Bruntwood Aviva Limited v Lucy Formela-Osborne (Valuation Officer) [2025] UKUT 382 (LC)

[2025] UKUT 382 (LC)

Case No LC-2024-899

IN THE UPPER TRIBUNAL (LANDS CHAMBER)

AN APPEAL AGAINST A DECISION OF THE VALUATION TRIBUNAL FOR ENGLAND

Venue Royal Courts of Justice, Strand,

Between

BRUNTWOOD AVIVA LIMITEDAppellant

LUCY FORMELA-OSBORNERespondent

(VALUATION OFFICER)Respondent

London, WC2A 2LL

18 November 2025

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

RATING - effective date of an alteration to the rating list – correction of an inaccuracy by the Valuation Officer – whether rating list should be amended from 1 April 2017 or from later date – regulation 4(1) and 14(1B), Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 – appeal dismissed

Car Park Spaces, 111 to 113 at Centre City,

5-7 Hill Street,

Birmingham,

B5 4UA

Mark Higgin FRICS FIRRV

9 September 2025

Mr Admas Habteslasie, instructed by Sixteen Real Estate for appellant

Mr Cain Ormondroyd, instructed by HMRC’s solicitor’s office for respondent

The following cases are referred to in this decision:

BMC Properties and Management Ltd v Jackson (Valuation Officer)[2015] EWCA Civ 1306

R (Youngsam) v Parole Board[2020] Q.B. 387 (CA)

Introduction

[1]This is an appeal from a decision of the Valuation Tribunal for England (‘the VTE’) concerning the correct effective date from which twenty hereditaments comprising car parking spaces in Birmingham city centre should be entered in the 2017 rating list. The appellant is the rateable occupier of the parking spaces.

[2]The parking spaces were originally entered in the list from 1 April 2017 and that was confirmed as the effective date by the VTE in its decision of 4 December 2024. The appellant’s case is that the effective date should be either 24 January 2022 or alternatively 31 October 2022. The respondent says that the VTE decision was correct.

[3]It was agreed by the parties that it was not necessary for the Tribunal to inspect the hereditaments.

[4]At the hearing the appellant was represented by Mr Admas Habteslasie and the respondent by Mr Cain Ormondroyd. I am grateful to them both for their submissions.

The factual background

[5]All the parking spaces contained in the various hereditaments are in the basement of a 20 storey office building known as Centre City at 5-7 Hill Street, Birmingham, and it is unnecessary to record the precise details of each of them. The building is just to the south of Birmingham New Street Station and 200 metres west of the Bullring shopping centre.

[6]To understand the context of this appeal it is necessary to examine the timeline of events that led to the current dispute. Some of the following details are taken from a witness statement provided by Mr Haroon Bhatti MRICS of the Valuation Office (‘the VO’).

[7]The parking spaces came to the attention of the VO in October 2021 when a member of VO staff was reviewing Forms of Return for the office floors in Centre City and found rents relating to parking spaces but could not find corresponding entries in the rating list. A colleague investigated and initiated the process to create a new list entry. Information available to the VO at the time suggested that none of the parking spaces were allocated to particular occupiers and consequently on 24 January 2022 a notice was served on the appellant to bring the car park into assessment as a single hereditament at rateable value £325,000 with effect from 1 April 2017. The assessment was based on 260 parking spaces notwithstanding that the actual number of spaces was 206.

[8]On 17 April 2022 the appellant’s agent, Sixteen Real Estate, submitted a ‘Check’ seeking a division in the assessment. The ‘Check’ requested that parking spaces that were let should have an effective date of 1 April 2017 and that vacant, unlet spaces in the control of the landlord should be brought into assessment from ‘the date of schedule’ which in this case would have been 19 October 2022.

[9]The VO did not grant the request but instead made a list alteration on 19 October 2022 which replaced the existing single entry with 45 new hereditaments including 20 hereditaments comprising the unlet parking spaces. All of these new assessments were effective from 1 April 2017. The unlet spaces in the rateable occupation of the appellant landlord are the subject of this appeal.

[10]On 31 October 2022 the ‘Check’ decision notice was issued formalising the alteration of 19 October 2022. It was not until 17 May 2023 that the appellant submitted a ‘Challenge’ seeking a revision of the effective date for the unlet parking spaces to 31 October 2022.

