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Upper Tribunal Business Rates Ruling Marks High Street's Sad Decline

Britain's high streets have changed immeasurably in recent decades and many once proud buildings are no longer attractive to retailers. An Upper Tribunal (UT) ruling in the context of a business rates dispute reflected that sad history of decline.

The case concerned a substantial four-storey building located in the high street of a market town. It was formerly occupied by a major supermarket chain but that tenant, together with many other large retailers, had relocated to an out-of-town shopping park. The building's top two storeys were in a state of disrepair and the dispute only concerned the property that comprised its ground-floor retail space and storage basement.

At the behest of the property's freeholder, the Valuation Tribunal for England had reduced its listed rateable value from £92,000 to £57,000, thereby also reducing business rates payable on the property commensurately. The freeholder, however, appealed to the UT on the basis that there was very little, if any, demand from mainstream tenants for large town-centre retail properties.

The freeholder asserted that the property had a negative rental value and that it should be entered in the rating list at a nominal value of £1. After considering the building's recent rental history, expert evidence and rents paid by tenants of a few comparable properties, the UT found that the property had a rateable value of £17,750, the equivalent of £11 per square metre.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.