Buildings in the same occupation as agricultural land and jointly controlled and managed with it are exempt from business rates.
The Upper Tribunal (Lands Chamber) has considered this issue, allowing an appeal from the Valuation Tribunal of England in Fridays Ltd v Dawn Bunyan (Valuation Officer) [2024] UKUT 149 (LC).
The headquarters of Fridays, one of the UK’s largest producers of free-range eggs, was Chequer Tree Farm in Kent, comprising around 530 acres including arable land. The issue was whether three buildings at CTF – the egg packing centre, the egg packaging store and the egg warehouse – should be exempt from non-domestic rating. If they were exempt, an assessment of them as a “food processing centre and premises” was agreed at £136,000; if they were not, the agreed figure was £325,000.
The regulations governing egg production for human consumption meant that for Fridays to operate its business from one site would require more than 400 acres and no such suitable site was available. Consequently, the business had created a collection of sites in a 10-mile radius, including four farms where free range and organic eggs were produced.
At CTF, arable land was used for barley and wheat which was milled on site and fed to hens at other holdings and eggs from other holdings were packaged at CTF. The other holdings were managed from CTF where all planning and management decisions relating to the business were taken. Staff at the other farms were managers looking after the chickens on a day-to-day basis.
Fridays argued the three buildings were agricultural buildings occupied together with agricultural land and used solely in connection with agricultural operations on that or other agricultural land* within 3(a) of Schedule 5 to the Local Government Finance Act 1988 and exempt.
The VTE found there was no working together of the agricultural land and the relevant buildings as one agricultural unit as required by the test in Farmer (VO) v Buxted Poultry Ltd [1993] AC 369 so no exemption.
The Tribunal decided the 2003 amendment meant that “occupied together with” no longer required the land and buildings to be a single agricultural unit, distinguishing Buxted Poultry. If that was wrong, CTF and the four farms were an agricultural unit but CTF and its arable land were not.
Consequently, the three buildings were occupied together with CTF. They were in the same occupation at the same time; contiguous; and part of the same enterprise. They were also used solely in connection with agricultural operations on the land at the four farms.
Louise Clark is a property law consultant and mediator