[11]On 7 September 2023 the ‘Challenge’ decision notice was issued with the VO refusing to amend the effective date.

The statutory framework

[12]Sections 41 and 42 of the Local Government Finance Act 1988 (‘the LGFA 1988’), place a duty on the VO to compile and maintain lists for the local billing authorities. It must also take such steps, before the list is compiled, as are reasonably practicable to ensure it is accurate on 1 April (s.41(4)); and to ensure that the list contains each qualifying hereditament for each day in each chargeable financial year (s.42(1)).

[13]Regulation 4(1) of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 (‘the 2009 Regulations’) sets out the circumstances in which a proposal might be made to alter the list, as follows:

“The grounds for making a proposal are— (a) the rateable value shown in the list for a hereditament was inaccurate on the day the list was compiled; (b) the rateable value shown in the list for a hereditament is inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list was compiled; (c) the rateable value shown in the list for a hereditament is inaccurate by reason of an amendment to the classes of plant and machinery (…); (d) the rateable value shown in the list for a hereditament by reason of an alteration made by a VO is or has been inaccurate; (e) the rateable value or any other information shown in the list for a hereditament is shown, by reason of a decision in relation to another hereditament of [a tribunal/court] to be or to have been inaccurate; (f) the day from which an alteration is shown in the list as having effect is wrong; (g) a hereditament not shown in the list ought to be shown in that list; (h) a hereditament shown in the list ought not to be shown in that list; (i) the list should show that some part of a hereditament which is shown in the list is domestic property or is exempt from non-domestic rating but does not do so; (j) the list should not show that some part of a hereditament which is shown in the list is domestic property or is exempt from non-domestic rating but does so; (k) property which is shown in the list as more than one hereditament ought to be shown as one or more different hereditaments; (l) property which is shown in the list as one hereditament ought to be shown as more than one hereditament; (m) the address shown in the list for a hereditament is wrong; (n) the description shown in the list for a hereditament is wrong; and (o) any statement required to be made about the hereditament under section 42 of the Act has been omitted from the list.” (a) the rateable value shown in the list for a hereditament was inaccurate on the day the list was compiled; (b) the rateable value shown in the list for a hereditament is inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list was compiled; (c) the rateable value shown in the list for a hereditament is inaccurate by reason of an amendment to the classes of plant and machinery (…); (d) the rateable value shown in the list for a hereditament by reason of an alteration made by a VO is or has been inaccurate; (e) the rateable value or any other information shown in the list for a hereditament is shown, by reason of a decision in relation to another hereditament of [a tribunal/court] to be or to have been inaccurate; (f) the day from which an alteration is shown in the list as having effect is wrong; (g) a hereditament not shown in the list ought to be shown in that list; (h) a hereditament shown in the list ought not to be shown in that list; (i) the list should show that some part of a hereditament which is shown in the list is domestic property or is exempt from non-domestic rating but does not do so; (j) the list should not show that some part of a hereditament which is shown in the list is domestic property or is exempt from non-domestic rating but does so; (k) property which is shown in the list as more than one hereditament ought to be shown as one or more different hereditaments; (l) property which is shown in the list as one hereditament ought to be shown as more than one hereditament; (m) the address shown in the list for a hereditament is wrong; (n) the description shown in the list for a hereditament is wrong; and (o) any statement required to be made about the hereditament under section 42 of the Act has been omitted from the list.”

[14]Regulation 14 makes provision in relation to the effective date of alterations and provides, so far as is relevant for present purposes, as follows:

