Nicky Kinnear, Associate Solicitor, and Alex Worthington, Barrister and Associate Director, at Greenhalgh Kerr have successfully represented a billing authority before the Valuation Tribunal.

The case

The appellant owned a block of flats, which was primarily used as accommodation by overseas students. The block contained 6 flats; each flat was sub divided into self contained rooms. Each flat was classified as being a house in multiple occupation. The billing authority served the appellant with council tax demands as the owner of the entire block.

The appellant appealed this decision to the Valuation Tribunal arguing that it did not own the block. It claimed that it had granted a lease to two companies and the tenants were therefore liable to pay council tax for the flats in the block. The first company in question had entered into liquidation and the appellant relied on a second lease that it had granted to another company shortly thereafter.

The leases

The directors of the appellant company and the directors of the two tenant companies were members of the same family. The billing authority suspected that the appellant had granted these leases to avoid paying council tax for the flats.

The law recognises that a person can organise their affairs to mitigate a tax liability. In this particular case neither lease had been properly executed as a deed. The second lease had been granted whilst the first lease was allegedly still in place. Because of these issues the billing authority did not recognise the validity of the leases and maintained the demands for payment of council tax for the flats.

The appeal

A person has a right of appeal to the Valuation Tribunal against a billing decision under Section 16 of the Local Government Finance Act 1992. Anyone who wishes to appeal must first serve the relevant billing authority with grievance notice and demonstrate that one of three conditions have been met, i.e., they must show they have had no response to their notice within 2 months or, that they remain aggrieved with the billing authority having either upheld or rebuked their grievance. 

The billing authority in this case had no record of receiving the appellant’s grievance notice. To the contrary, the appellant was in the process of negotiating an arrangement for payment of the outstanding council tax when the notice was allegedly sent.

A Microsoft Word copy of the notice was produced by the appellant. The document was a letter addressed to the billing authority dated 29 November 2019. A witness for the appellant gave evidence that this letter had been sent to the billing authority by first class post 29 November 2019. The billing authority sought to rely on the properties of the document, also known as ‘meta-data’, which demonstrated the letter had last been printed months earlier. 

The tribunal’s findings

The tribunal rejected the appellant’s evidence and found that no notice had been served. Whilst the tribunal agreed that it did not have jurisdiction to hear the appeal it went on to consider the leases and accepted the billing authority’s case that neither lease was valid. The appeal was dismissed in its entirety.  

Next Steps

The appellant had 21 days to appeal this decision to the Upper Tribunal but has not done so. The council tax remains unpaid and the billing authority intends to review this with a view to proceeding with the collection and enforcement of the outstanding debt that the appellant has unsuccessfully attempted to challenge. 

Further information

If you would like further information regarding the case or require assistance with considering the validity of a lease, grievance notice or representation in any proceedings before the Valuation Tribunal please do not hesitate to contact Nicky Kinnear (Nicky.Kinnear@greenhalghkerr.com or Alex Worthington (Alex.Worthington@greenhalghkerr.com).