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Rates are a tax on property in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain,Usage is mixed. The Guardian' and Telegraph' use Britain as a synonym for the United Kingdom. Some prefer to use Britain as shortha ...
used to fund local government. Business rates are collected throughout the United Kingdom. Domestic rates are collected in Northern Ireland and were collected in England and Wales before 1990 and in Scotland before 1989.


Domestic rates


England and Wales

Rates formally became universal by the
Act for the Relief of the Poor 1601 The Poor Relief Act 1601 (43 Eliz 1 c 2) was an List of Acts of the Parliament of England, 1485–1601, Act of the Parliament of England. The Act for the Relief of the Poor 1601, popularly known as the Elizabethan Poor Law, "43rd Elizabeth" or the ...
, this removed all doubt that parishes ( vestries) should and could levy a poor rate to fund the Poor Law. They often levied these earlier to fund poor law relief. Indeed, the
Court of Appeal An appellate court, commonly called an ''appeals court'', ''court of appeals'' (American English American English (AmE, AE, AmEng, USEng, en-US), sometimes called United States English or U.S. English, is the set of varieties of the Engl ...
in 2001 said "The law of rating is statutory and ancient, going back even before the Poor Relief Act 1601". As local government developed, separate rates were collected by parish authorities, borough corporations and county authorities. The County Rates Act 1739 ended the practice of separate rates being levied for individual purposes, such a highway rate and provided for a unified county rate. Rates on residential property were based on the nominal rental value, reassessed periodically in revaluations. By the Rating and Valuation Act 1925, revaluations were supposed to take place every five years but in practice they were frequently delayed or suspended. Revaluations took place in 1928/1929, 1934, 1956 (but based on 1939 values), 1963, and 1973. A revaluation due in the early 1980s was scrapped by the Secretary of State for the Environment
Michael Heseltine Michael Ray Dibdin Heseltine, Baron Heseltine, (; born 21 March 1933) is a British politician and businessman. Having begun his career as a property developer, he became one of the founders of the publishing house Haymarket. Heseltine served a ...
in June 1979, with Heseltine urging householders to tear up the forms already sent out by the Valuation Office. Rates in
England and Wales England and Wales () is a legal jurisdiction covering England and Wales, two of the four countries of the United Kingdom, parts of the United Kingdom. England and Wales forms the constitutional successor to the former Kingdom of England and follows ...

England and Wales
in 1990 were briefly replaced with the Community Charge (so called "poll tax"), a fixed
tax per head A poll tax, also known as head tax or capitation, is a tax levied as a fixed sum on every liable individual (typically every adult), without reference to income or resources. Head taxes were important sources of revenue for many governments fr ...
that was the same for everyone within a council area, a figure that could differ greatly per local authority. This was soon replaced with the
Council Tax Council Tax is a taxation, local taxation system used in England, Scotland and Wales. It is a Property tax, tax on domestic property, which was introduced in 1993 by the Local Government Finance Act 1992, replacing the short-lived Poll tax (Great ...
, a system based on the estimated market value of property assessed in bands of value, with a discount for people living alone.


Northern Ireland

Domestic rates are the current local government taxation in
Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; Ulster Scots dialects, Ulster-Scots: ') is #Descriptions, variously described as a country, province, or region which is Countries of the United Kingdom, part of the United Kingdom. Located in the ...

Northern Ireland
. Domestic rates consist of two components, the Regional rate set by the Northern Ireland Assembly and the District rate set by Local government in Northern Ireland, 11 district councils. Rate levels are set annually. The domestic rates are based on the capital value of the residential property on 1 January 2005. Valuation and rating of property is handled by Land and Property Services. Domestic rates are now unique to Northern Ireland within the United Kingdom.


