The scope of this Practice Note is solely to ensure a consistent valuation approach for this property Class/Sub Class/Type for Non-Domestic Revaluation 2023 and subsequent entry in the new Valuation List which becomes effective on 1 April 2023.
The basis of valuation for new entries in the Valuation List, and Rating Revision cases after 1 April 2023, is Schedule 12 (2)(1) of the Rates (NI) Order 1977.
This Practice Note refers to property classified as:
Sub Class: Concessionary Right
Type: Kiosk, Appurtenant Rights, Street Vending
This Practice Note covers any occupation/retail activities, appurtenant rights or street vending rights that can be defined as a hereditament (excluding standard shop units). The majority of these are found on shopping centre malls and public places. Typical examples include kiosks, photo booths, promotional stands, vending stalls, barrows and carts, kids’ rides, prize machines, taxi phones, vending machines, chip vans, flower stalls, coffee vans and souvenir stalls. Note this list is not exhaustive.
Schedule 12 Part 1 Paragraph 1 of the Rates (NI) Order 1977 applies.
“Subject to the provisions of this Schedule, for the purposes of this Order the Net Annual Value of a hereditament shall be the rent for which, one year with another, the hereditament might, in its actual state, be reasonably expected to let from year to year, the probable average annual costs of repairs, insurance and other expenses (if any) necessary to maintain the hereditament in its actual state, and all rates, taxes or public charges (if any), being paid by the tenant
Valuation approach for 2023
The Comparative method is to be retained as the approach for this type of hereditament.
Research by the Practice Note author concluded that there was sufficient rental evidence available to develop a comparative approach.
This will include premises that may or may not have a fixed structure but do have a demised area. These are generally held on a lease or licence. The lease/licence will detail the name of the tenant and the landlord which will enable identification of the rateable occupier and will outline the hereditament and the rent passing. The demised area and passing rent is analysed to produce a £/m² and compared to similar hereditaments to assess a fair Net Annual Value (NAV). The demised area is as defined in the lease. The basis of valuation adopted will be the Comparative Method.
There may not be a defined area of occupation or a straightforward annual rent; instead there may be a right to occupy a pitch or pitches, eg on shopping centre malls for an annual fee. The location of this pitch and the number of pitches may vary throughout the year. This will be at Centre Management/Licensor’s discretion.
The valuation approach will depend on who is identified as the rateable occupier. Some may have a licence conferring a right to trade. The licence and the right to trade from one year to another, confers a degree of permanence. In this case the operator is deemed to be the rateable occupier and the method of valuation is the comparative method based on the actual rent/licence fee passing.
Various temporary promotions may appear in shopping centre malls seasonally, or for short periods of time. As a definable unit of assessment is difficult to establish, these promotions are considered too transient and therefore not rateable in their own right. However, that is not to say that a hereditament does not exist in the occupation of Centre Management who derives an income from the activity and exercises control over the centre in which they are situated; it is the appurtenant right that is rateable. In this case, Centre Management will be identified as the rateable occupier. The approach for these is to value them collectively determining the value to Centre Management through the Receipts & Expenditure method.
Street Vending Rights
There is mention of street vending rights in Reval2023 Practice Notes for Markets (excluding livestock) and Rights & Tolls (market). Street Vending Rights appear to have a greater affinity to the Concessionary Rights Practice Note. They are therefore valued under this Practice Note.
The current tone for Street Vending Rights is based on the licence fee as at AVD charged to each trader.
Having arrived at an initial valuation it will be necessary to stand back and take an overview of the assessment to ensure relativity with other comparable premises.
Rent and Lease Questionnaire
For this class of property RALQs were issued centrally by LPS and analysed by the Practice Note author.
For advice on any aspect of this Practice Note contact LPS on 0300 200 7801.
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