Exemption From Rates – Case Update
In the recent case of R (on the application of Secretary of State for Health and Social Care on behalf of Public Health England) v Harlow District Council, Mr Justice Kerr considered the question of what constitutes occupation of premises for non-domestic rating purposes. The Court considered the question of whether a party can benefit from the exemption by occupying and then vacating the property at a time of its choice.
The claimant (PHE) challenged the defendant’s (Harlow’s) decision refusing to recognise PHE’s claim to a three month exemption from payment of unoccupied non-domestic rates following a period of claimed occupation by PHE of its premises in Harlow which are its future national headquarters.
In determining the case, the Judge produced two annexes to his judgment. The first, Annex A, sets out a checklist of what he believes are the correct propositions to determine cases of this kind. The second, Annex B, sets out a suggested protocol for swift and efficient determination of such disputes, in a manner that should save time and costs, reduce unnecessary controversy and avoid the need to bring disputes of this kind frequently to the higher courts. If it is not followed, the parties resistant to it could find district judges or other courts disposed to impose costs sanctions against them.
Annex A and Annex B can be found in full here.
Mr Justice Kerr rejected the proposition that no benefit accrues to a possessor motivated by the prospect of rates exemption, until the occupation has ceased. Actual use of the property, even minimal use as in this case, combined with an intention to occupy it is sufficient for occupation, whether the motive is rates mitigation or any other motive. The use need not be substantial, as the earlier cases show. It need not be legally required. It may be whimsical or eccentric. It must serve a purpose of the occupier but that purpose can be obtaining a future rates exemption. This is subject to the two caveats established by earlier cases. The first is that the purpose must go beyond upkeep and development of the property itself and the second is that occupation is not established by leaving abandoned goods there which are not worth the trouble of removing. Read the full judgment here.