Scotland

As in England, the individual domestic rates bill was calculated by multiplying the rateable valuation of a property by the domestic poundage rate set by the local Council. Before the Local Government (Scotland) Act 1994, 1995 reform of local government, domestic rates were set by Regional Councils, and prior to the Local Government (Scotland) Act 1973, 1975 reorganisation, rates were set by County Councils. The rateable value of domestic properties was recorded in valuation rolls, which provide an important historical source, as they record the name of the head of the household for every home in Scotland on set years; usually at five yearly intervals. All transfers of property ownership in Scotland are recorded in the Land Registration (Scots law), Register of Sasines or the Registers of Scotland#The Public Registers, Scottish Land Registry. Domestic rates were a more stable income source for local government as they are based entirely on property values which provide greater financial certainty to councils - reducing their cost of borrowing. Evasion of domestic rates was also more difficult in Scotland than in England as property ownership in Scotland can be more easily proven as Scots' Law has required public registration for a transfer of property to be effective since 1694, whereas HM Land Registry is incomplete and a compulsory public declaration is a more recent requirement. Council Tax is slightly easier to evade than domestic rates as liability for Council Tax falls on the occupants rather than the property owner - the UK does not have a complete Identity document#United Kingdom, identity register therefore Councils must rely on other forms of identification - such as the Electoral registration in the United Kingdom, electoral roll to identify, locate and pursue Council Tax evaders. Rates were abolished in Scotland in 1989 and replaced with the Community Charge which was in turn replaced by the
Council Tax Council Tax is a taxation, local taxation system used in England, Scotland and Wales. It is a Property tax, tax on domestic property, which was introduced in 1993 by the Local Government Finance Act 1992, replacing the short-lived Poll tax (Great ...
as in England and Wales. Since devolution, there have been attempts to replace Council Tax in Scotland with a Local income tax in Scotland, Local income tax and a Land value tax#Scotland, Land Value Tax.


Business rates

Rates on non-residential property (business rates) are still charged, at a uniform rate set by central government. Rates are collected by local councils, and were, until recently distributed nationally. Each local authority now keeps the money they collect meaning that some local authorities collect a disproportionate amount when compared to number of residents Rating assessments (rateable values) are made on all non-domestic properties. As well as business, this includes village halls and other non-business occupations. The exception to this is where a hereditament is exempt by virtue of Schedule 6 of the Local Government Finance Act 1988 which specifies exempt classes. The rateable value should represent the reasonable rental value of the occupation according to the circumstances at the "Material Day" and according to rental values at the "Antecedent Valuation Date". (For the compiled 2005 Rating List the "Material Day" is 1 April 2005 and the "Antecedent Valuation Date" is 1 April 2003). Later physical changes will have a later Material Day but the Antecedent Valuation Date will still be 1 April 2003 for the currency of the 2005 Rating List. The Rating List is a public document.


Other rates

Taxes raised for other purposes are also called rates in the United Kingdom. *In some parts a drainage rate must be charged to fund drainage work which protects these low-lying and erosion-subjected parts from flooding. The first Act of Parliament to authorise the collection of drainage rates was the Statute of Sewers, passed by Henry VIII of England, King Henry VIII in 1531, which established a chronologically ordered principle of ''no benefit, no rates''. This hampered the work of drainage authorities for four centuries – as to intended/inceptive work they could only charge permanent occupiers voluntarily receiving direct benefit, or face valid legal objection. Overturned by the Land Drainage Act 1930, repealing 20 Acts from 1531 to the Land Drainage Act 1929, the setup became catchment boards, to cover a whole river basin. These charge drainage rates to people anywhere in them. As to farming, rates apply to all occupiers of agricultural land and buildings within a drainage district. This saw reiteration and other laws made, in the Land Drainage Act 1991. *The Crown Estate Paving Commission levies Local Act of Parliament, local statutory rates on paving by residential property it covers around Regent's Park, London, under the Crown Estate Paving Act 1851. *Leasehold properties rest on the terms of the lease, with little regulation of their terms, but the possibility of revision (variation or rectification) by negotiation or representation. In lease draftsmanship the terms "estate charge" and "service charge" dominate. *Rates can attach to freeholds by express original covenant on the title such as for the optional promenade use in ''Halsall v Brizell'', or communal garden use in List of garden squares in London, garden squares. The case was approved by ''Rhone v Stephens'', but narrowed. Sydney Templeman, Baron Templeman, Lord Templeman said the following.[1994] UKHL 3, [1994] 2 AC 310 : :Thus someone with property above or below a freehold (for example) may struggle to oblige that freehold's owner to carry out their moral obligations, without a prior rentcharge, deed of rentcharge or enduring chain of covenant (law), deed of covenants, due to the high value placed on privity of contract and privity of estate as these together benefit otherwise burdened freeholds.


References

{{Rates in the United Kingdom Rates in the United Kingdom, Local government in the United Kingdom