One of the country’s biggest producer and packer of free-range eggs has won a court battle over the taxable status of three egg packing buildings on one of its farms.
Fridays Ltd produces more than 1.7m eggs a week across a number of farms in Kent and packs the at its headquarters, Chequer Tree Farm, near Tenterden. It also packs around 1.4m eggs a week on behalf of local producers.
The egg weighing, grading and packing process takes place in three buildings: the egg packing centre; the egg packing store; and the egg packing warehouse. The tax dispute is whether the egg packing buildings qualify for agricultural exemption from business rates. If they do, their rateable value is £136,000 and if they don’t it’s £352,500. Fridays maintain they do. HMRC maintain they don’t.
The dispute stems from the fact that the egg packing buildings aren’t on a poultry farm. Chequer Tree Farm packs eggs and grows barley to feed chickens on other farms. There are no hens on Chequer Tree Farm.
The ruling centres on paragraph 3 of the Local Government Finance Act of 1988 which states:
“A building is an agricultural building if it is not a dwelling and… it is occupied together with agricultural land and is used solely in connection with agricultural operations on that or other agricultural land.”
The case was first heard in the specialist Upper Tribunal which found that the buildings were entitled to tax relief. HMRC appealed and the case was heard in the Court of Appeal earlier this month. And today the Court of Appeal handed down a ruling confirming that the buildings did indeed qualify.
According to the judgment, written by Lord Justice Lewison, HMRC’s lawyers argued that the three buildings were an egg packing business that was part of the same business enterprise as a poultry farm and was on land unconnected with egg production.
However, the Court of Appeal agreed that as egg production is a highly regulated business and eggs cannot be sold without being weighed and graded, the Upper Tribunal was entitled to find that the activity was “sufficiently connected with agricultural operations on that agricultural land.”
Bunyan (VO) v Fridays Ltd
Court of Appeal (Lewison LJ, Asplin LJ, Coulson LJ) 22 May 2025