“14. — Time from which alteration is to have effect: 2005 and subsequent lists (1) This regulation has effect in relation to alterations made on or after 1st October 2009 to a list compiled on or after 1st April 2005. (1A) Paragraphs (2), (2A), (2B) and (6) do not apply in relation to a list compiled on or after 1st April 2017. (…) (1B) Subject to paragraphs (3) to (7), for a list compiled on or after 1st April 2017, where an alteration is made to correct any inaccuracy in the list on or after the day on which it is compiled, the alteration shall have effect from the day on which the circumstances giving rise to the alteration first occurred. (..) (5) Where the day on which the relevant circumstances arose is not reasonably ascertainable— (a) where the alteration is made to give effect to a proposal, the alteration shall have effect from the day on which the proposal was served on the VO; and (b) in any other case, the alteration shall have effect from the day on which it is made. (…) (7) An alteration made to correct an inaccuracy (other than one which has arisen by reason of an error or default on the part of a ratepayer)— (a) in the list on the day it was compiled; or (b) which arose in the course of making a previous alteration in connection with a matter mentioned in any of paragraphs (2) to (5), which increases the rateable value shown in the list for the hereditament to which the inaccuracy relates, shall have effect from the day on which the alteration is made. (…)” (a) where the alteration is made to give effect to a proposal, the alteration shall have effect from the day on which the proposal was served on the VO; and (b) in any other case, the alteration shall have effect from the day on which it is made. (a) in the list on the day it was compiled; or (b) which arose in the course of making a previous alteration in connection with a matter mentioned in any of paragraphs (2) to (5), which increases the rateable value shown in the list for the hereditament to which the inaccuracy relates, shall have effect from the day on which the alteration is made. (…)”

[15]This dispute is about the meaning of the expression “circumstances giving rise to the alteration” in regulation 14(1B), in the context of the alteration to the list made by the VO on 19 October 2022.

The parties’ respective submissions

[16]For the appellant, Mr Habteslasie submitted that the ‘circumstances’ referred to in regulation 14(1B) were the presence of a single hereditament where there should have been multiple hereditaments. The circumstances first occurred on 24 January 2022, when the car park was entered in the list as a single hereditament, so that should be the effective date. Alternatively, the effective date should be 31 October 2022 because that was the date when the list was actually altered.

[17]Mr Habteslasie further submitted that the Court of Appeal had considered the meaning of “circumstances giving rise to the alteration” in BMC Properties and Management Ltd v Jackson (Valuation Officer)

[2015] EWCA Civ 1306

. In that case the VO had unilaterally altered the list on 22 March 2011 to enter a new hereditament with an effective date of 1 April 2005. The property had been the subject of a conversion from domestic to non-domestic use for holiday letting by, at the latest, 16 December 1989.

[18]In BMC Properties the appellant had argued that the circumstances which were relevant as giving rise to the alteration “must in their context be a reference to the underlying circumstances rather than the state of the list”. It was the commencement of the use of the property for holiday letting was the change of circumstances which created the inaccuracy in the list. Patten LJ rejected this argument:

[40][…] Regulation 14(2) which has continued without material amendment in the 2009 Regulations is obviously drafted in order to encompass both initial inaccuracies in the list due (e.g.) to the omission of a rateable hereditament and subsequent changes of circumstances which render the list inaccurate. The list of circumstances which may give rise to an alteration of the list are set out comprehensively in regulation 4: see [9] above. They include such matters as the omission of a hereditament from the list (regulation 4(1)(g)) which could occur either at the date of compilation or subsequently.

[41]Regulation 14(2) specifies a default rule in relation to the effective date of any alteration in the list “made to correct any inaccuracy in the list on or after the day it is compiled”. The alteration takes effect “from the day on which the circumstances giving rise to the alteration first occurred”. Looked at against the background of the earlier regulations, it seems to me that the day on which those circumstances first occurred must be a reference both to inaccuracies in the list on the day of compilation and ones which arise subsequently. That much is apparent from the opening words of regulation 14(2). It therefore includes what were originally regulation 13(2) and 13(5) circumstances as well as the inaccuracies in the list dealt with previously by regulations 13(7) and (8) to which the “not reasonably ascertainable” provisions contained in regulation 13(6) had no application. It follows that I do not accept that “circumstances” in regulation 14(2) has only a single meaning, namely the underlying change of circumstances which leads to the inaccuracy in the list. It also includes the former content of regulations 13(7) and (8): i.e. a subsisting inaccuracy in the list. Aside from anything else, that is what regulation 14(2) says.”

[19]Mr Habteslasie explained that the appellant’s case is based on and is consistent with the decision in BMC Properties and that the circumstances that generated the two alterations of 22 January 2022 and 31 October 2022 were different.The circumstances giving rise to the alteration of 22 January 2022 were that a hereditament that should have been shown in the list was not. The car park was not constructed on 1 April 2017. The date of construction was the date on which those circumstances giving rise to the first alteration arose.

