Paramount Control and Business Rates

 

Who really occupies and controls the property?

Where several businesses use different parts of the same building, it is not always clear whether each area should have its own business rates assessment. A lease, licence or rental payment does not automatically make someone the separate rateable occupier of a room, desk, workshop or storage area. The Valuation Office Agency (VOA) will examine who actually controls the space and whether that person can use it to the substantial exclusion of others. If the landlord or property operator retains overriding control, the premises may remain as one assessment. This is commonly described as paramount control.

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Business Rate Advisors Ltd reviews the occupation, agreements and practical use of the property. We can advise whether the existing rating assessment appears correct and prepare the evidence required for a property split, merger or other rating-list alteration.

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Request a free initial review

Send us the current business rates bill, a plan of the property and details of everyone using the premises. We will review the initial information and explain whether the occupation may support separate assessments or whether one person appears to retain paramount control.

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What is paramount control?

Paramount control concerns the person who has the overriding ability to control and use the property. More than one person may have permission to enter or use an area, but only one may be in rateable occupation of it. The key question is whether a particular occupier enjoys the premises for their own purposes to the substantial exclusion of other people.

 

The VOA will consider the facts of each case, including:

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• Who decides how the area is used

• Who controls access

• Whether the area is fixed and clearly identifiable

• Whether the occupier can exclude other people

• Whether the landlord can enter and use the space freely

• Whether the occupier can be moved to a different area

• Who provides the equipment, furniture and services

• The purpose for which each party uses the premises

• Whether the arrangement is stable or temporary

• What happens at the property in practice

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The written agreement is important, but it is not conclusive if the day-to-day arrangement is different.

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The main ingredients of rateable occupation

For a person or business to be treated as the rateable occupier, the occupation will normally need to be: 

 

Actual

The person must genuinely use or possess the property. A paper agreement without corresponding occupation may not be enough. 

 

Beneficial

The occupation must provide some practical benefit to the occupier. The benefit does not necessarily have to be financial.

 

Exclusive

The occupier must be able to use the premises for their particular purpose to the substantial exclusion of others.

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Sufficiently permanent

The arrangement must have enough stability and permanence to amount to rateable occupation. Very temporary or constantly changing use may not qualify. The VOA considers all these elements together. No single document or fact decides the position by itself.

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When might a landlord retain paramount control?

A landlord or property operator may retain paramount control where:

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• Occupiers are allocated desks or work areas but can be moved elsewhere

• The landlord keeps unrestricted access to the occupied space

• Rooms are not reserved exclusively for particular businesses

• Different customers use the same areas at different times

• The landlord controls how and when the premises are used

• The operator provides an integrated service rather than simply letting space

• The areas occupied by individual users are not clearly defined

• Storage units, pods or workspaces are operated as part of one overall business

• The arrangements are short-term, flexible or regularly changing

• Users cannot prevent the landlord or other customers from entering or using the area

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In those circumstances, the property may remain one rating assessment in the name of the person operating and controlling the premises.

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When might an occupier have separate control?

A separate assessment may be more likely where a business:

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• Occupies a clearly defined room, floor, unit or workshop

• Uses that area for its own business purposes

• Holds the keys or controls the access codes

• Can prevent other occupiers from using the space

• Keeps its own stock, furniture or equipment there

• Cannot be relocated by the landlord whenever required

• Has a stable occupation rather than an occasional booking

• Pays rent for that particular identifiable area

• Displays its own signage

• Exercises day-to-day control without interference from the landlord

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Separate entrances and solid walls can provide helpful evidence, but they are not essential in every case. Equally, a lockable door does not establish separate occupation if the landlord continues to exercise overriding control.

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How does paramount control affect a property split?

A property split replaces one rating assessment with two or more separate assessments. Before making that alteration, the VOA must be satisfied that the proposed parts are separately occupied and capable of being identified as individual rateable properties. A split may be refused where the supposed occupiers are merely sharing facilities or receiving a service from the property operator without exercising sufficient control over their allocated areas.

