Local Government Finance Act 1988

2 (1) The rateable value of a non-domestic hereditament [F1 none of which consists of domestic property and none of which is exempt from local non domestic rating] shall be taken to be an amount equal to the rent at which it is estimated the hereditament might reasonably be expected to let from year to year if the tenant undertook to pay all usual tenant’s rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command that rent.

[F2 (1A) The rateable value of a composite hereditament none of which is exempt from local non-domestic rating shall be taken to be an amount equal to the rent which, assuming such a letting of the hereditament as is required to be assumed for the purposes of sub-paragraph (1) above, would reasonably be attributable to the non-domestic use of property.

(1B) The rateable value of a non-domestic hereditament which is partially exempt from local non-domestic rating shall be taken to be an amount equal to the rent which, assuming such a letting of the hereditament as is required to be assumed for the purposes of sub-paragraph (1) above, would, as regards the part of the hereditament which is not exempt from local non-domestic rating, be reasonably attributable to the non-domestic use of property.]

(2) Where (apart from this sub-paragraph) the rateable value would include a fraction of a pound—

(a) the fraction shall be made up to one pound if it would exceed 50p, and

(b) the fraction shall be ignored if it would be 50p or less.

(3) Where the rateable value is determined for the purposes of compiling a list the day by reference to which the determination is to be made is—

(a) the day on which the list must be compiled, or

(b) such day preceding that day as may be specified by the Secretary of State by order in relation to the list.

(4) Where the rateable value is determined with a view to making an alteration to a list which has been compiled (whether or not it is still in force) the day by reference to which the determination is to be made is—

(a) the day on which the list came into force, or

(b) if a day was specified under sub-paragraph (3)(b) above in relation to the list, the day so specified.

(5) Where the rateable value is determined for the purposes of compiling a list by reference to a day specified under sub-paragraph (3)(b) above, the matters mentioned in sub-paragraph (7) below shall be taken to be as they are assumed to be on the day on which the list must be compiled.

(6) Where the rateable value is determined with a view to making an alteration to a list which has been compiled (whether or not it is still in force) the matters mentioned in sub-paragraph (7) below shall be taken to be as they are assumed to be on the [F3 material day.]

[F4 (6A) For the purposes of sub-paragraph (6) above—

(a) where the determination is occasioned by a proposal for an alteration disputing the accuracy of a previous alteration to the list, the material day is the day by reference to which the matters mentioned in sub-paragraph (7) below fell to be assessed when determining the rateable value with a view to making the disputed alteration;

(b) where the determination is occasioned by any proposal for an alteration other than one disputing the accuracy of a previous alteration to the list, the material day is the day the proposal is made;

(c) where the determination is occasioned otherwise than by a proposal for an alteration, the material day is the day the alteration is entered in the list.]

(7) The matters are—

(a) matters affecting the physical state or physical enjoyment of the hereditament,

(b) the mode or category of occupation of the hereditament,

(c) the quantity of minerals or other substances in or extracted from the hereditament,

[F5 (cc) the quantity of refuse or waste material which is brought onto and permanently deposited on the hereditament,]

(d) matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless physically manifest there, and

(e) the use or occupation of other premises situated in the locality of the hereditament.

(8) The Secretary of State may make regulations providing that, in applying the preceding provisions of this paragraph in relation to a hereditament of a prescribed [F6 class], prescribed assumptions (as to the hereditament or otherwise) are to be made.

(9) The Secretary of State may make regulations providing that in arriving at an amount under sub-paragraph (1) [F7 , (1A) or (1B)] above prescribed principles are to be applied; and the regulations may include provision for the preservation of such principles, privileges, and provisions for the making of valuations on exceptional principles, as apply or applied for the purposes of the 1967 Act.

(10) If a day is specified under sub-paragraph (3)(b) above the same specification must be made in relation to all lists to be compiled on the same day.

[F8 (11) For the purposes of sub-paragraph (8) above a class may be prescribed by reference to such factors as the Secretary of State sees fit.

(12) Without prejudice to the generality of sub-paragraph (11) above, a class may be prescribed by reference to one or more of the following factors—

(a) the physical characteristics of hereditaments;

(b) the fact that hereditaments are unoccupied or are occupied for prescribed purposes or by persons of prescribed descriptions.

(13) In this paragraph references to the non-domestic use of property are references to use otherwise than in such a manner as to constitute the property domestic property.]

Textual Amendments

F1 Words inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(3)

F2 Sch. 6 para. 2(1A)(1B) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(4)

F3 Words substituted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(5)

F4 Sch. 6 para. 2(6A) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(6)

F5 Sch. 6 para. 2(cc) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(7)

F6 Word substituted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(8)

F7 Words inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(9)

F8 Sch. 2 para. 2(11)–(13) inserted by Local Government and Housing Act 1989 (c. 42, SIF 81:1), s. 139, Sch. 5 para. 38(10)

Modifications etc. (not altering text)

C1 Sch. 6 para. 2 excluded by S.I. 1989/2472, art. 3(1) and by S.I. 1989/2474, art. 4(1)

C2 Sch. 6 para. 2(1) amended by S.I. 1989/2303, art. 3

C3 Sch. 6 para. 2(1) modified by S.I. 1989/2303, art. 4(2)(3)

C4 Sch. 6 para. 2(1)–(7) modified by S.I. 1989/2303, art. 4(1); S.I. 1989/441, art. 2.

Sch. 6 para. 2(1)-(7) modified (20. 3. 1991) by S.I. 1991/278, art.2

C5 Sch. 6 para. 2(1A)(1B) amended by S.I. 1989/2303, art. 3

C6 Sch. 6 para. 2(1A)(1B) modified by S.I. 1989/2303, art. 4(2)(3)

C7 Sch. 6 para. 2(6) modified (3. 4. 1991) by S.I. 1991/471, art. 6(2)(3)(b)(i)

C8 Sch. 6 para. 2(7) modified by S.I. 1990/582, reg. 5(2)