Johnson v The Salvation Army Trustee Company: office hall and prayer room exempt from rates

The Upper Tribunal (Lands Chamber) has held that a large hall used for weekly prayer meetings and a small prayer room in the Salvation Army's former London headquarters were used for purposes ancillary to office use, and are therefore exempt from non-domestic rating.

In Johnson (Valuation Officer) v The Salvation Army Trustee Company [2026] UKUT 370 (LC), Judge Elizabeth Cooke and Peter McCrea OBE FRICS FCIArb dismissed the valuation officer's appeal against a Valuation Tribunal for England decision. The rateable value of the property falls to £1.

The material day was 1 April 2017, when the ten-storey building housed up to 500 staff. It was common ground that the Salvation Army is an organisation responsible for the conduct of public religious worship, and that most of the building was exempt as offices under paragraph 11(2)(b) of Schedule 5 to the Local Government Finance Act 1988. That provision also covers premises used for purposes ancillary to office use. The kitchen, initially treated as non-exempt after a concession, was agreed on appeal to fall within the exemption. The live issues were a 180.78 square metre ground-floor hall and a 9.49 square metre prayer room on the ninth floor. Agreed valuations ranged from £1 if both were exempt to £57,000 if neither was.

The hall had a dais, a large cross, a lectern and a drum kit, and could hold 172 people, against 38 for the next largest meeting room. The prayer room contained a low table, a chair, a large cross and a notice board labelled "Prayer Wall". The tribunal accepted unchallenged evidence from the respondent's former head of facilities management that the hall was bookable by all staff for training, town halls, committee meetings and similar events, and was used far more for those purposes than for prayer meetings, which lasted up to an hour each week. It also hosted a Christmas carol service. The prayer room was open without booking for personal reflection by staff of any faith, and was provided to support employee wellbeing.

For the valuation officer, Luke Wilcox argued that ancillary use must be generic, meaning something found in offices generally, and that both rooms served the respondent's mission rather than its office function. He added that the hall's size and the regularity of its prayer use pointed to a primarily religious purpose, and warned against creating by a side-wind an exemption for private worship. Cain Ormondroyd, for the respondent, contended that the exemption should be read in a "reasonably liberal" manner, relying on W & JB Eastwood Ltd v Herrod (VO) [1971] AC 160, and that nothing in the statute required ancillary use to be generic.

The tribunal rejected the liberal construction argument. Eastwood concerned different statutory words in a different context and, in any event, went against the ratepayer. Nor did Church of Scientology Religious Education College Inc v Ricketts (VO) [2023] UKUT 1 (LC) assist, since it decided only that there was no scope for a restrictive approach to the concept of office use.

On the remaining points, however, the tribunal sided with the respondent. "Ancillary" was said to be "not a difficult word", denoting use that is subordinate, supplemental or incidental to office use. Toilets are essential, while kitchens and servery areas are not, yet both are ancillary. Paragraph 11(3) gives examples of office purposes but none of ancillary use, and the tribunal saw no basis for confining the latter to a generic or typical category. It followed that exempting a space used for private prayer, where that use is ancillary, does not create an unintended exemption for private worship.

Applying that test, the tribunal found the hall was primarily used for purposes agreed to be ancillary to office use. Its size was immaterial in a large building, and the additional use for prayer and carol services did not alter its primary use. The tribunal declined to enter the question of whether prayer amounts to worship.

The prayer room's neutrality or multi-faith character was described as a distraction. Provided for staff wellbeing and used by staff, it was no less ancillary to office use than the kitchen, and was also exempt.

The decision is final save on costs. Any party may seek permission to appeal to the Court of Appeal on a point of law.