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The VOA may decide that:

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• The whole property should remain one assessment

• Certain areas should have separate assessments

• Shared areas should remain with the principal assessment

• The existing assessment requires a wider reconstitution

• Further evidence is needed before the occupation can be determined

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The correct outcome depends on the actual property, the identity of the occupiers and how the arrangements work in practice.

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What about connected or commonly owned companies?

The fact that companies share directors, shareholders or ownership does not automatically determine the rating position.

Limited companies are separate legal persons, but the VOA will still examine which company genuinely occupies each area and how much control it exercises. Creating several companies or occupation agreements will not establish separate rateable occupations if one person or business continues to control the entire property.

Relevant questions include:

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• Which company operates from each area?

• Which company employs the staff working there?

• Who owns the stock and equipment?

• Who pays the rent?

• Who holds the keys?

• Can each company exclude the others?

• Are the companies genuinely operating separate businesses?

• Does one person continue to manage the whole property as a single operation?

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The documents and the practical occupation should tell the same consistent story.

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What if facilities are shared?

Shared entrances, corridors, kitchens, toilets and reception areas do not automatically prevent separate assessments.

The important question is whether each business controls its own principal area. A building may contain separately occupied office suites while also providing shared common facilities.

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Plans should identify:

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• The exclusive area occupied by each business

• Entrances and access routes

• Shared corridors and staircases

• Kitchens, toilets and reception areas

• Storage and parking

• Doors, walls and internal partitions

• The occupier of each part

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The treatment of the shared areas will depend on who controls them and how they are used.

Who becomes liable for the business rates? The VOA is responsible for deciding how the property appears in the rating list. The local council separately decides who is liable for the resulting business rates bill. Where a landlord or operator is found to retain paramount control, the council may treat that person or business as the liable occupier of the main assessment. Where individual businesses have separate rateable occupations, the VOA may create separate assessments and the council will then consider liability for each one. The assessment and the council’s liability decision are related, but they are separate processes.

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What evidence will be needed?

Useful evidence may include:

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• The current business rates bill and VOA valuation

• A plan identifying each occupied and shared area

• Leases, licences and service agreements

• Details of rent or licence payments

• Internal and external photographs

• Information about keys and access arrangements

• Signage and business correspondence

• Details of furniture, stock and equipment

• Confirmation of who works in each area

• The date each occupation began

• An explanation of the services provided by the landlord

• Evidence showing whether occupiers can be relocated

• Previous correspondence with the VOA or council

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We consider the written agreements alongside what happens at the property in practice.

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How we can help

Our service can include:

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• Reviewing the existing assessment and VOA valuation

• Identifying the person who appears to be in rateable occupation

• Examining leases, licences and practical working arrangements

• Reviewing plans, photographs and access arrangements

• Distinguishing between exclusive and shared areas

• Assessing whether separate occupations genuinely exist

• Advising whether a split, merger or reconstitution is appropriate

• Preparing the supporting plans and factual statement

• Submitting the case to the VOA

• Responding to VOA enquiries

• Reviewing the resulting rating-list alteration

• Checking the corresponding council accounts

• Advising on Check and Challenge where necessary

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We will explain any weaknesses before recommending that a case is pursued.

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Why choose Business Rate Advisors Ltd?

Direct adviser contact

You will deal directly with Steve Adams or Mark Allen.

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Evidence-based advice

We examine the agreements, physical layout, access arrangements and actual occupation rather than relying solely on names or paperwork. 

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Clear advice about the likely outcome

Paramount control cases are highly fact-sensitive. We provide a realistic assessment of the position before recommending further action.

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Request a free initial review

Please send us:

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• The latest business rates bill

• The full property address

• A floor plan showing every occupied area

• The name of each occupier

• Copies of the relevant leases or licences

• Details of keys and access arrangements

• Recent photographs

• A brief explanation of how the premises are managed

• Any correspondence from the VOA or council

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We will review the initial information and explain whether the existing assessment appears correct.

Call Steve Adams on 07415 048643
Call Mark Allen on 07376 443943
Office: 01225 667747

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Click here for property splits or click here for property deletions