Rates are a
tax on property in the
United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...
used to fund local government. Business rates are collected throughout the United Kingdom. Domestic rates are collected in Northern Ireland and were collected in England and Wales before 1990 and in Scotland before 1989.
Domestic rates
England and Wales
Rates formally became universal by the
Act for the Relief of the Poor 1601; this removed all doubt that parishes (
vestries
A vestry was a committee for the local secular and ecclesiastical government for a parish in England, Wales and some English colonies which originally met in the vestry or sacristy of the parish church, and consequently became known colloquially ...
) should and could levy a
poor rate
In England and Wales the poor rate was a tax on property levied in each parish, which was used to provide poor relief. It was collected under both the Old Poor Law and the New Poor Law. It was absorbed into 'general rate' local taxation in the ...
to fund the
Poor Law
In English and British history, poor relief refers to government and ecclesiastical action to relieve poverty. Over the centuries, various authorities have needed to decide whose poverty deserves relief and also who should bear the cost of hel ...
. They often levied these earlier to fund poor law relief. Indeed, the
Court of Appeal
A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...
in 2001 said "The law of rating is statutory and ancient, going back even before the Poor Relief Act 1601".
As local government developed, separate rates were collected by parish authorities, borough corporations and county authorities. The
County Rates Act 1739 ended the practice of separate rates being levied for individual purposes, such a highway rate and provided for a unified
county rate
Rates are a type of property tax system in the United Kingdom, and in places with systems deriving from the British one, the proceeds of which are used to fund local government. Some other countries have taxes with a more or less comparable role ...
.
Rates on residential property were based on the nominal rental value, reassessed periodically in revaluations. By the
Rating and Valuation Act 1925
A rating is an evaluation or assessment of something, in terms of quality, quantity, or some combination of both.
Rating or ratings may also refer to:
Business and economics
* Credit rating, estimating the credit worthiness of an individual, c ...
, revaluations were supposed to take place every five years but in practice they were frequently delayed or suspended. Revaluations took place in 1928/1929, 1934, 1956 (but based on 1939 values), 1963, and 1973. A revaluation due in the early 1980s was scrapped by the Secretary of State for the Environment
Michael Heseltine
Michael Ray Dibdin Heseltine, Baron Heseltine, (; born 21 March 1933) is a British politician and businessman. Having begun his career as a property developer, he became one of the founders of the publishing house Haymarket. Heseltine served a ...
in June 1979, with Heseltine urging householders to tear up the forms already sent out by the Valuation Office.
Rates in
England and Wales
England and Wales () is one of the three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. The substantive law of the jurisdiction is Eng ...
in 1990 were briefly replaced with the
Community Charge
The Community Charge, commonly known as the poll tax, was a system of taxation introduced by Margaret Thatcher's government in replacement of domestic rates in Scotland from 1989, prior to its introduction in England and Wales from 1990. It pr ...
(so called "poll tax"), a fixed
tax per head
A poll tax, also known as head tax or capitation, is a tax levied as a fixed sum on every liable individual (typically every adult), without reference to income or resources.
Head taxes were important sources of revenue for many governments fr ...
that was the same for everyone within a council area, a figure that could differ greatly per local authority. This was soon replaced with the
Council Tax
Council Tax is a local taxation system used in England, Scotland and Wales. It is a tax on domestic property, which was introduced in 1993 by the Local Government Finance Act 1992, replacing the short-lived Community Charge
The Community C ...
, a system based on the estimated market value of property assessed in bands of value, with a discount for people living alone.
Northern Ireland
Domestic rates are the current local government taxation in
Northern Ireland
Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...
. Domestic rates consist of two components, the Regional rate set by the
Northern Ireland Assembly
sco-ulster, Norlin Airlan Assemblie
, legislature = 7th Northern Ireland Assembly, Seventh Assembly
, coa_pic = File:NI_Assembly.svg
, coa_res = 250px
, house_type = Unicameralism, Unicameral
, hou ...
and the District rate set by
11 district councils. Rate levels are set annually. The domestic rates are based on the capital value of the residential property on 1 January 2005. Valuation and rating of property is handled by
Land and Property Services
The Land and Property Services (LPS, ga, Seirbhísí Talún & Maoine) is an agency of the Department of Finance of the Northern Ireland Executive. The agency, created in 2008, includes the Ordnance Survey of Northern Ireland
{{Unreferenced, dat ...
. Domestic rates are now unique to Northern Ireland within the United Kingdom.
Scotland
As in England, the individual domestic rates bill was calculated by multiplying the rateable valuation of a property by the domestic poundage rate set by the local Council. Before the
1996 reform of local government, domestic rates were set by Regional Councils, and prior to the
1975 reorganisation, rates were set by County Councils.