[20]The circumstances giving rise to the second alteration of 31 October 2022 were that a hereditament shown in the list should have been shown as more than one hereditament. Those circumstances could only have been present once the single hereditament was already shown in the list. Those circumstances first arose on 24 January 2022, when the car park was entered in the list as a single hereditament. The circumstances giving rise to the second alteration were those described in regulation 4(1)(d), having arisen because an alteration made by the VO had been inaccurate.

[21]Mr Habteslasie submitted that Patten LJ’s reasoning in paragraph 40 of BMC Properties was a necessary step in dismissing the appeal and consequently part of the ratio of the decision (reasons for the decision which create binding precedent and must therefore be followed by inferior courts) and he referred to R (Youngsam) v Parole Board [2020] Q.B. 387 (CA), at [48] to [51] in support of that proposition.

[22]Mr Habteslasie also asserted that both the VO’s position and the VTE’s analysis were inconsistent with BMC Properties and the 2009 Regulations. Both the VO and the VTE concluded that the circumstances giving rise to the first and second list alterations were one and the same. In other words, the VO substituted the words “the underlying cause of the inaccuracy in the list” for “circumstances giving rise to the alteration”. Unlike the statutory language, the VO’s argument did not focus on the specific alteration that is made to the list. He noted that this position is very similar to the argument rejected by the Court of Appeal in BMC Properties. He concluded that the correct analysis is that any circumstances giving rise to the second alteration could not occur until the single hereditament came into existence.

[23]Finally, Mr Habteslasie said that the VO was seeking to expand its power to retrospectively alter the list to include situations where an earlier alteration made unilaterally by the VO was deficient and made the list inaccurate. On the appellant’s case, the statutory scheme protects against such unfairness and provides an incentive for the VO to ensure its alterations have the effect of maintaining an accurate list.

[24]For the VO, Mr Ormondroyd submitted that had the list been altered for the first time in 2022 to show the missing unlet parking spaces, it would be beyond argument that they should be shown in the list from 1 April 2017 and this was the decision, on substantially identical wording, in BMC Properties.

[25]Mr Ormondroyd said that the appellant’s reading of the 2009 Regulations was wrong for the following reasons. Firstly, regulation 14(1B) simply refers to “the circumstances giving rise to the alteration”. The relevant ‘circumstances’ are that parking spaces existed, were in the control of the appellant, and were not shown in the list. Those circumstances first occurred before 1 April 2017. The alteration should therefore have effect from that date, the first possible in the 2017 list. It represented in substance the correction of a compiled list error. He asserted that at the very least, the wording is broad enough to allow such a reading. Further, there is no need to focus forensically on the wording of one of the grounds for making a proposal in reg 4(1), as the appellant does.

[26]Secondly, the appellant’s case is contrary to the purpose of the legislation which is intended to facilitate the maintenance of an accurate list, and to achieve procedural fairness between the taxing authority and ratepayers. It also facilitates fairness as between one ratepayer and another. Mr Ormondroyd said that the appellant’s approach would perpetuate an error, namely that the parking spaces would be absent from the list. Consequently, ratepayers would receive different treatment depending on whether their hereditament was brought into the list in one or two steps. He concluded that a purposive reading of the legislation was against the appellant’s construction.

[27]Thirdly, Mr Ormondroyd submitted that the appellant’s position is not supported by BMC Properties. The Court of Appeal was presented with the argument that the predecessor to regulation 14(1B) could only refer to a “change of use or other event” affecting a hereditament. The consequence, it was argued, was that an acknowledged error in the 2005 list could not be corrected because it was not known exactly when the “change of use or other event” underlying the list alteration had taken place. Unsurprisingly, the Court of Appeal rejected this argument. In doing so, it held that the provision was “obviously drafted in order to encompass both initial inaccuracies in the list, due for instance, to the omission of a rateable hereditament and subsequent changes of circumstances which render the list inaccurate”. Mr Ormondroyd concluded that there was nothing in that reasoning which supported the appellant’s case.

