Rating Manual section 6: valuation practice

Part 5: practice note 1 - plant and machinery

The Valuation Office Agency's (VOA) technical manual for the rating of business (non-domestic) property.

1. Introduction and scope of practice note

This practice note provides comment on the Plant and Machinery Regulations currently applicable, together with guidance on interpretation.

Key point

It is the Plant and Machinery Regulations that set out which items of plant and machinery will be rateable. The VOA Cost Guide does provide outline guidance as to the rateability of most items, as a first point of reference. What follows is a technical commentary. It would greatly assist the reader if a copy of the Regulations were on view to study while reading the following guidance. The Plant and Machinery Regulations contain four ‘regulations’ followed by a ‘list’ of items split into ‘Classes’.

2. The Regulations

Regulation 1

England

The Valuation for Rating (Plant and Machinery) (England) Regulations 2000 SI 2000 No. 540, extends to England only and states that the Regulations come into force on 1st April 2000.

Wales

The Valuation for Rating (Plant and Machinery)(Wales) Regulations 2000 SI 2000 No. 1097 ( W.75 ), extends to Wales only and states that the Regulations come into force on 1st April 2000

The following commentary is equally applicable in both England and Wales.

Regulation 2: prescribed assumptions as to plant and machinery

This regulation stipulates that for the purpose of determining the rateable value of a hereditament for any day on or after 1st April 2000, any such plant and machinery as belonging to any of the classes set out in the schedule shall be assumed to be part of the hereditament. Thus unless an item of plant and machinery can be identified with an item named in the schedule it cannot be rated and valued as part of the hereditament.

The actual wording in 2 (a) is “ plant and machinery which belongs to any of the classes set out in the Schedule to these Regulations “. Within the Schedule to Regulation 2 some items are specifically described i.e. air compressors, whereas some items, although correctly described, use a language that is not so common today. i.e. continuous and alternating current dynamos = dc and ac generators.

The Schedule describes some items as “ systems” i.e. fire and explosion protection and suppression systems, security and alarm system, a pipe or system of pipes ; where several items, not specifically named, make up a particular system. In Class 4, where listed items are of a more specific nature, it is still acceptable to consider an item whose common name may not appear on the list but whose generic name does. In the case of Elliott’s Bricks Ltd v Hartley (VO ) 1990 LT RA 161 a vessel for holding liquid gas was deemed rateable although a vessel holding liquid gas was not specifically listed as a qualifying item.(1989 P & M Regs). Even though the item was purchased as a vessel, and the receipt was produced to prove this, the Lands Tribunal Member ruled that the family name for the item was a tank and as such is named in Class 4 and thus rateable. The LT Member was of the view that the lists of items in class 4 are not mutually exclusive and failure to qualify under one head does not preclude inclusion under another.

Any such item belonging to any of the classes set out in the Schedule forms part of the hereditament.

2 (a) (i) any such plant or machinery is part of the hereditament;

It should be noted here that the word “ or “ is used stressing the item may be an item of plant, and this would include not only fixed inert plant but also civil plant such as foundations et cetera, or, a mechanical item such as an air compressor or a wind turbine.

In applying the above attention must be paid to 2 (a) (ii) and 2 (b) where it states that the value of all other plant and machinery ( i.e. that is not included in the Schedule ) must be assumed to have no effect on the rental / rateable value of the hereditament. The wording of 2 (a) (ii) does not envisage any removal of the non- rateable plant but that any value effect of its continuing presence is to be ignored.

2 (b) emphasises that value of plant or machinery for any particular assessment must be based on those items in or on the hereditament and the value will not be subject to items of plant or machinery on adjacent hereditaments nor should they influence the rent estimated on other hereditaments.

Regulation 3: supply of written particulars

This Regulation concerns the formal route open to ratepayers to request a statement from the VOA as to what items of P & M are included in the assessment of a hereditament.

While there is no prescribed form a sample form is provided below, which can be copied and used if required. A little more detail is set out in Rating Manual, Volume 4, Section 3 (note the footnote on the form which is intended to cover plant and machinery present on the hereditament but not explicitly valued).

Particulars of plant and machinery showing what plant and machinery, or whether any plant and machinery, has been assumed in pursuance of regulation 2(a) to form part of the hereditament.

Billing Authority Assessment No.

Name of occupier

Description of hereditament

Address of hereditament

Assessment in Rating List RV £………………

Plan number

Description of
Plant and Machinery

Location on site

     
     
     
     
     
     

The following plant and machinery, where appropriate, and, where applicable in addition to, the plant and machinery particularised above, has been assumed in pursuance of regulation 2(a) to form part of the hereditament:- foundations; settings; lifts; escalators; and, plant and machinery used in connection with the main transmission of power in or on the hereditament together with plant and machinery used in connection with services to the hereditament or part of it for heating, cooling and ventilating; lighting; draining; supplying water; and protection from fire or other hazard.

Date Signed ………………………

Valuation Officer

Regulation 4: revocation and savings

This regulation revokes the 1994 Regulations from and including 1st April 2000. The 1994 Regulations are those applicable for plant and machinery valuations before that date.

The Schedule under Regulation 2 then follows:

The Classes : Classes of Plant and Machinery to be Assumed to be Part of the Hereditament

Key point

It must be remembered that rateability of an item of plant may occur within any (or more than one) of the four Classes. The first case heard under the first 1927 P & M Order affirms this. See:

**Union Cold Storage Company Ltd. v Assessment Committee of the Metropolitan Borough of Southwark [1932] R & IT 160. **

Hence exclusion from rateability in one Class will not preclude rateability in another.

