Part 2: Forms of Return and Rent and Lease Details (RALD)
The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.
Para 5(1) of Schedule 9 to the Local Government Finance Act 1988 (as amended) (the Act) provides:
"A valuation officer may serve a notice on a person who is an owner or occupier of a hereditament requesting him to supply to the officer information –
which is specified in the notice, and which the officer reasonably believes will assist him in carrying out functions conferred or imposed on him by or under this Part.
A notice under this paragraph must state that the officer believes the information requested will assist him in carrying out functions conferred or imposed on him by or under this Part."
The Valuation Officer (VO) for a charging authority is required to compile and maintain non-domestic rating lists for the authority (Section 41 of the Act) as one of the statutory functions, and therefore may serve notices stating that the information requested in the notice will assist in the compilation of a new rating list or the maintenance of an existing rating list.
Any notice served by the VO under paragraph 5 of schedule 9 to the Act must meet with certain statutory requirements. To assist in this regard, various ‘forms of return’ (FORs) have been developed and are available for issue by valuation officers. Details of the currently available FORs for use in respect of different types of hereditament are set out in Appendix 1.
Since Reval 2017 the majority of schedule 9 requests are via a RALD letter. The RALD replaces the FOR VO6003 used for bulk classes of property. RALD is an acronym for Rent and Lease Details. The RALD letter is sent to the property address or in the case of large companies to their Head Office. The letter contains a unique reference number which together with the property’s postcode is used to access an electronic version of a form of return via a secure internet site.
The electronic FOR requests all the information that a hardcopy FOR requests but the advantage to the occupier and the VOA is that the data is supplied direct to the database once verification checks are made.
The RALD request for information is made under the powers given to the Valuation Officer under paragraph 5 of schedule 9 to the LGFA 1988 and carries the same deadlines and penalties introduced by the LGFA 2003 referred to as ‘Civil Penalties’.
RALDs/FORs requests may be served on Landlords as well as Tenants. Requests for information are not limited to requests for lease details, an example of which were FORs have previously been used to request the location of Masts from Telecommunications Companies which otherwise the Valuation Officer would have had difficulty in locating and assessing.
The ‘Valuation Officer’ serves a notice on a person requesting the supply of information when he reasonably believes the information requested will assist them in carrying out their statutory functions. Section 41(4) of the Act specifies that one of these functions is ensuring the accurate compilation of any new rating list.
As long as the Valuation Officer believes the information will assist in compiling and maintaining a list, reasonable practicable steps must be taken to pursue the information. It is clearly for the Valuation Officer to determine the steps needed to ensure accurate rating lists can be compiled and maintained, with the assistance of specialists, team leaders and others as necessary.
Valuation officers should consider other sources of information at their disposal when deciding the importance of, and usefulness of the information they are seeking. Depending on the particular information already held, each Valuation Officer will have to determine their own priorities for any additional information required. Information that valuation officers reasonably believe will assist them ranges from useful to absolutely essential.
It should be remembered that in addition to the statutory power to serve notices requesting information (RALDs/FORs), voluntary electronic bulk provision of information is encouraged, which may be of particular interest to occupiers of many properties or Landlords. Any such voluntary bulk provision of information will enable the Valuation Officer to target much more effectively, and thereby further reduce the number of individual RALD/FOR requests made, to the mutual benefit of both the ratepayer and VO.
Useful or Essential? – Gauging the True Level of Assistance Expected from Requests for Information
Often the usefulness of the information requested will only be understood after it has been provided. However, as long as it was reasonable to expect it to be helpful when the request is made, the information should be pursued in the most efficient manner possible. When deciding how best to pursue information, it is important that VOs bear in mind the nature of the information being sought, its eventual likely assistance, and how urgently it is required.
Consideration should be made to the various means of obtaining information and that RALDs/FORs do not automatically provide the best route, particularly if information is required very quickly. An example of this may be details of a rent passing in respect of a newly discovered review where the information is required two weeks before a decision notice is due to be issued; in such a case an informal route is more likely to provide the information in time for it to be of use. A RALD or FOR can be issued subsequently to obtain the information formerly.
Where information is considered essential, other avenues have not produced it, and it is not required within eight weeks (56-days), VOs should use RALDs/FORs to pursue it.
VOs should only pursue information where it is likely to assist them and the information is not already held in enough detail to provide reasonable assistance.
Although it is clearly inappropriate for a Valuation Officer to pursue information using a RALD/FOR unless they believe it will assist, it is also not acceptable for a person who is served a notice to decide what assistance the information requested may provide to the Valuation Officer, thereby endeavouring to limit or refuse its supply. It is for the Valuation Officer to decide all reasonable steps needed to pursue information they believe will assist in carrying out their functions but once the information has been requested on a RALD/FOR, it should be supplied.
Specialist Units should inform the Market Information Team when they believe a request for information should be served in respect of the specialist properties they deal with.
Responsibility for the Supply of Information Requested
Once an FOR is served, Paragraph 5(2) of the Act insists that;
"A person on whom a notice is served under this paragraph shall supply the information requested in such form and manner specified in the notice…"
and in Paragraph 5A (1) that;
"If a person on whom a notice is served under paragraph 5 above fails to comply with paragraph 5 (2) within the period of 56 days beginning on the day on which the notice is served, he shall be liable to a penalty of £100."
It is therefore solely the responsibility of the person served a notice to supply the information within 56 days. If the Valuation Officer has not received the information within 56 days in such form and manner specified, the liability to penalty of £100 arises and a penalty notice may be served to collect it.
Before issue, each FOR is to be prepared for issue by registering it on the Rating Support Application (RSA) and attaching the resultant label(s) to the correct Form of Return. The label produced by RSA will in almost every case show two addresses, the name and address of the person upon whom the notice is to be served and the property address in respect of which the information is required. In many cases these addresses will be the same. In addition to the addresses, a unique reference number will also be shown on the label.
