A landmark ruling over the business rates at the Exeter Royal Albert Memorial Museum could have a significant on the commercial property sector.
The case, Stephen G Hughes v Exeter City Council, was heard at the Upper Tribunal and was centred on whether or not business rates for museums should be valued based on the ‘Receipts and Expenditure’ methodology.
The current method involved basing the fees on the cost of rebuilding any institution, which is the chosen format of the Valuation Office Agency. However, the court ruled that business rates for museums should, in fact, be valued based on the Receipts and Expenditure method.
As a result, the Museum’s business rates will not be decided by a series of £24 million worth of essential repairs that began in 2008. The museum’s rateable value had been set at £510,000 since December 2011, before an appeal saw this reduced to £445,000.
A similar case involving the York Museums and Gallery Trust also challenged the system determining business rates in 2017, with the court ruling that the loss-making museum was not being charged an appropriate rate, reducing the tariff to £1.
It is this precedent that the Upper Tribunal has found in favour of, and the Exeter Royal Albert Memorial Museum will now see its rateable value reduced to £1, backdated to April 2015. The reduction is also set to be applied to the 2017 rating list.
The Valuation Office Agency has until 7 February 2020 to file a formal appeal against the decision.
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