Class 1

Power plant

The plant and machinery which is assumed to be part of the hereditament, and which falls to be rated as being within Class 1 of the Schedule to Regulation 2, can be summarised as Power Plant, i.e. plant which provides power in or on the hereditament.

However, whilst as a general statement it can be said that power plant is rateable, in fact the Class is specific as to which plant is to be included. Indeed not only is there a basic requirement for the item of plant and machinery to belong to the class, but the rateability of an item will depend on its use, or intended use, and whether it is used mainly or exclusively in connection with power in or on the hereditament.

Standby plant

When talking about certain items of Class 1 plant the emotive word “standby” is sometimes used or argued, in support of some form of disability or idea of not being required. Standby means, “ stand ready “ – “ be on alert “ which is exactly what the Regulations are implying in “ intended to be used “. Thus if the item is “ intended to be used “ in connection with the provision of power then it should be treated no differently from a similar item which at the same point in time is being used for the provision of power. ‘Intended to be used’ is clearly open to interpretation and could be construed to relate to the intended use of the item if in fact it is being used for some other purpose, however, both constructions are considered equally appropriate.

Derelict and unused plant

Plant which is derelict and incapable of use, or which is clearly no longer required due to changes to the remainder of the hereditament may require an adjustment to value to be made. Consideration of the wider impact of the Statutory repairing assumption in the context of the hereditament as a whole, may lead to a conclusion for a reduced or nil value on the item of plant concerned. However, if the plant is not used due to the whim of the actual occupier or the property is not being occupied the item would be rateable if it is capable of use and would be required by the hypothetical tenant.

Use for power purposes

Key point

For an item to be rateable under this Class it must be mainly or exclusively used in connection with the generation, storage, transformation or transmission of power.

For some items this test is without question i.e. a battery is always used for power purposes, whereas a steam boiler may be used in part for power purposes, part heating and part the manufacturing operation. It may therefore be considered under Class 1, Class 2 and Class 4. Each Class is a separately identified section in the Schedule and are mutually exclusive. There is no particular percentage that has to be achieved before an item can be said to be “ mainly “ Class 1 or 2 or 4 the consideration under each Class has to be made independently of the other and a combination of two Classes is not possible.

In reality items such as boilers are made for a specific purpose and it is usually obvious what the main purpose of the boiler is.

Air compressors may produce compressed air for more than one purpose ( power and manufacturing operations ) and where this occurs the main use of the compressed air has to be determined.

Electric motors

It should be noted that electrical motors are not rateable as generators of power since they are not “ prime movers “. A “ prime mover “ is a device by which a natural source of energy ( wind, water, or steam ) is converted into mechanical power. Electric motors which are used for driving any machinery or plant listed in Tables 1 and 2 are, however, rateable by their special inclusion in paragraph (k), (l), (m) of Table 1 and (a) General of Table 2. Thus motors as part of air compressors or hydraulic pumps will be rateable and the costs given in the Cost Guide for these items reflect this.

Power generation

Class 1 (d) has been added as a result of the findings and recommendations of the Wood II Committee. It was intended, prior to Reval 2000, to conventionally rate most of the industries subject to Prescribed Assessments. If this were implemented the generation companies, producing electricity for sale, would be, through Class 1, disadvantaged through a significant financial increase. The Wood II Committee’s recommendation was that some exemption was justified and this was manifest in the addition to Class 1 of paragraph (d). Note however, that Turbines and Generators appear within Class 4 Table 3.

Combined heat and power

In 2001, Class 1 (d) was amended by The Valuation for Rating ( Plant and Machinery ) ( England ) ( Amendment ) Regulations 2001, and The Valuation for Rating ( Plant and Machinery ) ( Wales ) ( Amendment ) Regulations 2001. The operative dates are not the same. This amendment is considered in more detail in PN 3 LINK.

Table 1

Table 1 lists items that will be considered for rateability, it is divided up into sub headings (a) to (n). The sub headings simply group together items that are typically associated in use.

Specific note on distribution boards

Many modern distribution boards have a bus bar with the switchgear to each circuit suspended underneath the bar. The distribution bus bar and the switchgear are an integral piece of equipment however strictly speaking the switches do sit after the bus bar. The wording of Table 1 (f) establishes that these integral switches are rateable as part of the distribution board. “ and all switchgear and other apparatus on any such equipment “.

In most non-domestic properties it is assumed that the incoming electrical power is 415 v which, where applicable, is reduced to 235v ( 220v to 240v ). Rental levels or Contractors Test costs, for buildings, assume that this level of electrical power is available on the hereditament and thus for 415v electrical power equipment no specific addition need be made when valuing the hereditament. However, where in addition to the mains supply, 415v is generated on the hereditament, an addition for this equipment is required subject to the parameters of Class 1 Table 1. All other electrical power equipment on the hereditament at a greater rating than 415 v should be valued in addition to the “ reflected “ 415 v items and this will be undertaken within the parameters set by Class 1 including (c) (i) and Table 1 (f).

List of accessories

The List of Accessories should be read together with Table 1 as it lists associated items that will be rateable together with items identified in Classes 1 and 2.

The plant and machinery which is assumed to be part of the hereditament, and which falls to be rated as being within Class 1 of the Schedule to the Regulations, can be summarised as power plant, ie plant which provides power in or on the hereditament.

However, whilst as a general statement it can be said that power plant is rateable, in fact the Class is specific as to which plant is to be included. Indeed not only is there a basic requirement for the item of plant and machinery to be named, but also the rateability of an item will be dependent on its use, or intended use, and whether it is mainly or exclusively so used.