The RALD letter will be generated via RSA and addressed to the Tenant or Landlord at their correspondence address. The RALD will identify the property which the information is being requested about. The postcode of the property and a unique reference number enables the recipient of the RALD to provide information about the lease terms via the internet, which after verification is stored within the CDB.
Every effort should be made to identify the name of the person on whom the FOR/RALD is served. In the case of sole traders the name of an actual individual is appropriate. If trading under a ‘Trading Name’, the name of the trader using the trading name is acceptable; this should be expressed together with the trading name, for example ‘Edward Smith, Trading as Teddy’s Cycles’. In the case of partnerships, ideally the name of a partner of the firm should be used. A registered company’s name is acceptable in its own right. In the case of registered companies, company names can be verified from the companies house website at www.companieshouse.gov.uk.
It should be noted that where the website offers a choice of many similar company names, the most reasonable name and address should be used wherever possible. Clearly it is preferable to serve on the actual registered company trading from the hereditament rather than, say, a ‘holding company’, but it is perfectly acceptable where such a ‘holding company’ is the owner or occupier of a hereditament and holds the information requested.
If the VO is seeking information about the property at the address where the notice is served, and where there is a possibility the occupier may have moved, they may want the new occupier of the property to complete the FOR/RALD. In such circumstances the VO will want to minimise the risk that the FOR/RALD is forwarded on. To avoid this, the words ‘or occupier’ should be placed immediately after the name, so that it should appear in the addressing as appropriate. Exceptionally, where an occupier’s name is not known and cannot be reasonably ascertained, the FOR/RALD may be simply sent to ‘The Occupier’.
Although service on the subject property (or hereditament) is perfectly acceptable, where the occupier is a registered company an additional option would be to serve the notice on their registered or principal office. For instance, service on their registered or principal office could ensure a swifter return of the information requested. It should be noted that when serving notices on registered companies, registered office addresses can often be ascertained free of charge from the ‘companies house’ website at www.companieshouse.gov.uk.
Paragraph 5H to schedule 9 of the Act states that where a valuation officer requires the name or address of a person on whom an FOR or RALD is to be served, they may serve a notice on a billing authority where they reasonably believe that the BA may have that information requesting the authority to supply him with that information. This notice is available in the VOA forms lists, and is identified as VO 6120. Care should be taken when considering using the name of the person supplied by billing authorities; although invariably a person on whom a notice could be served, the person so named should ideally be the actual owner or occupier of the hereditament (rather than, for example, an agent or other representative paying the rates on their behalf). Where the person identified by the billing authority is considered appropriate and is not a registered company, the FOR/RALD should wherever practicable be sent to the hereditament where this differs from the address provided by a billing authority (an obvious exception to this would be an address in respect of an incorporeal hereditament like an advert right). Where the party identified by the billing authority is considered appropriate, is a registered company and the address provided is not that of the actual subject property, the address provided should be checked for accuracy on the ‘Companies House’ website (see above).
Where there is still any doubt about the address to be used, FOR/RALDs should be served on a person (preferably an individual or registered company) at the hereditament. In all cases, as long as the name and address are reasonable in the circumstances, then the request for information is considered served unless it can be shown that this is not the case.
Where a name and/or address has been obtained but is not considered appropriate for service of requests, there is nothing to prevent VOs using such details to send copies of correspondence where they believe it would help with the return of information sought.
All actions taken whilst preparing the FOR/RALDs to encourage the speedy return of information are mutually beneficial; VOs would hope to have the information more quickly which also means the likelihood of imposing penalties for late supply are reduced.
The Guidance Hub contains full details of the process to follow when issuing FOR/RALDs and any penalty letters that arise due to requests not being actioned within 56 days.
Paragraph 5(4) of schedule 9 to the Act states that if a notice has been served on a person, and he makes a statement he knows to be false, or he recklessly makes a statement, which is false, he shall be liable on summary conviction to imprisonment or a fine or both. False statements made in this manner are taken very seriously and VOs should compile and send a personally signed, detailed report containing all relevant information to Director of Rating, Local Taxation at CEO for necessary action to be considered.
It is imperative that FORs/RALDs are completed adequately. It is therefore, recommended that they be scrutinised for completeness by the Data Team Manager. Any doubt as to whether a FOR/RALD is complete or that the information given is acceptable, should be discussed with the Team Leader and VO. Each case should be judged on its merits and the Valuation Officer, in arriving at their conclusion, should have regard to the reasons why the missing information was originally considered to be required. Deficiencies should be dealt with using Standard Letters A and B (see Paragraph 7 of this section of the Rating Manual).
In the event of a categorical refusal to supply specific details of rent, tenure, costs, accounts, receipts, turnover, throughput or any other information requested, the Valuation Officer should continue to pursue the information as detailed in this section of the Rating Manual, issuing reminders, warnings and penalty notices as appropriate.
It should be remembered that where the FOR/RALD is not completed correctly, but for whatever reason the FOR/RALD is prematurely registered as returned on the Rating Support Application (RSA), ongoing information (and penalty) recovery action is not prevented. Although once registered prematurely future elements of automated RSA support such as reminders and penalty notices have to be dealt with manually, the pursuit of the missing information and any collection of penalties due should continue as appropriate. Electronic templates of letters and notices should be used, and these are available in the usual VOA forms lists.
Standard Letters A or B should be used where additional information is sought. These can be produced from the RSA system:
Standard letter A (VO6152 and VO6152(W)) is used for returning an unsigned and/or undated form to the declarer. An example of standard letter A is shown at Appendix 2
Standard letter B (VO6153 and VO6153(W)) is used where additional questions are asked or where clarification is sought. An example of standard letter B is shown at Appendix 3
Standard letter B (VO6153 and VO6153(W)) should be sent where an FOR has been received back but is either incomplete or in need of clarification. It should also be sent where incomplete or unclear information is received in response to the issue of an FOR, but the information has been returned in another format: Such examples might include faxes, letters or e-mails.
