So, someone does something which I do consider to be more than just a tad unkind.
Richard – a quick check with the Valuation Office Agency suggest you are not paying business rates on your Norfolk premises.
Is this tax planning, tax avoidance, tax compliance or tax evasion?
Either way, I’m sure one of the dreaded far right libertarians will be reporting it.
Apologies for being quite so public school about this but that\’s both being a sneak and playing the man not the ball.
No, that\’s naughty.
However, there really is something much more amusing about it all.
Ritchie is, as we all know, in the vanguard of the revolutionary movement to impose an entirely new definition of tax liability upon us all. Instead of us owing what the law says we should owe, what the law says in detail we should owe, he wants us to be subject to what the spirit of the law suggests we should owe.
So, on the subject of whether Ritchie should be paying business rates on his home office: the spirit of the law is really quite clear. Business rates apply to offices, this is an office, thus business rates apply.
However, that isn\’t what the letter of the law states. Here\’s the case that Ritchie himself refers to.
The Tully case, which turned into a major legal test case for home-workers generally, has now  been resolved. Mrs Tully\’s spare room, complete with airing cupboard and ironing board, is once again officially restored to its original status as domestic premises. At the same time, much of the confusion over business rates liability for home offices has been cleared up.
\”Thousands of home-based workers can breathe a sigh of relief,\” says Alan Denbigh, executive director of the Telework Association and himself a home-worker. \”It relieves uncertainty. The fact that business rates could conceivably be levied and back-dated caused many people concern, even though in practice there were very few cases like this one.\”
The Valuation Office, the branch of the Inland Revenue which assesses property for rates and council tax, also seems satisfied with the outcome of the Tully case, which was heard at an appeal by the President of the Lands Tribunal. \”It was a very significant case. What the President has done is clarified and extended the law. It\’s given the Valuation Office a bit more of a steer,\” says Tony Eden, a policy officer with the VO.
The tribunal ruling – in legal terms, broadly the equivalent of a high court judgment – suggests that home-based working using furniture and equipment of a kind commonly found in ordinary homes can be treated as a normal part of the use of a residential property. This means that home-based employees in situations like Mrs Tully\’s are highly unlikely in the future to encounter problems with business rates. As well as employees, the ruling also helps many self-employed people, including authors and consultants with offices at home.
So, far from meekly accepting the spirit of the law, that spirit needed to be clarified into what the law actually said, in detail, so as to determine who was subject to business rates and who was not. And as Ritchie goes on to say:
And using those criteria these no chance at all my premises should be business rated. For the record:
- There is no external signage of a business at my house;
- I have no business visitors to the premises;
- The office is not suitable to receive business visitors because it is not set up as an office;
- The room where I work is shared with my sons’ model railway – which takes up as much or more space as I do for my work – and they’re in here almost as much as I am as a result;
- The same room also is host to gardening and other domestic equipment;
- Nothing has been especially adapted for business use (although it has been for railway use) the room is (apart from fitting railway baseboards) as it is when I moved in;
- I do – admittedly – have a business telephone line – but mainly for broadband use. I’ve recently pondered getting rid of it as almost no one calls it any more – modern willingness to call mobiles on all occasions has made it irrelevant.
In other words – there is no chance these are business premises for rating purposes. Which is why they are not recorded as such.
So, d\’ye see? We should all obey the spirit of tax laws, not attempt to rely upon the pettifogging details of what the law actually says.
Except when it comes to determining the liability to business rates of the home office of a mild mannered retired accountant in Norfolk it seems.