private practice are going to have to be even more persuasive than before, Flotsam suspects, in persuading billing authorities that it is in the interest of their respective communities that relief be given. It follows that that task will be even harder when it comes to the making of a second or even a subsequent application in respect of the same property.

Almost everyone is strapped for cash these days, it seems; and perhaps it behoves everyone to recognise that, on the one hand, freeholders are not all bloated plutocrats, seeking to deprive the downtrodden poor of their rightful share, while local authorities are not all vindictive Commissars of the People, out to bring down the evil capitalists.

What else has been going on? These things are not strictly within Mr Pickles’ immediate jurisdiction; but there are other things happening elsewhere in the UK which bear consideration.

There has been a major consultation exercise in Scotland, which is now closed. Remembering that a number of local taxation events have, in the past, been trialled in Scotland (like the Community Charge) it is interesting to see that the tone of the consultation questions is neutral and seems to be looking for ways in which to support business. A number of suggestions have been put forward, including removing exemption from certain municipally-owned subjects (so as to level the field between them and their business competitors in the private sector) the simplification of exemptions and reliefs generally, valuing all agricultural land and then exempting it or giving relief, and more frequent revaluations in order to obviate the perceived need for transition.

In Wales, where they did away with transition (and the Principality has not imploded as a result) they are having a look, in a current consultation, at redistributing (not reducing) charitable relief (sorry – King Charles’s head again!) so as to seek to give local traders a break against charities which, perhaps, open several outlets in one town, or which bid a commercial rent, then stock with new goods and still claim their 80%. Have a look at that consultation and submit your views which may still be welcome, even if they are a little late.

In Northern Ireland, of course, they have simply surcharged superstores with RVs of £500,000+, and are using the proceeds to subsidise smaller traders – but only until the forthcoming revaluation in, er, 2015 (no – not a misprint).

But what of the originator of the problem, the Blessed St Mary Portas, whose throwaway line that charging 100% empty rate would raise £20bn and balance Gordon Brown’s 2007 Red Book (not the RICS version)? Now she floats before us on television, trying hard (if relatively unsuccessfully) to give Mr Pickles’ grants away. In Scotland, there are those who advocate, in line with the changes to Council Tax legislation there, that protection should be afforded to those who are taking active steps to market the empty property for sale or lease. The same idea is gaining ground in England, in relation to Council Tax, using a system perhaps based on the former rating surcharge in England in the 1970’s.

Increasing rating liability on empty property has stifled growth, as it increases financial risk and has been a disincentive to developers (so say the Scots), in spite of Mr Osborne’s (as yet undetailed) scheme of temporary relief from the empty rate. The Scots suggest that empty relief for properties being actively marketed be maintained where possible.

Will St Mary repent her fiscal sins and suggest to the Big Man and Mr Osborne that England should follow Scotland, for once? She might: but will Mr Pickles respond: “Give ‘em the money, Mary”? Somehow, Flotsam doubts it.


Peter Scrafton

©J.P. Scrafton, 2013

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