Whilst Class 1 includes plant and machinery specified both in Table 1 and the List of Accessories, the items listed in paragraph 1 of the latter can only be rateable if they are used in connection with the handling etc of fuel required for Class 1 purposes. Similarly the items listed in paragraph 2 of the List of Accessories can only be rateable if they are used as an accessory to plant and machinery which itself is rateable under Class 1 and specified in Table 1.

Unlike Class 4 where the mere presence of an item in or on the hereditament can result in rateability, the items falling within Class 1 will only be rateable if they are in or on the hereditament and used or intended to be used in connection with the provision of power.

Plant which is actually in use will not normally be a problem and the phrase “intended to be used” would include such items as stand-by plant which in fact may be rarely if ever used other than for testing.

However non-use of an item should not be taken as giving exemption to power plant from rateability if the non-use results either from the property being unoccupied or merely from the whim of the actual occupier, and it is clear that the item is capable of use and would be required by the hypothetical tenant.

On the other hand plant which is derelict and incapable of use, or which is clearly no longer required due to changes to the remainder of the hereditament, would be non-rateable under this Class even though still existing in or on the hereditament. (In fact the item may still fall to be considered for rateability under Class 4 but in these circumstances the question of value will be another matter).

It should be noted that for an item to be rateable under this Class it must be mainly or exclusively used in connection with the provision of power.

Where the item is multi-use plant used for Class 1 and Class 2 purposes and for process, the main use will be that which predominates having regard to the other uses looked at individually. Thus the item may escape rateability altogether (other than under Class 4 if appropriate) if the Class 1 and Class 2 uses can only be described as “mainly” if they are combined.

It should also be noted that, unlike Class 2, there is no requirement that the power must be provided to the hereditament nor is there any proviso exempting power plant which is used for process purposes (other than within the definition of Transformer).

“Transformer” as defined in Class 1 includes a variety of apparatus which would not be termed “transformers” in the electrical industry (see paragraph (e) to Table 1). It should be noted that the definition in the pre-amble to Class 1 excludes, and thus exempts from rateability, transformers which form an integral part of an item of plant or machinery in or on the hereditament for manufacturing operations or trade processes eg. a transformer to an electric arc furnace.

Although the plant and machinery in Class 1 is related to power and in particular to its generation, storage, transformation and transmission (from the prime source to the points defined), there is no definition of power within the Regulations.

However, it has been held that, in the context of the Regulations, power means “any form of energy or force applicable to work” where “work”, as defined in the Oxford Dictionary, means “the exertion of a force in overcoming resistance or producing molecular change” (ICI Ltd v Owen (VO) and Runcorn UDC 1955 LT 48 RIT 43).

Power is therefore expressed in terms such as “lbs per hour”, “feet per minute”, “lbs per square inch”. This is in contrast to terms such as “British Thermal Units” (BTUs) which is an expression of energy (in this case heat) which is not power unless it is capable of work.

Generation of power includes generation of steam power, electrical power, pneumatic power, hydraulic power and any motive power. The use of power in one form to generate power in another form is “generation of power” for the purposes of the Regulations.

It should be noted, however, that electric motors are not rateable as generators of power since they are not “prime movers”. A “prime mover” is a device by which a natural source of energy (wind, water or steam) is converted into mechanical power. Electric motors which are used for driving any of the machinery or plant listed in Tables 1 and 2 are, however, rateable by their specific inclusion in paragraph (1) of Table 1 and (a) of Table 2.

Changes in the form of pressure, ie voltage (eg a transformer rated 11KV/3.3KV), or frequency of electrical current should not be regarded as the generation of a new form of power for this purpose and items of machinery and plant specified in paragraph (e) of Table 1 should be regarded as plant for the “primary transformation of power” and not plant for the generation of power.

“Primary transformation of power” covers not only transformation but conversion and rectification of electric power, provided that:-

a. the items of plant so used are named in Table 1 or they are named in the List of Accessories, and are used in conjunction with a named item in Class 1; and

b. the transformation is within the line of main transmission.

“Main transmission of power” is extensively defined in Class 1 and should not give rise to difficulties in determination. It should be noted, however, in relation to sub-paragraph (ii), that shafting or wheels driven directly from an electric motor will not fall within the meaning of “main transmission” and will not, therefore, be rateable since the motor is not a prime mover.

In the case of hydraulic or pneumatic power, referred to in sub-paragraph (iii) of the definition, main supply should be regarded as the transmission lines which are in the nature of “mains” as opposed to “branches”.

In the case of electrical power “main transmission of power” is defined as “all transmission of power from the generating plant or point of supply in or on the hereditament …”. The effect is that the main transmission of power commences within a hereditament:

a. at the point of generation if electrical energy is generated within the hereditament; or

b. at the point of entry of the electrical supply if generation is outside the hereditament; or

c. at both the point of generation and the point of entry if the electricity consumed is generated partly within and partly outside the hereditament, and, following the Wood Committee’s recommendations, will terminate immediately after the first distribution board.

A “distribution board” comprises a box or panel containing switches, bus-bars, circuit breakers, fuses etc for connecting, controlling or protecting a number of branch circuits fed from one or more main circuits of a wiring installation.

All electrical plant named in Table 1 that is to be found between the point of supply and the termination point should be rated eg switches, cables, boosters etc. It is usual to ask the on-site electrical engineer for an electrical schematic in order to determine the rateable and non-rateable equipment. An estimate of the run of cable is usual as exact details are not usually available.

Class 2

Services to the hereditament

The plant and machinery which is assumed to be part of the hereditament and which falls to be rated as being within Class 2 of the Schedule to Regulation 2, is described as service plant. i.e. plant which provides the basic services to the hereditament or part of it.