In many circumstances, a telephone call to the declarer may be made in the first instance. It is important to make any such calls as soon as possible after receipt of the incomplete form as hopefully the declarer will still remember sending it. Standard letter B may still need to be issued if the telephone contact is unsuccessful.
To issue a standard letter A or B, access Issue Standard Letters option from the Rental Information menu. Operators must enter the date the standard letter is to be issued and must select the type of letter to be issued i.e. A or B.
If Standard Letter A (VO 6152) is selected, operators should commit and then exit the screen to print the letter.
If Standard Letter B (VO 6153) is selected operators must press return to enter an additional text block. Appropriate text must be entered. On completion, commit and exit the screen to print the letter.
In either case it is important to note that any contact made at this stage should be directed to the person who returned the incomplete FOR/RALD. Bear in mind that they could be someone acting on behalf of the original recipient.
Where received, the original but incomplete FOR/RALD should be retained and a photocopy (either in full or of the relevant part(s)) returned to the ratepayer. On return these should be linked to the original FOR/RALD and another check for completeness made. A copy of the whole FOR/RALD should be made and attached to ‘Standard Letter A’. Depending on the degree of incompleteness, it may be inappropriate to copy the whole of the longer forms when using standard letter B. Instead, a photocopy of the front and back pages of the form together with the page(s), which relate to the incomplete/inconsistent information should be made and attached to the letter.
Where inadequate information is received but not sent on the original FOR (e.g. fax, letter or e-mail), the hardcopy information should be retained and a photocopy (either in full or of the relevant part(s)) returned to the relevant person with a duplicate FOR to complete attached to ‘Standard Letter B’ (VO 6153), as required. On return the information should be checked once more for completeness.
In certain cases the FOR will have been completed satisfactorily, but further information may be reasonably required by the Valuation Officer to interpret the returned information properly. If any of the answers require amplification in this way, an FOR ‘questionnaire’ VO6005 should be completed and sent to the person making the original return.
Where sent as a follow-up, the FOR VO6005 should seek further and better information the Valuation Officer does not already possess in relation to particulars supplied on, or omitted from, the original form of return. When returned completed satisfactorily, the VO6005 questionnaire should be attached to the original FOR.
Additionally, where no specific FOR is suitable, the FOR ‘questionnaire’ VO6005 can be issued in its own right; in such instances, the VO6005 form should request the specific information the VO considers will assist him (see paragraph 3).
It is not appropriate to use a VO6005 to merely re-ask a question that has not been answered on a recently returned FOR; this causes undue delay to the return of information that has already been requested on the original FOR. In such circumstances, the incomplete original FOR should not be marked as ‘returned’ on RSA; instead, RSA generated Standard Letters A and B should be used to obtain the missing information from that recently returned but incomplete FOR.
All provisions outlined in this section of the Rating Manual will apply to a VO6005 questionnaire; whether served as a follow-up or not, it should be treated as a request for information in its own right, with liability to £100 penalty arising if the information is not supplied within 56 days.
A template is available in the VOA Forms Lists (in MS Word) that allows questions to be pre-typed and photocopied on to the VO 6005 Form of Return (FOR) in preference to them being hand written.
Up to the issue of the penalty notice, time frames recommended in this paragraph run from the issue date of the FOR. They are specified in such a way as to provide the person on whom an FOR is served every opportunity to either return the information to the Valuation Officer, or make contact with him or her if they are experiencing difficulties with the form(s), hopefully well before a penalty notice is served.
It should be noted that failure to adhere strictly to these recommended time frames will not normally frustrate the proper collection of penalties due; instead, each case should be judged on its own facts, the merits of the case being considered against the legislative time frames and regulations specified in paragraph 5 of schedule 9 to the Act. In particular, it should be noted that a penalty notice cannot be served ‘late’; once a liability to £100 arises, the penalty can be collected at any time.
‘Reminder’ Letter (VO6150 and VO6150W) Appendix 4
‘Warning’ Letter (VO6151 and VO6151W) Appendix 5
Should a person on whom an FOR is served contact the Valuation Officer on receipt of a warning notice to request more time to complete the FOR, depending on the circumstances it is reasonable to allow up to a maximum of two weeks following the ‘liability due date’ before serving a ‘penalty notice’ (the ‘liability due date’ is indicated in the text of the warning notice). However, it should be emphasised that any period elapsing between the dates a person becomes liable to penalties and the date the Valuation Officer decides to serve the penalty ‘notice’ is at his discretion. If the information requested is still not returned after any additional period of grace has passed, there should be no further delay in serving the ‘penalty notice’.
It is important to distinguish between liability to a penalty of £100 and the actual service of a penalty notice. Any extensions in time before serving a penalty notice do not remove liability to penalty of £100, which arises in all instances where the person has failed to supply the information within 56 days. The VO may serve a penalty notice at any time after a person becomes liable to a penalty of £100, whether the information requested has been supplied to his satisfaction or not.
‘Penalty Notice’ (PN1) (VO6154 and VO6154W) Appendix 6
Paragraph 5A (1) of schedule 9 to the Act states that if a person on whom a notice [Form of Return] is served fails to supply the information requested within the period of 56 days beginning with the day the notice is served, he shall be liable to a penalty of £100. Paragraph 5A (2) of schedule 9 to the Act states that where a person becomes liable to a penalty under paragraph 5A(1), the Valuation Officer shall serve on him a ‘penalty notice’.
A ‘penalty notice’ served under paragraph 5A(2) of Schedule 9 to the Act must state that the person on whom it is served has failed to comply with the request for information; it must also state his liability to a penalty of £100, his liability to further penalties after 21 days and his right of appeal.
