The Court of Appeal has today handed down its judgment in Rossendale BC v Hurstwood Properties (A) Ltd [2019] EWCA Civ 364, unanimously dismissing claims by local authorities that they were eligible to recover arrears of business rates from the owners of largely empty commercial premises who had utilised various business rates mitigation processes.
The conjoined appeals concerned two schemes designed to avoid the payment of National Non-Domestic Rates (NDR) on properties which in most instances were unoccupied. Both schemes involved the grant of leases of the properties to special purpose vehicle companies (SPVs) without assets or liabilities which, as part of the scheme in question, were then placed in voluntary liquidation or were allowed to be struck off the register of companies as dormant companies and thus dissolved.
The appeals raised two issues. First, was it arguable that the doctrine of piercing the corporate veil is applicable to the SPVs? Second, was it arguable that the leases fall to be disregarded by the application of the principles established by the decisions in W.T.Ramsay Ltd v Inland Revenue Commissioners [1982] AC 300 and later cases?
The Court of Appeal answered both questions in the negative.
Nicholas Trompeter (instructed by Chris Perrin of Addleshaw Goddard LLP) acted for the successful ratepayers.