Defined services

“ In this Class, “ services “ means heating, cooling, ventilating, lighting, draining or supplying of water and protection from trespass, criminal damage, theft, fire or other hazard. “

Although this class is referred to as the “ Service Class “ it is the equipment that is providing the service, which is deemed to form part of the hereditament. This equipment is set down in Table 2 and where applicable paragraph 2 of the List of Accessories.

“ Services” are effectively defined in the head provision to Class 2 and “services” means, heating, cooling, ventilating, lighting, draining or supplying of water and protection from trespass, criminal damage, theft, fire or other hazard. An item under consideration for rateability within Class 2 will probably not be rateable in this Class if it does not form part of such a defined service. For example a de-humidifier would not be rateable if it did not form part of a wider “heating, cooling or ventilating” service.

Explanatory note as to intention

Following the coming into force of the 1994 P & M Regulations the Government appointed a second Wood Committee to consider the Rating of Plant and Machinery in Industries currently subject to Prescribed Assessment.

The Wood II Committee made only one recommendation in respect of Class 2:

“ 12.10 Class 2 (f) should be amended to make clear that fire protection equipment is rateable unless installed mainly or exclusively to protect non-rateable plant and machinery. “

Following Lands Tribunal and the Lands Tribunal Scotland cases, where consideration of the wording of the pre amble to Class 2 ( 1994 P & M Regs ) was undertaken it was found that it did not fulfil the aims of the Wood I Committee. After taking advice DETR had the pre amble re drafted in line with its requirements and incorporating the Wood II Committee’s recommendations. i.e. unless the fire protection equipment is installed to mainly or exclusively protect non-rateable plant and machinery it is rateable.

Exception provisions and head provision to Class 2

Class 2 contains exception provisions, followed by a definition of ‘services’.

“Plant and machinery specified in Table 2 below (together with the appliances and structures accessory to such plant or machinery and specified in paragraph 2 of the List of Accessories set out below) which is used or intended to be used in connection with services to the hereditament or part of it, other than any such plant or machinery which is in or on the hereditament and is used or intended to be used in connection with services mainly or exclusively as part of manufacturing operations or trade processes.

In this Class, “services” means heating, cooling, ventilating, lighting, draining or supplying of water and protection from trespass, criminal damage, theft, fire or other hazard.”

Table 2 then lists items within sub sets (b) to (f). The List of Accessories will also fall to be considered.

Guide to interpretation

It should be noted that in certain cases the “ specified “ items in Table 2 are very specific ie Air intakes, channels, ducts, gratings, louvers and outlets; whilst in other areas Table 2 is less specific i.e. sewage treatment plant and machinery. In this area detritus, conduits, and digesters would be included although not specifically named.

Table 2 (f) introduces the word “ systems “; fire and explosion protection and suppression systems, security and alarm systems and it is in this area, together with the relevant List of Accessories, where Class 2 has been extended by adding to it other items considered to be part of the hereditament.

“ which is used or intended to be used “ follows the same guidelines as the wording in the pre amble to Class 1.

“Mainly or exclusively”

These words appeared in the 1994 P & M Regulations in the second part of the main text of the pre amble to Class 2. Difficulty in identification and interpretation of what constituted “ mainly “ under the 1994 P & M Regs. was removed by taking out the words for the 2000 Class 2 pre amble. With the current wording in the 2000 P & M Regs. if any part of the steam is used for heating the hereditament the whole boiler might fall to be rated under Class 2 [ Class 2 Table 2 (b) Heating, Cooling and Ventilation : (i) water heater]. However (and see further guidance below), rateability of the boiler would depend upon whether it was ‘used or intended to be used in connection with services mainly or exclusively as part of manufacturing or trade processes’, use of some minor part of the boiler’s output for heating, would not automatically imply rateability. A degree of pragmatism is expected when applying this interpretation.

“Used in connection with services to the hereditament or part of it.”

Key point

Class 2 Service items will only be rateable if they provide a ‘service to the hereditament’. For example sprinklers protecting the wider hereditament, or rateable items of plant from fire will be rateable, whereas sprinklers specifically directed at protecting non rateable items (eg a non rateable tank) will not be.

See

Shell UK Exploration and Production Limited v Assessor for Grampian Joint Board 2000 LTS/VA/1998/47 Which makes specific reference to fire protection systems at a gas processing plant.

The findings in Shell, are reinforced in the Wood II Committee’s recommendations at page 42 of their report.

Hazards

The operative wording in the Regulations under “ services “ is “protection from”, and this can be applied to the other services in the group i.e. protection from criminal damage, protection from trespass, protection from theft, protection from other hazards.

In respect of criminal damage this also can be interpreted as being exclusively to the hereditament or part of it.

“ which is used or intended to be used in connection with protection from criminal damage to the hereditament or part of it. “

In respect of “ trespass “ the sentence reads :

“ which is used or intended to be used in connection with protection from trespass to the hereditament or part of it. “ Trespass to should be read as trespass on Oxford Concise : trespass

  • make unlawful or unwarranted intrusion ( on or upon land, rights, et cetera )
  • wrongful entry on another’s land with damage

Wood I page 27 9.18 specifically refers to trespass and criminal damage.

The word theft does not appear in the Wood I committee report and it was an addition made by the legislators. The reference in the Wood I report ( and our only source of the intention of the wording ) appears on page 27 at 9.18.

“ 9.18 We consider that the existing definition of plant and machinery which services the hereditament requires an addition to deal with ‘Security’. Under this heading would come plant and machinery that is used to protect the property from trespass or criminal damage, for example, security and alarm systems.”