Prior to serving Penalty Notices, VOs should be satisfied that the procedures in paragraph 4 of this section regarding the person on whom the notice is to be served and the appropriate service address have been followed. Every effort should be made to ensure penalty notices are served on the correct person at the correct address.
Waiting until the recommended day for service of the penalty notices will ensure liability to £100 has arisen. This will not eliminate the possibility that FORs and penalty notices ‘cross in the post’, but means that if they do so, the penalty remains to be paid because the information was not with the VO within 56 days of service of the FOR and liability to £100 exists. Therefore it is important not to serve the penalty notice too soon, ensuring that liability to £100 has occurred and therefore making any ‘crossing in the post’ immaterial to the collection of penalties.
Although VOs should endeavour to serve penalty notices within a reasonable time of liability to a penalty of £100 arising, they must not serve a penalty notice too early. Similarly, whilst it is a matter of fact and law that it is not possible to serve a penalty notice ‘too late’, VOs should make reasonable endeavours to serve any penalty notice within a reasonable time of liability arising so that the recipient is aware why he has received a penalty. It is considered perfectly acceptable for VOs to serve a penalty notice up to six weeks after liability arising, but if in any doubt or if a longer period has elapsed, VOs should seek advice from the Civil Penalty Recovery (CPRU) Team.
Once it is served, the penalty notice confirms the liability to £100 and from the date of service the possibility of further time related penalties are spelt-out. Whether they arise, or the amount to which such further penalties accrue, is dependant on satisfactory return of information. A penalty notice also provides other information to the person on whom it is served, such as rights of appeal.
A non-respondent’s liability to £100 penalty always arises where information is not returned in the form and manner specified by the VO within 56-days of service of FOR, and liability to £100 remains until a penalty notice is served (whether or not the information requested is returned in the interim).
Paragraph 5A (3) of schedule 9 to the Act states that if a person on whom a penalty notice is served under paragraph 5A(2) fails to supply the information requested within the period of 21 days beginning with the day the notice is served he shall be liable to a further penalty of £100 and to a further penalty of £20 a day for each day in respect of which the failure continues after the end of that period.
Liability to penalties in respect of failure to comply with a notice served under paragraph 5 of schedule 9 to the Act shall not exceed the greater of the rateable value of the hereditament concerned for the day on which penalty notice is served, and £500.
‘You Are Liable To Further Penalties’ Letter (PN2) (VO6155 and VO6155W) Appendix 7
It is important not to add inappropriate weight to PN2. Whilst the FOR remains unreturned, further penalties of £100 and £20 for each day thereafter begin to accrue 21 days after the service of PN1 whether or not PN2 is issued.
The issue of PN2 acts as a reminder that the person on whom the Penalty Notice was served is liable to further penalties because they have not returned the form within 21 days of service of that Penalty Notice. It is therefore important to recognise that the date of issue of PN2 is immaterial to the calculation of further penalties, and under no circumstances should the issue date of PN2 be used to calculate further penalties due.
As future liability to further penalties is properly and fully stated in PN1, such further penalties accrue without need for any more notifications, and therefore accrue irrespective of when PN2 is issued.
This means PN2 can be issued any time from day 25 onwards, it is for VOs to determine when to issue PN2, but it is anticipated it would be reasonably soon after the 25^th^ day following the issue of PN1.
How to decide whether and at what juncture to serve a Penalty Notice
It is not anticipated that VOs serve a penalty notice in every instance a FOR is not returned after the 56-day period allowed by statute. The VO has discretion whether or not to do so and it is therefore important that VOs consider all the available facts and issues prior to serving any penalty notice to ensure that the subsequent efforts are likely to succeed in both collection of the information requested and penalty accrued.
It is important to remember that information return is the primary concern of valuation officers; not only the information in any individual instance, but also the overall speed, quality and instances of information return in respect of all FORs served by any particular VO.
This means that the VO will decide when and when not to serve a penalty notice by weighing up the anticipated assistance likely to be provided by the information in any particular instance; he or she must also have an eye on the overall speed, quality and amount of information returned in respect of all FORs served in their billing authority areas. It is not appropriate for a VO to serve so many penalty notices that the efforts made to serve them and deal with subsequent collection of penalty monies distracts the VO from the primary objective of gathering information. Similarly, if disproportionately low numbers of penalty notices are served, ratepayers could readily conclude that lack of effective pursuit means that information return is not so important to a VO; such an outcome would detrimentally affect the speed, quality and incidence of returning forms. It is therefore anticipated that VOs monitor their information return rates and consider them in the light of their own needs and those of other VOs to ensure they are doing everything possible, including the service of penalty notices, to achieve the timely return of useful information.
Although it is acknowledged that VOs will not serve a penalty notice every time information requested is not returned within 56 days, it should be remembered that liability to £100 penalty automatically arises once the 56 day period has passed. This means valuation officers’ are entitled to serve a penalty notice seeking £100 penalty at any time after the 56 day period has expired, whether the information has been returned in the interim or not. This would not be done as a matter of course but a VO may consider it necessary, for example where faced with a situation of co-ordinated delay on the part of a group of recipients or to address alleged inconsistencies where appropriate.
Clearly, to ensure the ratepayer can make a link between cause and event, a penalty notice should not be served at an unreasonable length of time from the end of the 56 day period, but this is for the VO to determine based on the facts available to him in each instance.
See paragraph 6 above which deals with the production of penalty notices in those instances when RSA may not be able to assist, for example if the information has been returned but an outstanding liability to £100 is to be pursued some time later by service of a penalty notice.
A person aggrieved at the imposition of a penalty may make an appeal to a valuation tribunal executive; any such appeal must be made within 28 days of the service of the ‘penalty notice’ (PN1), although the 2009 Regulations for England allow appellants’ requests for extensions of time to be considered by the VTE.
