The Valuation Office Agency published its revised Rateable Values in April 2017, incorporating some significant increases (particularly for riding schools and livery yards). Business rates are generally calculated on the size and use of premises. Rural businesses, such as livery yards often require more space than office based businesses, and are hit disproportionately hard by their liability for business rates.
Many businesses feeling the pinch caused by business rates will inevitably look at ways to challenge their liability for business rates. It is therefore important to consider whether your rateable value is correct in respect of both the rental value of the property and any applicable reductions or exemptions which you might be entitled to.
The gov.uk business rates webpage allows you to compare the rateable value of your property with that of similar properties by inputting the postcode. The VOA allows one appeal per valuation cycle through its new, Check, Challenge, Appeal process.
It is important to consider that even if your property is deemed to be rateable, you may be able to run an argument that not your entire yard is “rateable”. There are a number of exemptions, which may reduce or eradicate potential liability for business rates.
“Agricultural land” and “agricultural buildings” are exempt from business rates. However, land which is used mainly or exclusively for the purposes of sport or recreation will not be classed as agricultural. It is the use of the land which is important, the purpose for which the land is occupied. Therefore grazing land (used only for grazing) occupied even by riding school horses will be exempt from rating. The stables, ménages, feed and tack storage areas, will, however, not benefit from the exemption.
Domestic equestrian facilities which are occupied together with a dwelling and which are used only for the horses of the residents of the dwelling are treated as exempt from rating. Therefore, if you operate a livery yard, but also keep your own horses in separate stables on the yard, you could seek to argue that those stables should be removed from the curtilage of the rateable property.
If your premises are used for breeding and/or rearing of horses or ponies, they may be entitled to business rates relief. This relief is referred to as stud relief and applies only to the number of stables or loose boxes used for stud use.
There also exists an exemption from liability for business rates for a property used wholly for the purpose of the provision of facilities for persons who are disabled.
Finally, you should remember that you may be entitled to a temporary reduction in your business rates if your business is effected by a change in the locality such as road closures, building works or a competitor opening close by.
We understand that the Royal Institute of Chartered Surveyors has an enquiry line for advice in respect of business rates, and that the first 30 minutes of advice is free.
Hannah Bradley, Equine Solicitor