The intention of the Wood I Committee was to rate equipment that would be provided by the Landlord that would protect the whole property from theft, trespass and criminal damage. It would appear that Wood I intended to rate those items that were on the hereditament that would record and thus act as a deterrent against theft of goods from the property or trespass on the property or criminal damage to the property.

Thus a security system installed on a hereditament to give protection from theft of property is rateable.

Pragmatically, but with the approval of the legislators, a system, when considering security cameras et cetera, consists of 4 or more cameras.

Manufacturing operations or trade processes

For this provision to be applicable the item, used in connection with services, must be part of a manufacturing process or trade operation and it must be mainly or exclusively used as such.

There is no definitive test to apply to items to determine whether they are mainly or exclusively part of manufacturing operations or trade processes.

For guidance some examples are provided below. However, where the circumstances are not easily determined, the case should be referred to the NSU Crown and Industrial team for assistance.

eg an air management system to a wet fish factory building, where wet fish was being stored, handled and prepared before processing, was deemed to be part of the manufacturing operation for if it broke down or was not available the fish would deteriorate and become unsaleable.

a camera, and recording system over a production line of vegetables in order to identify foreign bodies that have been missed by the initial inspection process, was deemed to be part of the manufacturing operation for if it broke down or was not available the vegetable would not conform to health standards and be unsaleable.

In contrast to

A security camera system in a bullion store to watch for theft was deemed to be rateable for if it broke down or was not available it would not affect the counting and processing of the money.

The plant and machinery which is assumed to be part of the hereditament and which falls to be rated as being within Class 2 of the Schedule to the Regulations can be briefly described as service plant ie. plant which provides the basic services to a building.

However whilst as a general statement it can be said that service plant is rateable, in fact the Class is specific as to which plant is to be included and which excluded. Indeed not only is there the basic requirement for the item of plant or machinery to be named in Table 2 but also the rateability of an item will be dependent on its use or intended use.

Unlike class 4 where the mere presence of an item in or on the hereditament will result in rateability, the items falling within Class 2 will only be rateable if they are in or on the hereditament and used or intended to be used in connection with the provision of the specific services listed.

Plant which is actually in use will not normally be a problem and the phrase “intended to be used” would include such items as stand-by plant which in fact may be rarely if ever used other than for testing.

However non-use of an item should not be taken as giving exemption to service plant from rateability if the non-use results either from the property being unoccupied or merely from the whim of the actual occupier, and it is clear that the item is capable of use and would be required by the hypothetical tenant.

On the other hand plant which is derelict and incapable of use or which is clearly no longer required due to changes to the remainder of the hereditament would be non-rateable under this class even though still existing in or on the hereditament. (In fact the item may still fall to be considered for rateability under Class 4 but in these circumstances the question of value will be another matter).

It should be noted that plant or machinery used for heating etc. will only fall to be rated under Class 2 if it is used for the purposes of heating etc. the hereditament of which it forms part. Thus heating plants which properly constitute separate rateable hereditaments and which are in fact separately assessed from the hereditament which is heated, will not fall to be considered under Class 2.

It should also be noted that for an item to be rateable under this Class it must be mainly or exclusively used in connection with the provision of the specified services.

Class 3

Overview

In this Class there is no pre amble or qualifying exceptions, however, some specific items do have their own parameters. Where an item is just named i.e. lifts; the whole of the lift installation is rateable including the actual lift cage, electronics, hydraulics, guide rails, safety features and motors including the settings. A pipe-line on the other hand has specific parameters and specific exemptions, which are laid down within Class 3 (g).

List of accessories

The List of Accessories does not apply to items rated under Class 3.

Class 3 (a) railway tracks and lines

Power rails are specifically excluded and track ballast should be valued as an enhancement to the land and not a part of the track support or track setting.

Railway and tramway lines and tracks are to be assumed to be part of the hereditament being named items in Class 3 of the Schedule to the Regulations and are accordingly rateable.

Since there are no qualifications to Class 3(a), all railway lines will be rateable irrespective of the gauge or specification of the track.

Whilst it has always been maintained that the terminology used should be interpreted to include all railway tracks, points, turnouts, cross overs and fixed buffers within the curtilage of the hereditament, the Regulations now specifically provide that all associated fixed accessories and equipment are rateable.

It should be noted that certain ancillary items such as bridges and turntables are also included in Class 4 Table 3.

Class 3 (b) lifts, elevators, hoists, escalators and travelators

Lifts will include items used for people or for goods. Elevators would include items such as bucket elevators used to lift stone for example. Hoists might be considered to employ chains, ropes or cables and a pulley as the main means of raising items. Escalators and travelators are typically found in airports for example.

Of note, ‘conveyors’ do not appear within Class 3, but supports etc. for them may be rateable within Class 4 Table 3.

Class 3(b) of the Schedule to the Regulations provides that lifts, elevators, hoists, escalators and travelators are rateable and deemed to be part of the hereditament irrespective of their size or use (ie whether passenger or goods).

Since the Class contains no restrictions as to the extent of rateability, all the component parts of the items including lift cage, cables, motors etc will be rateable.

Class 3 (c) and (d) electricity supply and transmission

This sub class concerns electricity generating, transmission, distribution and supply hereditaments. Items listed in Class 3 (d) will only be rateable if they are used in connection with items rated under Class 3 (c)

The items named in (c) are only rateable if they are used or intended to be used in connection with the transmission, distribution or supply of electricity.

Switchgear and transformers are excluded, following the recommendation of the second Wood Committee report.

Class 3 (e) & (f) telecommunications

Equipment engaged in the processing and transmission of telecoms signals. Restricted to cables, wires and fibres, but only if they are located on transmission processing premises. Together with masts, posts, towers etc.