In any contact with the ratepayer or their agent, it should be made clear that the making of an appeal will not prevent the imposition of further penalties; nor does it stop the daily penalties continuing to accrue thereafter – it is emphasised that only the receipt of a satisfactorily completed FOR will have that effect.
For England, Regulation 19 in Part 4 of The Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009 SI No 2268 directs that:
1) A person who wishes to appeal against a completion notice or the imposition of a penalty must send or deliver a notice of appeal to the VTE so that it is received within 28 days after the date on which the appellant received the completion notice or notice that the penalty had been imposed.
2) The notice of appeal must be accompanied by—
a) a copy of the completion notice or the penalty notice,
b) a statement of the grounds on which the appeal is made, and
c) where the appeal is against the imposition of a penalty, the date on which the person received notice of the imposition of the penalty.
3) If the person provides the notice of appeal to the VTE later than the time required by paragraph (1) or by an extension of time allowed under regulation 7(3)(a) of the Valuation Tribunal for England (Council Tax and Rating Appeals) (Procedure) Regulations 2009(a), the notice of appeal must include a request for an extension of time and the reason why the notice of appeal was not provided in time.
For Wales, Regulation 20 in Part 4 of The Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2005 SI No 758 (W.63) directs that:
1) “An appeal against imposition of a penalty shall be initiated by serving on the clerk of the relevant valuation tribunal a notice in writing (a ‘notice of appeal’) accompanied by -
a) a copy of the penalty notice; and
b) a statement of the grounds on which the appeal is made and the date of service of the notice of the imposition of a penalty.
2) The clerk shall, within two weeks of service of the notice of appeal, notify the appellant that he has received it, and shall serve a copy of it on the valuation officer whose notice is the subject of the appeal.”
Aggrieved persons must therefore contact the VTS directly if they want to appeal against the imposition of penalties: the VOA is not involved in the administration or processing of appeals. The clerk to relevant valuation tribunal is able to provide an appeal form directly to an aggrieved person and the relevant tribunal goes on to wholly administer the appeal process. The appeal form requires the appellant to attach a copy of the penalty notice against which he is appealing, as directed in the above Regulations. From this, the Tribunal will, amongst other things, ascertain whether the appeal has been made within 28 days of the first penalty notice. VOs should receive a copy of the appeal within two weeks of service from the clerk of the relevant tribunal, as directed in the above Regulations.
An appeal must be made to the relevant valuation tribunal within 28 days. On receipt of the copy appeal from the valuation tribunal, VOs must check that the appeal has been made within 28 days of the service of the penalty notice: if not, the clerk must be contacted immediately and the timeliness of the appeal questioned. Under the 2009 Regulations, the VTE has discretion to consider appeals made out of time, at least as far as England is concerned.
If the appeal has been made within 28 days, or following challenge by a VO it is clear that an extension of time is accepted by the VTE (in England), VOs should send the valuation tribunal an acknowledgement of receipt, enclosing any information and supporting papers they believe will assist the tribunal. Valuation officers should also consider the grounds of appeal and send a letter to the appellant seeking early discussions and if appropriate, requesting the speedy return of the information requested. An example of this initial letter to be sent to an appellant is shown at Appendix 8. This early contact is not only an attempt to achieve resolution of the issues at the earliest opportunity; it will also help minimise accruing penalties if the form has not yet been returned.
Although copies are forwarded to the Valuation Officer for consideration and hopefully resolution, appeals are made directly to, and ultimately determined by, the Valuation Tribunal. Sub-paragraph 5C(5) of the act provides the VT with the power to mitigate (reduce) or remit (cancel) any penalty if it is satisfied on either or both of the grounds specified in sub-paragraph 5C(6) of the Act.
Those grounds are –
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that the appellant had a reasonable excuse for not complying with Paragraph 5(2) of the Act, which is not supplying the requested information in such form and manner specified by the VO
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that the information is not in the possession or control of the appellant
If an appeal against a ‘penalty notice’ is listed for a hearing at a valuation tribunal, it is expected that the Valuation Officer or a person authorised by the Valuation Officer, as respondent, will attend such a hearing as appropriate.
No claim to recover penalties as a civil debt may be made before the end of the 28-day appeal period, or, if an appeal is made against the imposition of the penalty, before the appeal is finally disposed of.
Where practicable after all relevant notices have been served and letters issued, and when faced with no response whatsoever, VOs should aim to take some further action. This applies predominantly where a person on whom an FOR and Penalty Notice (PN1) is served has:
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been sent the Further Rating Penalty Notice (PN2)
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not returned the Information requested on the FOR
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not made an appeal to the appropriate valuation tribunal within the 28 day time period
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not made any contact with the Valuation Officer
In such instances, VOs may consider taking reasonable steps to alert that person that penalties are accumulating at the rate of £20/day. Where appropriate, such steps could include:
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alerting anyone who has recently acted on behalf of the person on a related matter (e.g. in respect of a rating appeal)
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alerting the head office of a registered company
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alerting a person at the actual property address
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alerting the person to whom the rate bill is sent
It is hoped that taking such action would result in the return of the information requested, which would in turn stop penalties accruing. VOs should aim to do this around the same time as papers are sent to The Civil Penalty Recovery (CPRU) team at CEO Financial Operations Unit (FOU) (see paragraph 12 below).
However, the penalty recovery process should not be unduly delayed whilst VOs take any further action to recover the information. This means that once the papers have been sent to CPRU, for recovery, they will assist and advise in gathering any information still not provided. The VO still retains responsibility for providing any further papers (or copies thereof) to the CPRU team to enable them to progress the recovery procedures as expeditiously as possible. This should result in the person responsible for providing the information being in little doubt about the information expected from them. If successful in making clear to the potential respondent the importance of their supplying the information, this not only results in the VO having the information he believes will assist him, but it will also have the added benefit to the respondent of stopping the penalties accumulating.
