Business rates appeal affecting museums dismissed

An appeal by the Valuation Office Agency against the Royal Albert Memorial Museum (RAMM) and Art Gallery in Exeter has been dismissed by the Upper Tribunal (Land Chambers).

The appeal had been lodged against a 2018 decision by the Valuation Tribunal for England which determined the Rateable Value of the museum at £1, effective from 1 April 2017.

RAMM had been entered into the 2010 non-domestic rating list at a Rateable Value of £510,000, with effect from 15 December 2011, following a refurbishment project that had started in 2008. Ratepayer Exeter City Council had appealed the six-figure valuation and a revised RV of £445,000 was agreed.

The Council followed this up with a further proposal to alter the rating list on 18 September 2017 after the Upper Tribunal’s decision in Hughes (VO) v York Museums and Gallery Trust [2017] which determined the Rateable Value on the 2010 list at £1 using the receipts and expenditure as the basis of the valuation.

At the time, the VTE allowed RAMM’s appeal and concluded: “in applying the reality principle to the rating hypothesis for this property, it could not reasonably be expected to have achieved, on an open market letting, a positive rent. The benefit to be derived from its occupation was clearly not financial and, while there may be some socio economic benefit to the area, this has not been shown to be significant enough to off-set the financial burden which would rest on the hypothetical tenant of the property occupying it for the purposes of use as a museum.”

The VTE ordered that the museum and art gallery should be entered in the list at a RV of £1 with effect from 1 April 2015 and (by agreement) that the café should be the subject of a separate entry in the list at a Rateable Value of £14,750.

CTG will shortly be publishing further commentary on the case and the wider implications for the sector.