It is important to appreciate that the rateability of the items both in (e) and (f) is dependent on the user requirements of the paragraphs. Thus the items listed in (f) will only be rateable if they are used in connection with items that are rateable under (e).

The items named in (e) are only rateable if they are used or intended to be used in connection with the transmission of communications signals. Furthermore, since it was the Wood Committee’s intention that only “network” cables should be rateable, the paragraph specifies the cables etc (or parts thereof) which are to be included, and those which are to be excluded.

The cables etc which are not included, are those which are within a hereditament, or any part of a hereditament, where the equipment is used mainly for the processing of communications signals. This term is defined in the paragraph which also specifies the extent of the cable etc which is to be excluded as forming part of the equipment used for the processing of communications signals (see RM 5:860 Radio and TV Transmitting and Receiving Stations).

Class 3 (g) pipelines

Pipes and pipelines are rateable in this Class, subject to the exceptions set out, together with certain accessories. In essence, pipes that are leaving the premises and lie beyond the last control valve on a hereditament will be rateable. Pipes that are entering the hereditament are rateable up to the first control valve on the premises. The exception provision in the Regulations is phrased in the negative, hopefully the explanation above clarifies.

It should be noted that whilst the Wood Committee considered whether pipelines should be regarded as forming part of the infrastructure of a property, it concluded that it was not appropriate to rate pipelines within a hereditament other than those that fall within Class 1 or 2.

Nevertheless this preferred exemption of “internal” pipelines is limited to the types of hereditament specifically named in the Regulations, and, in accordance with the Wood Committee’s recommendations, to that part of the pipeline that is within the first and/or last control valve on the premises.

It should also be noted that the 1994 Regulations redefine a pipeline by now including associated fixed accessories and equipment, and by not excluding (as previously) pipes vested in gas or electricity suppliers.

Pipes and pipelines are considered in detail in RM 5:780 to which reference should be made generally and in particular on questions relating to rateability and valuation.

Class 3 (h) lock gates and dock gates

There are no regulating parameters to Class 3 (h) and thus not only are the lock gates rateable but all the plant and equipment used in connection with the gates should be included. This may include hydraulics, electrical control equipment, supports, computer control equipment et cetera, and whereas some of this equipment may be rateable under other Classes forming the P & M Schedule those items outwith the Schedule, but used in connection with or forming part of, should also be considered.

Class 4: plant as a building or structure

Key point

The overarching consideration for rateability in this Class is that the item of plant must be a building or structure or in the nature of a building or structure. There are two lists of items within Class 4, it is important within which list the item occurs, as different tests for rateability apply.

The two ‘Tables’

Class 4 lists items in two Tables, Table 3 and Table 4.

Items are set out in two lists, one for each Table.

The item naming is considered to be “ generic “ but a common sense approach must be adopted.

Class 4 head provisions – exceptions from rateability

The provisions are expressed in negative terms:

“The items specified in Tables 3 and 4 below, except–

(a) any such item which is not, and is not in the nature of, a building or structure;

(b) any part of any such item which does not form an integral part of such item as a building or structure or as being in the nature of a building or structure;

(c) so much of any refractory or other lining forming part of any plant or machinery as is customarily renewed by reason of normal use at intervals of less than fifty weeks;

(d) any item in Table 4 the total cubic capacity of which (measured externally and excluding foundations, settings, supports and anything which is not an integral part of the item) does not exceed four hundred cubic metres and which is readily capable of being moved from one site and re-erected in its original state on another without the substantial demolition of any surrounding structure.”

This can be broadly summarised for the majority of common items under consideration:

  • Rateable items will be buildings or structures or in the nature of buildings or structures, provided that:

  • They are either listed in Table 3, or

  • If in Table 4 are larger than 400 cubic metres, or if not larger

  • Cannot be readily moved and re-erected their original state without the substantial demolition of any surrounding structure.

Detailed considerations for rateability

Key point

To be rateable within either Table 3 or Table 4 the items must be named in the Table and be a building or structure or in the nature of a building or structure. Hence an item within Table 3, that satisfies the building or structure test will normally be rateable. The Class 4 (d) ‘exception’ only applies to items within Table 4.

There is no legal definition of a structure although the Courts have looked at 4 tests, which form a useful guide.

The tests

i) The way in which the item is constructed ii) Its size and weight iii) Its degree of attachment to the land or other buildings or structures iv) Its degree of permanence

These tests are interdependent and (i), (ii), or (iii) may be conclusive.

In most cases the item will be constructed out of basic materials i.e. brick, stone, concrete or steel and may be either constructed wholly on site or prefabricated off site in whole or part and brought onto site. The size and weight of the item is not specific ( Class 4 (d) considers size in respect of items falling under Class 4 Table 4 although this limitation is qualified ). The item must be attached to the land or building or other structures forming the hereditament. The item should have a degree of permanence in a specific location on site but relocation on site for exceptional circumstances does not invalidate the permanence argument.

For items considered under Class 4 Table 4 the wording “ and which is readily capable of being moved from one site and re-erected in its original state on another without the demolition of any surrounding structure. “ must be considered.

A structure, especially one constructed of brick and/or concrete, is extremely difficult to move from “one site and (be) re-erected in its original state on another “. Inevitably substantial replacement brickwork, concrete et cetera is required when the whole item is moved and this would bring into rating items named under Class 4 Table 4 that are less than 400 cu m.