The Civil Penalty Recovery Unit (CPRU) team at CEOs Financial Operations Unit (FOU), based in Durham, is responsible for the administration, collection and pursuit of penalties owed to the Valuation Officer. They are authorised by the Valuation Officer to do this and CPRU need to be provided with enough information to both alert them of the likelihood they may be receiving penalty monies, and also enable them to take necessary recovery action for non-payment of penalties due.
To begin the civil penalty recovery process, CPRU Team will run monthly downloads on PN1s issued. This notification can be on an individual or batch basis. (See Appendix 9 for batching guidance.) Notification should be sent to CPRU at between 33 days and 40 days following date of issue of PN1 to help ensure timely and seamless correspondence with the taxpayer and minimise accruing penalties. In all correspondence with CPRU, Data Teams must ensure the FOR reference number of each case is present, including the three digit group suffix (in many cases these numbers will appear on the various printouts or copy correspondence as a matter of course).
Notification where no appeal against the penalty is made:
Where no appeal to the Valuation Tribunal has been recorded, on the 33rd and before the 40th day following the date of issue of the Penalty Notice (PN1), CPR will require:
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a copy of a relevant Record of Events form (VO 7324), marked ‘For Recovery’ and signed in manuscript by or on behalf of the Valuation Officer
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a copy of the penalty notice (PN1)
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a copy of the front page of the FOR
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details of any searches on companies house or focus, where available
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any other relevant papers connected to the case
Note: If no copy appeal has been received by the VO by the 33^rd^ day following the issue of PN1, you should ascertain by telephone whether the Valuation Tribunal has received any appeal. (Note: The Valuation Tribunal Service (VTS) should, within two weeks of receipt, inform VOs of any appeals made against the imposition of a penalty).
Where an appeal against the penalty is made:
**Where an appeal against the penalty is made – no civil debt recovery action can be taken until the appeal is disposed of. Therefore, in such cases the papers should not be sent to CPU for recovery until the VT has made their decision. **
Unless the appeal is wholly successful and the Tribunal remit the penalty, CPRU will require:
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if appropriate, details of any withdrawal of the appeal
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if appropriate, details of any mitigation or remittance of penalties made in settlement of the appeal
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if appropriate, a copy of any VT decision
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a copy of a relevant Record of Events form (VO 7324), marked ‘For Recovery’ and signed in manuscript by or on behalf of the Valuation Officer
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a copy of the penalty notice (PN1),
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a copy of the front page of the FOR
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details of any searches on companies house or focus, where available
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any other relevant papers connected to the case
Note: Because the further £100 penalty together with the £20 per day penalty starts 21 days after the service of PN1, it is important that no unnecessary delays in the issue of papers to court occur.
If payments are not received and there is no outstanding appeal to the Valuation Tribunal, CPRU will issue final demands. If the penalties are not paid in full, CPRU will take appropriate action to recover any sums outstanding as a civil debt owed to the Valuation Officer, acting on his behalf. This applies whether the penalties are continuing to accumulate or not.
Any penalty (cheque etc.) received in error by Groups should be recorded in accordance with any local opening of post procedures. The amount (or cheque etc.) received should be immediately forwarded to CPRU, together with a copy of the Penalty Notice to which it relates.
All cases should be dealt with promptly with the aim of keeping delays or misunderstandings to a minimum. All pertinent telephone calls/conversations etc. should be recorded and forwarded to CPRU to provide the fullest picture possible, especially if the case involves a claim in the County Court. By ensuring good communications between the Valuation Officer’s Data Teams and the CPRU team, debt recovery action is dealt with as efficiently as possible. CPRU and Finance have their own protocols in dealing with debt recovery and the County Courts; these protocols should be adhered to in any dealings with CPRU in respect of liability to penalties.
Any sums received by way of a penalty must be paid into the Consolidated Fund.
Paragraph 5A of Schedule 9 to the Act allows a person on whom the FOR is served 56 days to return the information requested to the satisfaction of the valuation officer and it is hoped that most forms are satisfactorily returned within this timeframe. Valuation Officers are clearly more interested in obtaining the information they need than in the pursuit of penalties, but failing to supply the information within 56 days brings liability to a penalty of £100, which may be pursued on service of a ‘penalty notice’.
For the sake of clarity it is considered that the date of return is when either the completed FOR is received:
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by post at an office overseen by the Valuation Officer concerned
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at an office dealing with the issue and receipt of FORs on the VO’s behalf
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at a return address designated for that purpose on the FOR
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at a return address shown on a pre-paid return envelope enclosed with the FOR and specifically intended for the purpose of returning the FOR or
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by electronic means, using a method provided by the VOA on the web-site (but see the note below concerning electronic and alternative methods of return of information)
In other circumstances, assuming it represents a satisfactory return of information requested, the date the FOR is properly received at the offices of the appropriate Valuation Officer will be taken as the date of return (for the particular purpose of checking whether liability to a penalty has arisen).
A further Note concerning Electronic and Other Methods of Return of Information:
The RALD is completed on-line using the VOA website. Where other FORs available from the VOA website are returned electronically (normally by pdf’s provided), they must be sent to the appropriate e-mail address provided on the original form itself or an e-mail address shown on any associated reminder correspondence. If the correct e-mail address is used, the date of ‘delivery’ to the appropriate ‘in-box’ will be taken as the date of receipt, whether the time of arrival falls within official working hours or not.
