Jonathan Doyle & Ors v Richie Roberts

A property may be a chargeable dwelling for council tax even where it has no business element. Section 3(2) of the Local Government Finance Act 1992 first adopts the broad concept of a hereditament derived from the General Rate Act 1967. It then excludes hereditaments entered, or required to be entered, in non-domestic rating lists and hereditaments exempt from non-domestic rates. Domestic property used wholly as living accommodation therefore falls within council tax unless excluded by those provisions. The concept of hereditament is not confined to non-domestic or business property. Composite hereditaments may attract both non-domestic rates and council tax by reference to their separate uses.

The appellants owned properties in Liverpool and Leigh which they accepted were domestic property used wholly for living accommodation. They applied for deletion of the properties from the council tax list, arguing that a dwelling under section 3(2) of the Local Government Finance Act 1992 must contain a business element. The listing officer rejected the applications, and the Valuation Tribunal dismissed their appeals. The appeals to the High Court were brought on a question of law under regulation 43(1) of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009. The central issue was whether the statutory concept of dwelling excludes an ordinary privately occupied house or flat lacking any business use.

1. Appeals dismissed. The Valuation Tribunal had applied section 3(2) of the Local Government Finance Act 1992 correctly. The appellants’ properties were hereditaments, were not required to be entered in a non-domestic rating list and were not exempt from non-domestic rating.
2. The reference in section 3(2)(a) to a hereditament adopted the broad concept in section 115(1) of the General Rate Act 1967: a unit of property capable in principle of being liable to a rate and being shown in a valuation list. That concept was not confined to business property. An ordinary privately owned house or flat used for living accommodation could be a hereditament.
3. Schedule 13 to the General Rate Act 1967 dealt with special or marginal cases concerning dwelling-houses. It was not an exhaustive definition excluding conventional dwelling-houses. Nor did the hypothetical rent provisions show that rating was concerned only with privately rented property.
4. The appellants’ reliance on the non-domestic rating provisions of the Local Government Finance Act 1988 was misplaced. “Relevant non-domestic hereditament” was a sub-category of hereditament, not a narrower definition of hereditament itself. Section 3(2)(b) and (c) removed non-domestic hereditaments attracting, or exempt from, non-domestic rates from the broad class initially brought within section 3(2)(a).
5. The result was consistent with the statutory scheme and avoided the arbitrary consequence that a rented property would attract council tax while an equivalent owner-occupied property would not. Council tax applied to a house or flat used wholly as living accommodation, whether or not there was a business element. Where part of a property was used for non-domestic purposes, the composite-hereditament provisions applied.
6. The respondent was awarded costs, summarily assessed at £8,000, payable jointly and severally by the appellants.

1. Valuation Tribunal for England: appeals against refusal to delete the properties from the council tax list were dismissed.
2. High Court (Queen's Bench Division): appeals on a question of law were dismissed. The Tribunal’s approach to “dwelling” under section 3 of the Local Government Finance Act 1992 was upheld.