Class 4 (a) considers structures in their own right. A purpose designed galvanised steel stairway and platform structure to a Sphere was deemed to be a rateable structure under Class 4 Table 3 stairway as it fulfilled the tests of a structure and was attached to the land and hereditament ( rateable tank and the land ). ( Monsanto plc v Farris 1998 RA 107)

The Wood I Committee commented at 10.11 on Table 3 :

“ We do, however, urge Valuation Officers and Assessors to take a commonsense view when confronted with minor items whose rateable value is insignificant. “

Nevertheless the structural test ( Class 4 (a) ) is applicable and many structures, although small, are essential structures and of no insignificant value.

The Wood II Committee recommended that additions be made to Class 4 Table 3 and none of these additional items should be considered as minor items or rateable value insignificant.

Cooling towers, dams, valve towers, tunnels, tunnel linings, tunnel supports, viaducts, and fixed cranes.

In general these items are readily identifiable and the structural element is easily distinguishable. Their construction satisfies the “ tests “ of being a structure. Valve towers are generally found in reservoirs, located near the dam wall, and it is where the water goes over a weir and drops down to the treatment, distribution pipework below. They may regulate the compensation water for the dammed river.

Class 4 table 4

Two items were added to Class 4 Table 4 as a result of the recommendations by the Wood II Committee, these were reservoirs and reactor pressure vessels. The latter is specific whereas although large water storage reservoirs operated by the Water Companies are readily brought to mind, reservoirs, “ receptacles usually constructed of earthworks, concrete or masonry holding any fluid,” no matter what fluid, should be considered as part of the hereditament.

In reality most reservoirs of fluid to machinery are constructed from steel or concrete and would be described as a tank. As such they could be rated under the List of Accessories if the main item is rateable under Class 1 or Class 2 or Tank under Class 4 Table 4.

The plant and machinery which is included in Class 4 of the Schedule to the Regulations can be summarised as that which would normally be regarded as the occupier’s or tenant’s process plant but which is of such substance that it should properly be treated as forming part of the landlord’s hereditament.

Thus whilst Table 3 and Table 4 list the plant and machinery that falls to be rated under Class 4, the Class exempts from rateability such items which fall within exceptions (a) to (d), the fundamental exemption being of non-structural plant. In this respect, if an item of plant cannot be identified with a named item in Tables 3 or 4 then it will not be rateable under this Class irrespective of the structural nature and size of the item.

Since there are a number of restrictions as to whether, and to the extent to which, an item can be rated under Class 4, it is appropriate, when approaching the question of plant rateability, to first consider whether the item falls to be rated under one of the other Classes in the Schedule to the Regulations.

If the item is not named in, or even if named fails to qualify under one of the other Classes, then reference can still be made to Class 4 to ascertain whether the item is rateable under the provisions of that Class.

Firstly, it is necessary to establish whether the plant can be identified with a named item in either Table 3 or 4 to Class 4 and thereafter whether, and to what extent, exceptions (a) to (d) apply to exempt the whole or part of the item.

It should be noted that exceptions (a) to (d) detail the grounds on which an item named in the Tables will be exempt from rateability but the valuer/referencer might find it more helpful, at least in relation to some of the exceptions, if this Class was approached more positively as to the grounds which will make an item rateable (rather than exempt). The exceptions (a) to (d) are considered in more detail below on this basis.

The exceptions (a) - (c) apply to items named in both Table 3 and Table 4 but exception (d) only applies to items in Table 4.

Racking

In Annex K of the Wood Committee’s report it was recommended that “Racks” should be deleted as being regarded as in the nature of non-rateable process plant, but that clad racking would be assessed as part of the building structure.

It would seem the intention was that only the building element ie the floor, the cladding, including the roof, and such part of the racking structure as is necessary to support the cladding, should be regarded as rateable, (not as plant and machinery but as a building) and the Wood Committee’s reference to this form of racking should be interpreted accordingly.

Mezzanine floors

Whilst in some cases there may be a fine line between a racking system, or part of such system, and a mezzanine floor, the latter should normally be treated as part of the land and buildings in which the business is carried on. See Rogers (VO) v Evans [1985] RVR 186

However, there will be cases where the mezzanine floor cannot be regarded as forming part of the fabric of the building (Vincent Bach International Ltd v C A Kubbinga (VO) 1994 LT RA 31

The exceptions – a closer look

Exception (a)

The first exception which is fundamental to all Class 4 items effectively requires that an item to be rateable must be either a building or structure or in the nature of a building or structure.

There is no statutory definition of “structure” and whilst a number of cases have considered the question in relation to the rateability of an item of Class 4 plant, these should be read with care having regard to the fact that many will have been considered prior to the Plant and Machinery (Rating) (Amendment) Order 1974 which in particular introduced the 200m3 size test (now increased to 400m3).

However reference should be made to Elliott’s Bricks Ltd v Hartley (VO) 1990 LT RA 161 which case concerned the rateability of tanks and in which the Member referred to previous authorities. In particular he quoted from the judgements of Denning LJ and Jenkins J in the decision of the Court of Appeal in Cardiff County Borough Rating Authority and AC v Guest Keen Baldwins Iron & Steel Co Ltd 1949 CA 42 RIT 2. Thus Denning LJ said:-

“A structure is something which is constructed, but not everything which is constructed is a structure. A ship, for instance, is constructed, but it is not a structure. A structure is something of substantial size which is built up from component parts and intended to remain permanently on a permanent foundation; but it is still a structure even though some of its parts may be movable, as, for instance, about a pivot. Thus, a windmill or a turntable is a structure. A thing which is not permanently in one place is not a structure but it may be ‘in the nature of a structure’ if it has a permanent site and has all the qualities of a structure, save that it is on occasion moved on or from its site. Thus, a floating pontoon, which is permanently in position as a landing stage beside a pier is, ‘in the nature of a structure’, even though it moves up and down with the tide and is occasionally removed for repairs or cleaning. It has, in substance, all the qualities of a landing stage built on piles. So, also, a transporter gantry is ‘in the nature of a structure’ , even though it is moved along its site. It has the same qualities as a fixed gantry, save that it moves on its site”.