However, other e-mail addresses, such as those of individual officers within the VOA (whether or not they are situated in the relevant VO’s offices), are not recommended for returning information and/or completed FORs. Such alternative e-mail addresses are not designated for the purpose of returning information to a Valuation Officer because the information is not guaranteed to reach him or her in a timely manner via those routes. Returning Information in a manner that is not recommended may well result in a delay and liability to an initial penalty or further penalties. The same rationale applies to faxed and scanned documents.
As stated above, where in response to an FOR information is sent by via a route other than shown in the ‘bulleted’ list above, the date return of information will be taken as the date a satisfactory supply of information is properly received at the offices of the appropriate Valuation Officer.
Once the information is received to the satisfaction of the VO it should be registered as returned. If supplied within the 56-day period, liability to a penalty does not arise and therefore no further action is necessary in respect of penalties. If supplied once the 56-day period has passed, there is nothing to prevent the Valuation Officer serving a penalty notice at any time thereafter.
If information requested on a FOR is received following the service of a penalty notice, it is anticipated that all penalties accrued from that date would be pursued.
VOs are reminded that where further information is requested because a returned FOR has not been completed correctly (paragraphs 6 and 7 of this section of the Rating Manual), and a penalty notice has been served, penalties continue to accumulate. It is important that payment of penalties due is encouraged as appropriate and any necessary County Court action in these cases must not be stopped until VOs are happy that the form is completed to their satisfaction and any relevant outstanding penalties are paid in full.
Under Paragraph 5B of Schedule 9 to the Act, a Valuation Officer may mitigate [reduce] or remit [cancel] any penalty imposed under paragraph 5A. However, if the procedures detailed in this section of the Rating Manual are followed, such action will rarely be appropriate, especially where the ‘penalty notice’ is simply the trigger which results in the FOR being returned.
It should be stated from the outset that there must be mitigating circumstances before remission or mitigation be considered. It is not considered acceptable for VOs to remit or mitigate a penalty without good reason.
There is a statutory right of appeal against a penalty notice, which must be made directly to the Valuation Tribunal (VT) within 28 days of service. Those aggrieved against service of the penalty notice therefore have a route to seek a remedy at the VT, where their concerns can be considered.
Within two weeks of receipt, the VT is required to send the VO a copy of the appeal, who should consider whether the grounds of appeal have any merit. If the VO believes they do, the appellant should be informed directly and appropriate mitigation should be offered or full remission afforded as considered appropriate by the VO. If the grounds do not persuade the VO to consider remission or mitigation, it is hoped that the Valuation Tribunal progress the appeal to a hearing without undue delay. This assists where penalties are accruing.
Although often cited as a reason, it is not considered acceptable to remit or mitigate penalties merely on the grounds that “the penalty notice and completed FOR have ‘crossed in the post’” (see paragraph 9 above). Liability to a penalty of £100 arises where the information is not supplied within the period of 56 days and a penalty notice can be served at any time after that, irrespective of when the FOR is eventually returned. As long as the penalty notice is served after the 56-day period specified, the person on whom it is served is liable to a penalty of £100 whether the returning FOR and outgoing penalty notice has crossed in the post or not.
14.1 When to Remit or mitigate a Penalty:
It is important to remember from the outset that a penalty is imposed as a result of non-compliance; although it may become apparent in individual cases that there is good reason for late or non-supply, until such reasons are shown, it was reasonable for the VO to expect the information requested to be supplied within the statutory 56 day period allowed by parliament. It follows that, unless there is good reason to indicate otherwise, properly imposed penalties for non-compliance will be pursued.
14.2 Delivery and/or addressing cited as a reason for Remission or Mitigation:
The imposition of the penalty notice and the service of the FOR may so flawed as to make it wholly unreasonable to expect the person on whom the penalty is imposed return the information, or even know it was requested in the first place; an example is where the recipient’s name and /or address is completely wrong. In such instances remission must be considered.
There may be other occasions when a VO decides that it is appropriate to remit the penalty. For example, this might be where a person no longer holds the information and has provided a detailed statement of the circumstances when it was last held.
However, it is more often the case that the name of the person and the address of service in respect of the FOR and penalty notice are reasonable, and there are no particular mitigating circumstances. For example, if a postcode in the address for service has an incorrect last letter or digit it is highly unlikely to be cause for mitigation (The last two characters of a postcode are not part of the postcode ‘map’ and as long as other parts of the address are correct, delivery is in most cases unlikely to be affected. It is a different matter if the first two characters are incorrect, as these are location sensitive). All similar cases citing poor service should be subject to careful consideration before any mitigation or remission is offered, particularly if the notices and letters are not returned to the VO undelivered.
14.3 Other Grounds Cited for Remission or Mitigation
In instances where it is clear the FOR and penalty notice has reached the intended person, reasons to consider remission or mitigation may remain. In such instances it is expected that the information requested is supplied to the VO before meaningful consideration is given to mitigating circumstances.
14.4 Particular concerns when considering Mitigation
In instances where full remission is inappropriate, VOs will find it quite difficult to quantify a reduced penalty to reflect mitigating circumstances. In most cases a decision will very much depend on the facts, weighing up the limited grounds of mitigation against the unnecessary delay in returning information.
When a VO decides there are mitigating circumstances that warrant a reduction in the amount owing, he or she has to decide to what extent the mitigating circumstances reduce the penalty owed. This is often quite difficult in practice, as it requires the VO to make a cost judgement for a whole range of potentials reasons. These reasons may range from slight flaws in the way the VO has dealt with the matter, to personal problems or issues cited by the person on whom the penalty notice is served, some of which may appear almost or wholly incidental to the service of the FOR and penalty notice.