The rateable value of domestic properties was recorded in
valuation roll
Valuation may refer to:
Economics
*Valuation (finance), the determination of the economic value of an asset or liability
**Real estate appraisal, sometimes called ''property valuation'' (especially in British English), the appraisal of land or bui ...
s, which provide an important historical source, as they record the name of the head of the household for every home in Scotland on set years; usually at five yearly intervals. All transfers of property ownership in Scotland are recorded in the
Register of Sasines
, type = Non-ministerial government department
, seal =
, logo = Registers of Scotland logo.svg
, logo_width =
, logo_caption =
, formed =
, jurisdiction = Scotland
, headquarters = Meadowbank House, 153 London Road, Edinburgh EH8 7A ...
or the
Scottish Land Registry.
Domestic rates were a more stable income source for local government as they are based entirely on property values which provide greater financial certainty to councils - reducing their cost of borrowing. Evasion of domestic rates was also more difficult in Scotland than in England as property ownership in Scotland can be more easily proven as Scots' Law has required public registration for a transfer of property to be effective since 1694, whereas
HM Land Registry
His Majesty's Land Registry is a non-ministerial department of His Majesty's Government, created in 1862 to register the ownership of land and property in England and Wales. It reports to the Department for Business, Energy and Industrial Strategy ...
is incomplete and a compulsory public declaration is a more recent requirement. Council Tax is slightly easier to evade than domestic rates as liability for Council Tax falls on the occupants rather than the property owner - the UK does not have a complete
identity register therefore Councils must rely on other forms of identification - such as the
electoral roll
An electoral roll (variously called an electoral register, voters roll, poll book or other description) is a compilation that lists persons who are entitled to vote for particular elections in a particular jurisdiction. The list is usually broke ...
to identify, locate and pursue Council Tax evaders.
Rates were abolished in Scotland in 1989 and replaced with the
Community Charge
The Community Charge, commonly known as the poll tax, was a system of taxation introduced by Margaret Thatcher's government in replacement of domestic rates in Scotland from 1989, prior to its introduction in England and Wales from 1990. It pr ...
which was in turn replaced by the
Council Tax
Council Tax is a local taxation system used in England, Scotland and Wales. It is a tax on domestic property, which was introduced in 1993 by the Local Government Finance Act 1992, replacing the short-lived Community Charge
The Community C ...
as in England and Wales. Since devolution, there have been attempts to replace Council Tax in Scotland with a
Local income tax
Several political parties have advocated a local income tax in Scotland as an alternative to the Council Tax, as part of funding for local authorities. Various proposals were promoted during the 2007 Scottish Parliament election, 2007 general elect ...
and a
Land Value Tax
A land value tax (LVT) is a levy on the value of land (economics), land without regard to buildings, personal property and other land improvement, improvements. It is also known as a location value tax, a point valuation tax, a site valuation ta ...
.
Business rates
Rates on non-residential property (
business rates
Rates are a tax on property in the United Kingdom used to fund local government. Business rates are collected throughout the United Kingdom. Domestic rates are collected in Northern Ireland and were collected in England and Wales before 1990 and i ...
) are still charged, at a uniform rate set by central government. Rates are collected by local councils, and were, until recently distributed nationally. Each local authority now keeps the money they collect meaning that some local authorities collect a disproportionate amount when compared to number of residents.
Rating assessments (rateable values) are made on all non-domestic properties. As well as business, this includes
village hall
A village hall is a public building in a village used for various things such as:
United Kingdom
In the United Kingdom, a village hall is usually a building which contains at least one large room (plus kitchen and toilets), is owned by a local ...
s and other non-business occupations. The exception to this is where a hereditament is exempt by virtue of Schedule 6 of the
Local Government Finance Act 1988
The Local Government Finance Act 1988 introduced significant reforms to local taxation in the United Kingdom (except Northern Ireland). The old systems of rates were replaced by the Community Charge (for individuals) and business rates (for bus ...
which specifies exempt classes.
The rateable value should represent the reasonable rental value of the occupation according to the circumstances at the "Material Day" and according to rental values at the "Antecedent Valuation Date". (For the compiled 2005 Rating List the "Material Day" is 1 April 2005 and the "Antecedent Valuation Date" is 1 April 2003).
Later physical changes will have a later Material Day but the Antecedent Valuation Date will still be 1 April 2003 for the currency of the 2005 Rating List. The Rating List is a public document.
Other rates
Taxes raised for other purposes are also called rates in the United Kingdom.
