Council Tax: Banding of a self-contained unit

acideye

Hi there,

Question of how valuation works when it comes to a self-contained unit.

The property we are renting, used to be a self contained unit, but has been converted into two self-contained units with separate entrances just before we moved in.

So effectively there is now a flat that we live in (i.e. 20A) and shop downstairs (that remained 20) - while in the past the whole of the block was referred to as 20.

We received a council tax letter the other day, which is addressed to 20, but has our names on it, the address has been given a Band C.

From what I've seen online, the shop and our flat should really have separate council tax bills - each with own banding.

How does valuation work in this case, does it mean that the Band C cost is split between the two units, or does it mean that both the shop and our flat will get the Band C - and both of us are effectively paying the same amount of money?

I guess the real question is will it work out cheaper for us if we are banded separately from the shop? Or will it remain the same - and council is simply going to double the amount of money they would've got if this was a single property as it used to be in the past?

Thanks for your advice in advance!

lincroft1710

Shops are not subject to Council Tax, they are subject to Non Domestic (or Business) Rates. So your CT band does not include the shop. What you haven't said is what the property was before the split. If it was just a house (no shop) check that the Band C doesn't still relate to the whole house.

CIS

I guess the real question is will it work out cheaper for us if we are banded separately from the shop? Or will it remain the same - and council is simply going to double the amount of money they would've got if this was a single property as it used to be in the past?

You have no choice in the matter, neither do the council. The Valuation Office Agency (VOA) are responsible for determining whether a property should be domestic or non-domestic and for the council tax band/rateable value. The council collect the relevant charge due based on , primarily, the council tax band/rateable value determined by the VOA

acideye

What you haven't said is what the property was before the split.

From what I know the whole property used to belong to an owner who was running his business as well as living at the same place, so I'm certain it wasn't split before being sold to our landlord eventually.

Not sure how the CT was calculated before, but since we've been given a band C for the whole of the property I would take a rough guess that it was never considered non-domestic.

My guess is this will change now, and once the shop is rented out it will be covered by the Business rate as you point out.

And we in our flat will have to pay up for the Band C as per original banding.

Regardless, I'll give the CT office a call tomorrow, and let them know that the property has been split into a shop and a flat, and that "20" refers to the shop, and 20A refers to the flat.

I guess I could then check with the VOA how much a 1 bedroom flat is valued for in the area - to see if I can get the banding lowered this way perhaps? Do you think this can be worthwhile?

noh

You can check business rate valuations here:-

http://www.2010.voa.gov.uk/rli/

Council Tax Bandings can be checked here:-

http://www.voa.gov.uk/council_tax/cti_home.htm?banner-cthome

acideye

Hi all,

And thank you for your kind responses.

I've now spoken to the Council Tax Office rep, and learned that while the two units are under one roof and share the same address - one (flat) is on Domestic rate (band C), and the other (shop) is on Business rate.

As expected the banding did not change, but I was told that the address will be updated for our residential unit to 20A.

Now, with help of noh - I've checked the Valuation for the similar properties on our street to find that there are Bands “B” and “A” in use, with only exception being ours at Band “C”.

Do you think it may be worthwhile asking the VOA to re-assess our banding valuation based on the fact that similar properties near by are banded lower?
If we are to make an appeal above, what are the consequences if it is not successful, if any?

Many Thanks!

lincroft1710

Unless you're in central London or a similar expensive area, at first sight Band C seems high for a converted 1 bed flat above a shop. I would certainly ask for a reassessment, if you have been in flat less than 6 months you have right of appeal and the right to have your case determined by the Valuation Tribunal, who are independent of VOA.

Check VOA website, you can appeal online.