This is a Group National Scheme Class. Responsibility for implementing the scheme as set out within this Practice Note lies with the Group, as does responsibility for ensuring effective co-ordination.
For further information see Rating Manual - Volume 2: Section 1
The Primary Description Code is MT2.
For Public Telephone and AA/RAC Kiosks the R2005 Special Category Code that should be used is 228. As a Group Class the appropriate suffix letter should be G.
Standard Description: Public Telephone Kiosk(s)
For Interactive and Internet Kiosks the R2005 Special Category Code that should be adopted is 141. As a Group Class the appropriate suffix letter should again be G.
Standard Description: Interactive Telephone Kiosk(s)
VO Notices should be sent to the kiosk operator's registered address.
In the event of any complex issues arising, the case should be referred to the CEO (Rating) telecoms team (Michael Hetherington) via the Group Technical Advisor.
A scheme of valuation was agreed in respect of public telephone kiosks located on the public highway for the 1995 Rating List with Gerald Eve who represent New World Payphones and IPM Inter-Phone. See 1995 Practice Note 1 for details of this scheme.
While there was no agreement for Reval 2000 the VOA scheme has been accepted by a major operator.
For "private" sites, such as motorway service stations, airports, railway stations and shopping malls etc the public highway scales was applied in the absence of contra-indications.
The number of public and managed payphones in the UK increased by almost 25% between 1993 and 1998. Since then, however, the massive expansion in mobile phone ownership has had a serious impact on the viability of these services.
Payphone operators usually negotiate rents with private landlords based on a percentage of gross receipts and install the kiosks at their own expense. These agreements often cover a number of sites run by the same landlord, motorway service station operators being a good example.
Interactive/Internet Kiosks – It is anticipated that this is a growth area. They are becoming more common and often offer freephone services with the operator’s income derived from a fee paid by advertisers. There has been a trend to convert some payphone kiosks to Internet/Interactive kiosks most notably at main line railway stations. Further details are required on these kiosks and FOR’s should be sent to the operator when any such a kiosk is identified off the public highway. It is understood that most of the sites are occupied rent free on the public highway because the operator has Telecom Code powers and for this reason no rents are available and FOR’s should not be sent to such kiosks.
It is important to remember that kiosks operated by Central Rating List telecom operators are excluded from this scheme as they are included in the central rating list valuations, see Rating Manual - Volume 2: Section 12, Practice Note 1; 2000, paragraph 3.5.
Kiosks operated by Kingston Communications in Hull are also excluded from the scheme, as they are valued on an overall Receipts and Expenditure basis and included with the Kingston telecom network.
Due to increased competition on call charges and the increased use of mobile phones it appears reasonable to work on the basis that revenues from payphones have continued to decline
It is also assumed that the cost of installing public telephone kiosks has increased from 1 April 1998 to 1 April 2003, but while this will impact upon the decapitalised average cost of installation of the rateable elements the final stage of “step back and look” would indicate that values will not have increased in the difficult trading environment. Thus it has been assumed that between the 2000 AVD and the 2005 AVD, the increase in the cost of installation that would drive values up is offset by the increased pressures on call charges and profit margins, which would drive values down. The 2000 scale values are therefore adopted for the 2005 rating list.
It is understood that Interphone have gone into liquidation but it is also believed that some, at least, of their kiosks have been taken over by another operator. It has been suggested by agents that some of the kiosk installations should be removed from the Rating List but this should be resisted unless the kiosk has been removed. Existing kiosks should be left in the rating list as long as the rateable parts, such as the hood or kiosk, remain. The fact the non-rateable phone may have been vandalised or removed is insufficient to warrant a deletion as, vacant and to let, it is assumed the hypothetical tenant brings in the non-rateable assets.
It is recommended that NRSI's be served on a sample of identified kiosks on "privately" located sites in order to ascertain the level of rental payments for such "private" sites. Details of any rents obtained should be sent on to Michael Hetherington at Durham VO. The 2002/3 levels of annual receipts are required directly from the operator. NRSI's should not be sent out on payphone sites on the public highway as there are no rents paid to occupy the public highway as the operator has Telecom Code Powers.
Cost information has been provided centrally.
To be profitable, as at 1 April 1998, it was estimated that a kiosk would need to take a minimum of £2,500 in annual receipts. No information is available at the present time on the level of annual receipts required to achieve profitability but for the purposes of the Revaluation it has been assumed that this figure remains unaltered. Therefore the bottom of the scale is loosely based on the average decapitalised cost of construction of rateable elements. The scale figure shown below should be applied to all kiosks where rental information is not available, such as kiosks located on public highways
2005 Rating List Scale of Rateable Values for Individual Public Telephone Kiosks Located on Public Land:
The scale values are broadly based on a percentage (6-10%) of gross receipts at 2003 levels, underpinned by a minimum value derived from the decapitalised average cost of installation of the rateable elements.
Gross Annual Receipts/Kiosk |
Rateable Value/Kiosk |
Rateable Value/Kiosk |
Up to £2,500 |
£150 |
£100 |
£2,501 to £3,500 |
£250 |
£200 |
£3,501 to £4,500 |
£350 |
£300 |
Above £4,501 |
£450 |
£400 |
The level of rateable value for any public telephone kiosk erected subsequent to 2003 will have to be estimated based on local tone levels. In the absence of a local tone, the assessment will be estimated at the higher scale level until such time as the level of annual receipts can be established and toned back to 2002/3 levels. Receipts where known should be toned by indexation using the RPI figures.
2005 List Guidance on Public Telephone Kiosks Located on Private Land
A valuation scheme has not been discussed for the Public Telephone Kiosks installed on private land such as at Railway and Underground Stations, Airports, Shopping Malls, Motorway Service Stations, Universities and Hospitals.
In the absence of rental evidence the public highway location rates should be adopted initially and details of the rental payments requested from the operators.
Contiguous Groups of Kiosks
For groups of contiguous Kiosks, the gross annual receipts are to be averaged for the group, then the appropriate scale figure taken from the table above and multiplied by the number of kiosks in the group to give the total RV.
For example:
|
Two contiguous box type kiosks. |
|
|
Kiosk No 1: Gross 2002/3 Annual receipts |
£1,820 |
|
Kiosk No 2: Gross 2002/3 Annual receipts |
£3,480 |
|
Total for Group: |
£5,300 |
|
Average Gross Annual Receipts: |
£2,650 Scale RV/Kiosk: £250 |
|
| |
|
Scale RV £250 x 2 Kiosks Total: 500 RV |
|
A valuation scheme has now been agreed with Gerald Eve for Interactive/Internet kiosks occupied by Centrale and Cityspace at £200 RV This figure should be adopted for all such kiosks
AA/RAC and certain other phones do not operate as public telephones and have a limited access to the service provider only. The AA/RAC phones do have a commercial value as access to the breakdown services is provided although with the increasing use of mobile telephones this factor is becoming less significant. These sites are also often located at remote road junctions and not in urban areas.
The AA phones installed inside a small pole at the side of the road are considered to be deminimis and these small pole mounted phones are gradually replacing the full box type AA/RAC kiosks.
The kiosk type AA/RAC phone sites should remain at RV £100 to reflect the remote locations and limited service. Other limited access commercial phone kiosks should also be assessed at £100 RV unless evidence to the contrary is available.
Emergency motorway phone sites are assumed to be part of the public highway occupation, struck with sterility and therefore should not be assessed.
Any enquiries via Technical Advisors to Michael Hetherington, Rating Directorate, CEO (based in Durham) on PN 3221032 or via Email to the “Mast Advice” inbox.