*In some parts a drainage rate must be charged to fund drainage work which protects these low-lying and erosion-subjected parts from flooding. The first
Act of Parliament
Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the Legislature, legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of ...
to authorise the collection of drainage rates was the
Statute of Sewers
The Statute of Sewers (23 Hen 8 c. 5) was a 1531 law enacted by the English Reformation Parliament of King Henry VIII. It sought to make the powers of various commissions of sewers permanent, whereas previously, each parliament had to renew their ...
, passed by
King Henry VIII
Henry VIII (28 June 149128 January 1547) was King of England from 22 April 1509 until his death in 1547. Henry is best known for his six marriages, and for his efforts to have his first marriage (to Catherine of Aragon) annulled. His disag ...
in 1531, which established a chronologically ordered principle of ''no benefit, no rates''. This hampered the work of drainage authorities for four centuries – as to intended/inceptive work they could only charge permanent occupiers voluntarily receiving direct benefit, or face valid legal objection. Overturned by the
Land Drainage Act 1930
The Land Drainage Act 1930 was an Act of Parliament passed by the United Kingdom Government which provided a new set of administrative structures to ensure that drainage of low-lying land could be managed effectively. It followed the proposals of ...
, repealing 20 Acts from 1531 to the Land Drainage Act 1929, the setup became
catchment board
River boards were authorities who controlled land drainage, fisheries and river pollution and had other functions relating to rivers, streams and inland waters in England and Wales between 1950 and 1965.
Background
Prior to the 1930s, land drainag ...
s, to cover a whole river basin. These charge drainage rates to people anywhere in them. As to farming, rates apply to all occupiers of agricultural land and buildings within a drainage district. This saw reiteration and other laws made, in the
Land Drainage Act 1991
Land, also known as dry land, ground, or earth, is the solid terrestrial surface of the planet Earth that is not submerged by the ocean or other bodies of water. It makes up 29% of Earth's surface and includes the continents and various isla ...
.
*The
Crown Estate Paving Commission
The Crown Estate Paving Commission (CEPC) is the body responsible for managing certain aspects of the built environment around Regent's Park, London. levies
local statutory rates on paving by residential property it covers around
Regent's Park
Regent's Park (officially The Regent's Park) is one of the Royal Parks of London. It occupies of high ground in north-west Inner London, administratively split between the City of Westminster and the Borough of Camden (and historically betwee ...
,
London
London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...
, under the
Crown Estate Paving Act 1851
A crown is a traditional form of head adornment, or hat, worn by monarchs as a symbol of their power and dignity. A crown is often, by extension, a symbol of the monarch's government or items endorsed by it. The word itself is used, partic ...
.
*Leasehold properties rest on the terms of the lease, with little regulation of their terms, but the possibility of revision (variation or rectification) by negotiation or representation. In lease draftsmanship the terms "estate charge" and "service charge" dominate.
*Rates can attach to freeholds by express original covenant on the title such as for the optional promenade use in ''
Halsall v Brizell
''Halsall v Brizell'' 957Ch 169 is an English land law case, concerning the enforceability of a positive covenant, that is required positive obligations, in this case the obligation to pay money for upkeep and repair.
Facts
Homebuyers on a Live ...
'', or communal garden use in
garden squares
A garden is a planned space, usually outdoors, set aside for the cultivation, display, and enjoyment of plants and other forms of nature. The single feature identifying even the wildest wild garden is ''control''. The garden can incorporate both ...
. The case was approved by ''
Rhone v Stephens
is an English land law case, at the court of final appeal level, concerning the succession to the burden of positive covenants in freehold land within which it is of relatively broad application. It is distinguished in cases of regular payment ...
'', but narrowed.
Lord Templeman
Sydney William Templeman, Baron Templeman, MBE, PC (3 March 1920 – 4 June 2014) was a British judge. He served as a Lord of Appeal in Ordinary from 1982 to 1995.
Early life and career
Templeman was born on 3 March 1920, the son of Herbert W ...
said the following.
994
Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...
UKHL 3, 994
Year 994 ( CMXCIV) was a common year starting on Monday (link will display the full calendar) of the Julian calendar.
Events
By place
Byzantine Empire
* September 15 – Battle of the Orontes: Fatimid forces, under Turkish gener ...
2 AC 310
:
:Thus someone with property above or below a freehold (for example) may struggle to oblige that freehold's owner to carry out their moral obligations, without a prior
deed of rentcharge or enduring chain of
deed of covenants, due to the high value placed on
privity of contract
The doctrine of privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon any person who is not a party to the contract.
The premise is that only parties to contracts should be ab ...
and
privity of estate Privity of estate is a mutual or successive legal relationship to the same right in real property, such as the relationship between a landlord and tenant. Thus, privity of estate refers to the legal relationship that two parties bear when their esta ...
as these together benefit otherwise burdened freeholds.
References
{{Rates in the United Kingdom
Local government in the United Kingdom