Business Rates

[gerryuk]

Does Network Rail have to pay each council business rates for the land that the track is on? I am sure that they would have to pay councils in, say Sheffield and Manchester for the land that their respective stations sit on, but what about the track that runs between the two?
Are they exempt or do Network Rail have to pay each council along every line business rates for the track running through their area?

 

[GB]

It was my understanding that Network Rail own the land their main infrastructure is on?

 

[ilkestonian]

It was my understanding that Network Rail own the land their main infrastructure is on?

That in itself has no bearing on whether business rates are payable.

It depends on whether a property is a business (as opposed to a dwelling), but there may well be specific exceptions for major infrastructure. However these would relate to the type of infrastructure, not whether it was owned or rented.

 

[Darren R]

I believe Business Rates are only charged on 'properties' rather than property - that is to say buildings (and surrounding enclosed land) that is used by the business to persue its economic activities, rather than on the property (buildings and land) that are owned by the business.

The railway lines themselves are infrastructure rather than a business, and I assume as such are not liable to Business Rates - otherwise the DfT would have to pay Rates to councils for the land on which motorways and major roads sit.

Network Rail will have to pay Business Rates on their various offices, but I'm not sure about stations. It could be argued that stations are where the business of the railways takes place, and as such may be liable to collection of Business Rates on them unless they are specifically exempted in the legislation. It used to be the case that bus stations owned by bus companies were charged, but I don't know if that is still the case (or even if there are any bus stations still owned by bus companies!)

Interesting question though. When you start to think about it, all sorts of potential anomalies present themselves. What about freight terminals, for instance? If passenger stations are a place of business, surely so are goods stations.

 

[WatcherZero]

Warehousing would be taxable, along with workshops, retail and offices. Was a 1936 case that established the precedent that station retail was rateable (southern railway had argued that as a station was primarily occupied by rail it shouldnt be).

Agricultural uses, fisheries, churches, parks, air raid shelters, bridges over water are exempt and there is an 80% discount for charities or not for profits.

 

[deltic]

Railways along with utilities come under the central rating list which assesses the value of their properties across the whole country and payment is made direct to the Secretary of State and not to individual local authorities. Network Rail rateable value is £277.5m, London Underground is £59m - details can be found at http://www.2010.voa.gov.uk/rli/static/HelpPages/Documents/central_rating_list_for_england_2010.pdf

 

[WatcherZero]

And if you follow on to the law itself, NR property (and other rail companies/light rail companies) is exempted from local rates except for the following:

(a) premises used as a shop, hotel, museum or place of public refreshment;
(b) premises used wholly or mainly as office premises, where those premises are not situated on the operational land of—

(i) any person designated by regulation 3 and named in Part 1 of the Schedule;
(ii) a licence exempt operator or licence holder;​

(c) premises or rights so let out as to be capable of separate assessment, other than those falling within paragraph (1)(b) or (2)(b); or

(d) premises (other than premises used in connection with the collection and delivery of parcels, goods or merchandise conveyed or to be conveyed by rail) used wholly or in part for purposes concerned with—

(i) the carriage of goods or passengers by road transport or sea transport; or
(ii) harbours,​

or for purposes incidental to such purposes;

Interestingly NR has a policy of opting in to paying VAT on all property both commercial and railway land so as to be eligible for claiming VAT relief on it (i.e. claiming back the VAT charged for building materials).

 

[telstarbox]

On a related note, Metrolink are one of the top 10 ratepayers to Manchester City Council:

http://www.placenorthwest.co.uk/who-are-the-biggest-business-rates-payers-in-manchester.html

 

[lincolnshire]

Thats why often when a building becomes empty, and looks like it will never be used again in its present form it ends up getting knocked down to save paying business rates on the property.

A former cinema / disco pub is going to be knocked down as the land owners don,t want it and by demolishing the place will get rid of there business rate commitment for the property.

 

[WatcherZero]

Other times desperate landlords will agree to lease it for free if the company picks up the rates tab.