Farmer obtains agricultural exemption from business rates for redundant retail warehouse used for storage
A recent case provides a helpful analysis of the conditions required for a building to qualify for the agricultural exemption from business and also shows, as always, it is important to consider the facts in any planning case.
The Upper Tribunal (Lands Chamber) has held that a redundant retail warehouse that a farmer used temporarily to store agricultural machinery and animal feed (silage) was an agricultural building for the purposes of the agricultural exemption from business rates.
The farmer in this case owned a redundant retail warehouse and had produced silage on 53 acres of adjoining pasture, which he also owned. Although, as well know, it is not normal agricultural practice to store baled silage indoors, the wrapped bales had been vandalised in the past when left on the pasture. In addition to the benefit of increased security it was also more convenient for the farmer to use the building to store silage taken from adjoining land than to transport it long distances at a particularly busy time of year.
Following a valuation which resulted in the valuation officer’s refusal to delete the building from the rating list for the relevant period, the farmer appealed to the Valuation Tribunal for England (Valuation Tribunal). His case was initially dismissed as the Valuation Tribunal found that:
- the building was not occupied together with agricultural land as “agricultural buildings connote buildings subsidiary or ancillary to or needed as a necessary aid to agricultural operations taking place on the land” and;
- the building was not used solely in connection with agricultural operations.
The farmer then took his case to the Upper Tribunal (Lands Chamber) (tribunal) which determined that the appeal should be allowed and that the building should be deleted from the rating list for the relevant period.
The tribunal found that the building was clearly occupied together with the adjacent pasture. Silage from the pasture was stored in the building, the farmer had created a new access between the two and he had erected a gate to secure both from intrusion. The use of the building was temporary, but it was substantial, beneficial and prolonged and the tribunal saw no reason to disregard it. Therefore the building together with the remainder of the farmer’s holding, was managed as a single agricultural unit. The farmer fed the silage stored in the building to cattle on other parts of his combined unit, he had used the implements and machinery kept in the building on other parts of the unit, and would either use them there again or re-use them for spare parts on other machinery there.
The tribunal was satisfied that the building was used in connection with the agricultural operation that the farmer carried out on his land, including the adjoining pasture in particular but extending also to the remainder of the farmer’s holding. The correct focus was on the use itself, not on the motive for the use or whether the farmer could have arranged his enterprise differently. It was irrelevant that it was not necessary for the farmer to store silage or machinery in the building. The presence of redundant shop fittings abandoned by the previous owner did not amount to use for storage of those items.
The exemption applied in this case, even though the farmer’s use of the building in connection with his agricultural operations was only temporary, was not necessary and might fairly be described as opportunistic.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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