Whether buildings occupied together with agricultural land are exempt from business rates requires the satisfaction of occupation and use tests. The Court of Appeal has considered this issue dismissing an appeal from the Upper Tribunal (Lands Chamber) in Dawn Bunyan (Valuation Officer) v Fridays Limited [2025] EWCA Civ 666.
Fridays, one of the UK’s largest producers of free-range eggs, owned Chequer Tree Farm, (CTF) Kent comprising around 530 acres of rural land much of which was exempt from non-domestic rating.
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. Consequently, the business had created a collection of sites in a ten-mile radius including four farms where free range and organic eggs were produced.
CTF grew barley and wheat which was milled on site and fed to hens at other holdings, eggs from other holdings were packaged at CTF. All business decisions including management of the holdings were taken at CTF.
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.
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” (a 2003 amendment) within 3(a) of Schedule 5 to the Local Government Finance Act 1988 and exempt.
The VTE decided there was no working together of the agricultural land and the 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 determined that the reference to “other agricultural land” 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 and the three buildings were occupied together with CTF.
The Court of Appeal decided that the ratepayer had to satisfy both an occupation test and a use test. The 2003 amendment had altered the latter but not the former. The tribunal’s interpretation of the occupation test was wrong but it had considered the correct question “Were the three buildings and the farms occupied together to form a single agricultural unit?” concluding that they were part of the same business enterprise and under common ownership and occupation.
Louise Clark is a property law consultant and mediator