[28]He also commented on the Court of Appeal’s reference in paragraph 40 of BMC Properties to the “list of circumstances which may give rise to an alteration of the list are set out comprehensively in regulation 4”. He considered this to be correct, in general terms, but suggested that it does not dictate the artificial and prescriptive approach to the identification of the relevant ‘circumstances’ that the appellant sought to apply.

Discussion

[29]It seems to me that any analysis of the 2009 Regulations must begin with an examination of their purpose. It is inevitable that during the currency of a list inaccuracies will occur as circumstances change or errors are made. That is the normal course of events. The 2009 Regulations facilitate changes initiated by interested parties but also provide the means by which the VO can maintain an accurate rating list. The grounds on which a proposal can be made in regulation 4(1) and the VO’s powers of alteration in regulation 14 are both intended to facilitate the maintenance of an accurate list.

[30]As Mr Habteslasie rightly pointed out, the VO is under a duty to compile and maintain an accurate rating list. This duty requires the VO to react to changes that occur; it does not require the VO to make pre-emptive alterations to the rating list before circumstances giving rise to the need for a change have occurred. Consequently, the 2009 Regulations must facilitate retrospective change. In my judgement that is the purpose of regulation 14(1B), which allows the VO to change the rating list to take account of changes that have occurred since it was compiled. It follows that the alteration will have effect from the day on which those circumstances first occurred. Alteration is defined in the regulation 3 (Interpretation of Part 2) as follows: (1) In this Part— “alteration” means alteration of a list in relation to a particular hereditament, and “alter” shall be construed accordingly; Mr Habteslasie placed significant emphasis on ‘particular hereditament’, interpreting it, in the context of this case, as relating to the first incorrect hereditament. But every alteration necessarily relates to a hereditament, and the regulations are silent on the meaning of ‘particular’. In BMC Properties (at paragraph 40) Patten LJ set out the list of circumstances that could give rise to an alteration and these included “such matters as the omission of a hereditament from the list (regulation 4(1)(g)) which could occur either at the date of compilation or subsequently.” [see paragraph 18 above]

[31]However, what the regulations do not say is that if the VO makes an error, he or she cannot correct it to give effect to an entry or entries that should have been in the list from the appropriate date, namely the date when the circumstances first occurred. If that were the purpose of the Regulations it would compromise the duty accurately to maintain the rating list. I therefore agree with Mr Ormondroyd that ‘the day on which the circumstances giving rise to the alteration first occurred.’ should be read as referring to the circumstances relating to the first alteration, namely the existence of the parking spaces by 1 April 2017 which should have led to them being shown in the rating list from that date. Regulations 4 and 14 are not cross referenced to one another and Mr Habteslasie’s reliance on defining circumstances in this case as relating to regulation 4(1)(d) is in my view misconceived. As Mr Habteslasie himself submitted, referencing paragraph 41 of BMC Properties, ‘circumstances’ can include both underlying changes of circumstances leading to an inaccuracy and a subsisting inaccuracy in the list.

[32]I note that in this case the VO altered the list twice in her attempts to arrive at accurate entries and the circumstances of the list maintenance are different to those in BMC Properties, which creates no binding principle of law which applies in this case.

[33]I observe that regulation 14 (7) has the effect that it is only when the VO makes an alteration to correct an inaccuracy which arose in the course of making a previous alteration, which increased the rateable value shown in the list for the hereditament to which the inaccuracy related, that the revised assessment has effect from the day on which the alteration is made. In other words, if the VO decides to increase an assessment having already made an alteration, the effective date will be the date of the alteration giving effect to the increase. The Regulations do not say that this back dating limitation applies to any other circumstances such as the insertion in the list of a several new hereditaments where only one existed before, notwithstanding that such drafting could have easily been incorporated had that been the intention. I therefore conclude that the purpose of regulation 14(1B) is not to fetter the ability of VO to act retrospectively in the way submitted by Mr Habteslasie.

[34]I also observe that the way that the VO alters the rating list could have a bearing on his or her ability to back date an alteration. If the original assessment is deleted it ceases to exist and the process of bringing new, replacement hereditaments into the list starts from scratch. In such cases the VO must take into account the actual circumstances at the date from which the new assessments are to take effect. In this case the original single assessment was deleted and replaced.

[35]For these reasons the appeal is dismissed. Mark Higgin FRICS FIRRV 18November 2025 Right of appeal