On-street parking and rates

Parking meter iStock 000012484950XSmall 146x219Poonam Pattni considers a recent decision of the Valuations Tribunal, in which the local authority successfully challenged an entry of on-street highway parking on the Rating List.

Does on-street parking on land vested in the highway authority under section 263 of the Highways Act 1980 give rise to a liability to non-domestic rates?

In Dorset County Council v Mr J. Reeves (Valuation Officer) (Re: Car Park, The Quay, Wareham Dorset BH20 4LP) Appeal Number: 122522348090/541N10, 23 December 2014, the Valuation Tribunal considered the implications of this question given the prevalence of on-street parking provided by local authorities.

The Law

The Local Government Finance Act 1988 renders a ratepayer liable to non-domestic rates if they are in occupation of a hereditament which is shown on a local non-domestic rating list in force for the chargeable year.

No single statute has adequately defined ‘hereditament’ and it has developed through rating case law alongside the concept of ‘rateable occupation’. The four elements of the latter were established in John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area (1948) 1 KB 344, and involve actual and exclusive possession that derives some benefit or value to the occupier and where the possession is not held for too transient a period.

Analysis

The appeal land operated by the authority provided for 28 spaces regulated by charging rates and time restrictions. There was a single entrance leading onto a main road and the appeal land had all the characteristics of an off-street car park. For these reasons, it was entered on the 2010 non-domestic Rating List.

Relying on Pimlico, Peckham and Greenwich Street Tramway Co. v The Assessment Committee of the Greenwich Union (1873) LR 9 QB 9, the Valuation Agency argued that the appeal land was rateable as it was more than mere highway land. In charging and restricting vehicular use, the authority was both in exclusive occupation and derived a non-profit benefit from their holding of such land. It was argued that the authority was in rateable occupation and accordingly, liable to non-domestic rates.

However, the authority had no legal power to prevent the public from using the land. Section 263 of the Highways Act 1980 provides for the vesting of all highway land in the highway authority and the defining features of a highway are that (a) it is open to the public at large (b) the public have a permanent right to use the highway and (c) the nature of public highway is primarily one of passage. Indeed, once a highway always a highway. Furthermore, income generated by the appeal land was restricted by sections 45-56 RTRA 1984.

In rejecting the Valuation Officer’s assessment, the Tribunal determined that:

  • the public is not a rateable occupier: per Lord Halsbury in The Churchwardens and Overseers of Lambeth Parish v London County Council [1897] AC 625: "A road is vested in someone, but, if a public road, there is no occupation of it any more than of a milestone or a direction post".
  • there was no exclusive possession since the use as a car park remained subordinate to the rights of the public over the highway.
  • the authority did not derive a ‘benefit’ as expenditure of income generated by the appeal land was ring-fenced and not intended as a revenue raising provision by virtue of the 1984 Act.

Conclusion

This issue had not been determined previously by the Valuation Tribunal, which is also surprising given the prevalence of on-street parking provided by highway authorities. Where it exists, highway authorities should review their liability for non-domestic rates in the case of chargeable on-street parking provision on the public highway. 

Poonam Pattni is a pupil barrister at 12 College Place, Southampton and can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it.. Dorset County Council was represented by William Webster, also of 12 College Place and who can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..