Quite often VOs are asked to mitigate before the information is returned. Clearly it is inappropriate in those cases to offer mitigation until the information is returned. In such cases, VOs should ordinarily take the position that only when the information requested is returned satisfactorily will he or she may consider mitigation for the reasons stated. It is not recommended that VOs specify a figure in mitigation before information is returned unless it is made conditional on a specified date of return in the future; in other words there are sufficient grounds for the VO to offer a limited ‘window’ of mitigation within which information may be returned, after which the daily penalties will continue to accrue. An example of this may be an unfortunate family crisis which affected two weeks during the £20/day accruing penalty period. Assuming there is no excuse for the delay (and therefore penalties accrued) up to the crisis occurring, the VO may offer a person a few weeks grace to return the form, effectively freezing the accrual of penalties for a short while only. Whether the information is returned or not, the VO should still collect the penalty, albeit mitigated by an amount to reflect the particular circumstances.
Once information is returned, a VO may decide there is good reason to mitigate a penalty further, for instance where the information requested is particularly detailed and the amount produced makes it clear that more time was reasonably required to produce it. An example might be a request for the building costs in respect of a newly built oil refinery that resulted in a full breakdown and other information, such as CAD drawings, being produced.
However, irrespective of the difficulties or involved nature of the information requested, any unilateral mitigation (reduction) of penalties should not be contemplated until the information requested has been provided to the satisfaction of the VO.
14.5 Valuation Tribunal Decisions in respect of Civil Penalty Appeals
Although Valuation Tribunals (VTs) do not have absolute discretion, and have to consider the situation on two specified grounds, VTs’ decisions in respect of Civil Penalty appeals provide useful guidance in respect of many issues and contentions involved.
VT decisions in respect of civil penalty appeals are available from the individual VT concerned. As well as VT decisions, there are also many instances where requests for mitigation have been discussed and determined, often with the agreement of both parties. Such instances of past resolutions and previous VT decisions may provide assistance to a VO in the best way to progress matters. However, if the VO is faced with new, unusual or unprecedented grounds to remit or mitigate in individual cases, he or she should discuss the facts of the case with Director of Rating and Head of Profession at CEO.
14.6 How to Remit or Mitigate a Penalty:
Irrespective of whether an appeal is made or not, the VO has absolute discretion to remit or mitigate. Once the VO is convinced it is appropriate to remit or mitigate a penalty, the decision must be communicated to the person from whom the penalty is owed (whether the person is in agreement with the VO’s decision or not). Additionally CPRU must be informed so that recovery efforts can be stopped or adjusted as appropriate. In particular the following should be considered:
14.6.1 Remission (when a VO decides to remit a penalty):
When a VO decides to remit a penalty, the penalty is completely wiped out and it is an end of the matter as far as the penalty for late or non supply is concerned. Subsequently, any appeal made against the penalty notice falls away and, together with the appellant, the VT must be informed of the remission of the penalty.
14.6.2 Mitigation (when a VO decides to moderate the amount of penalty to a lower figure):
When a VO decides to mitigate a penalty, he or she will write to the person who owes the now reduced penalty to clearly set out the new amount owed. This is recommended whether mitigation is a unilateral decision by the VO or an agreed figure between the parties.
Although a VO can decide an amount in mitigation unilaterally, it is considered good practice to discuss mitigating circumstances directly with the person seeking mitigation. In doing so, VOs may find it easier to weigh up the mitigating circumstances and arrive at an appropriate level of penalty that takes mitigating circumstances into account, hopefully with a measure of agreement. The nature of ongoing penalties at a daily rate of £20 assists in these considerations as it allows any time period cited as grounds for mitigation to be readily quantified, subject of course to those grounds for mitigation being accepted as reasonable.
If mitigation is offered before recovery action has commenced, it is important to inform all interested parties and make it clear how the penalty is to be paid. If CPRU has already been instructed to recover the penalty, it is recommended that they continue to collect the reduced amount.
In all cases where a VO does remit or mitigate any penalty, a letter should be sent from the VO to the person on whom the FOR was served setting out why in the particular case the VO has decided to remit or mitigate the penalty (with a copy to the VT where an appeal is outstanding). In addition, CPRU at CEO must be advised immediately of any such decision to remit or mitigate.
Where the query relates to any form not yet available on the Website, or the person simply does not have access to the Internet, requests from persons receiving reminders or penalty notices or their agents for a duplicate copy of FORs should be complied with immediately. These should be sent by first class post to give them the opportunity to complete and return the FOR as quickly as possible.
Practically speaking, duplicate FORs sent by post could either have the details pre-printed on labels produced by the RSA System, or the details hand written before despatch. It is considered that hand written details will only be required under exceptional circumstances.
In all cases duplicate forms should include the FOR number, the person on whom the FOR is served and both the property and correspondence addresses, even if these are one and the same. Those respondents completing forms via the VOA website facility, whether on-line or a hardcopy printout of other forms, will be expected to complete these identification details before returning the information.
When printing duplicate FOR labels from RSA, care needs to be taken to avoid resetting the system dates. This can be achieved by adopting the following procedure, which will produce another label but does not affect the original time limits on reminders, etc. Should the information not be returned, the clock is still counting down to the issue of warning letters and Penalty Notices from the issue of the original FOR:
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hot key from Amend Case Details screen
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press Control + F5
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press Control + F7 to Re-issue screen
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without moving the cursor at all, then press F10
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F10 commits production of label
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F12 to exit
It should be remembered that if it turns out that the FOR is inadvertently ‘re-issued’, when in reality only a duplicate copy is required, ongoing information (and penalty) recovery action is not prevented. Although registered prematurely as ‘returned’, future elements of automated RSA support such as reminders and penalty notices can still be dealt with manually; this means that the pursuit of missing information and any collection of penalties due can and should continue as appropriate. Electronic templates of letters and notices are available in the usual VOA forms lists.
The majority of rental information is likely to be recorded and stored directly on RSA, which offers the facility for further adjustment and analysis support as required; RSA also allows reports and enquiries as appropriate. Other more specialised information supplied on FORs must be held in the appropriate place to allow it to be fully utilised as required.