For over 50 years, ratepayers who occupied more than one unit of property in a building shared with other businesses and organisations were assessed for non-domestic rates (NDR) based on the following premise:
- Where their units of property were contiguous (touching), they received one rates bill.
- Where their units of property were separated by another business or an area in shared use, they received a rates bill for each unit of property.
For example, this meant:
- Where a business occupied two adjoining floors of a building or two rooms separated by a wall only, they received one rates bill.
- Where the business occupied two floors separated by another floor used by another business, or they occupied two rooms on either side of a common corridor, they received two rates bills.
In 2015, the Supreme Court ruled, in the case of Woolway (VO) v Mazars [2015] UKSC 53 (“the Mazars decision”) that the test should concern the geographical nature of the property and, as a result, the VOA has changed its practice.
Since the Supreme Court ruling, separate units of property in a shared building are treated as separate rating units and a rates bill is issued for each unit, irrespective of whether they are in the same occupation and are contiguous. As a result, some ratepayers who were previously receiving only one rates bill now receive two or more. In some cases, they have had to pay more in non-domestic rates as a result of this change, while in other cases, bills have fallen.
This consultation seeks views on the Welsh Government’s proposal to reinstate the relevant elements of the VOA’s practice prior to the ruling.
This consultation applies to Wales only, but similar changes have already been implemented by the UK Government, to reinstate the VOA’s previous practice with respect to rating in England.
Submit your comments by 1 June 2022.
For further information visit https://gov.wales/splitting-non-domestic-properties-wales-valuation-purposes