and Jenkins J

“It would be undesirable to attempt, and, indeed, I think impossible to achieve, any exhaustive definition of what is meant by the words, “a building or structure or in the nature of a building or structure”. They do, however, indicate certain main characteristics. The general range of things in view consists of things built or constructed. I think, in addition to coming within this general range, the things in question must, in relation to the hereditament, answer the description of buildings or structures, or, at all events, be in the nature of buildings or structures. That suggests built or constructed things of substantial size. I think of such size that they either have been in fact, or would normally be, built or constructed on the hereditament as opposed to being brought on to the hereditament ready made. It further suggests some degree of permanence in relation to the hereditament, ie, things which, once installed on the hereditament, would normally remain in situ and only be removed by a process amounting to pulling down or taking to pieces. I do not, however, mean to suggest that size is necessarily a conclusive test in all cases, or that a thing is necessarily removed from the category of buildings or structures, or things in the nature of buildings or structures, because by some feat of engineering or navigation it is brought to the hereditament in one piece.

For instance, floating docks or pontoons, items specifically mentioned in Class 4, would not, I think, be excluded merely on account of having been towed complete to the hereditament instead of having been built or constructed there. The question whether a thing is or is not physically attached to the hereditament is, I think, certainly a relevant consideration, but I cannot regard the fact that it is not so attached as being in any way conclusive against its being a building or structure or in the nature of a building or structure. That is, I think, clearly shown by some of the items specifically mentioned in Class 4, eg floating docks and pontoons would necessarily not be so attached ….”.

Thus whether or not an item is a structure or in the nature of a structure should be considered in the light of its size, weight, design and method of construction (ie built up from component parts) and its degree of permanence and attachment to the hereditament.

It is, however, important to note that none of these factors, taken alone, are necessarily conclusive.

In particular the fact that an item is not physically secured to the land or buildings but is merely attached by its own weight or indeed that it moves on its site, does not debar the plant from being a structure or in the nature of a structure.

In this respect the reference to “permanence” in the authorities should be interpreted having regard to intention rather than movability. Thus the intention that a movable item of plant shall remain in site whilst it is functioning even though it could be readily removed to another place either in one piece or by being dismantled and re-erected, would suggest a sufficient degree of permanence for it to be regarded as being in the nature of a building or structure providing it otherwise qualifies by reason of size etc.

A further aspect which has given rise to misunderstanding is the reference by Jenkins J in the Guest Keen Baldwins case to “feat of engineering” which, it has been contended, would exclude an item from being a structure if it can be brought to or removed from the site in one piece by normal methods of transportation (albeit by specialised vehicles).

However, the ability to transport an item in one piece should not be regarded as a conclusive test but only as a consideration and reference should be made to the judgements of Lord Evershed MR and Denning LJ in B.P.Refinery Ltd v Walker (VO) 1957 CA RA 353.

In particular Denning LJ said:

“In several passages of the case stated the tribunal seems to have regarded it as a characteristic of a structure or the nature of a structure that it should be built up from component parts on the spot: and in consequence that, if a part of the plant was brought to the site all in one piece, it could not be said to be of the nature of a structure unless it was brought there by some “feat of engineering”. Those words were used by Jenkins J, in the Cardiff case, but I am sure he did not mean them to be used as a definition: and it is misleading to use them so. Many will remember seeing prefabricated houses being transported on lorries. When erected they were structures or in the nature of structures, but it did not require a “feat of engineering” to transport them to the spot. This illustration brings out the point. It is, I think, a characteristic of a structure, that it is built up of component parts on the site but a thing may be in the nature of a structure, even though it is not built up on the site, but is brought there all in one piece. The nature of the thing depends on its characteristics when erected, not on whether it requires a feat of engineering to bring it there”.

Since the reference in the exception is to building or structure in the singular it follows that if there is more than one building or structure comprising the particular plant then there must be more than one item and each item must be considered separately for rateability.

Furthermore parts of a building or structure may be rateable even though the structure as a whole is not (ie not named in Class 4) provided that such parts are named in Class 4 and are themselves in the nature of a building or structure.

Exception (b)

Having identified an item of plant as being named in Class 4 and established that it is, or is in the nature of, a building or structure (and that it is not exempted under the size test of (d)) it is then necessary to establish the extent of the item or the parts of the item that fall(s) to be rated under Class 4 having regard to this exception and to (c).

Since Class 4 is concerned with structural plant it is logical that only such parts of an item that are structural should be included and this exception excludes such parts of the item which do not form an integral part of the item as a structure.

It is important to note that to be rateable the part is not required to be a structure in itself (unless it is being considered as a separate item) but that it forms an integral part of the item, not as an integral part of a functioning item of plant, but as a structure. Thus this will exclude or exempt from rateability such items as motors and moving parts and other accessories which are detachable from the structure of the item and parts of the plant which are or can be detached for cleaning and replacement without general demolition of the item of plant as a whole.

Exception (c)

This provision exempts from rating any refractory or other lining which forms part of an item of plant (rateable under Class 4) but which is renewed at intervals of less than fifty weeks.

Whilst this exemption does not normally give rise to any problems, it does not follow that refractories renewed at intervals of more than fifty weeks are necessarily rateable. Such refractories or other linings need to be considered under exception (b) as to whether they form an integral part of the item as a structure.

Exception (d)

This exception only applies to items of plant and machinery in Table 4. The prescribed size limit should not be regarded as being of any relevance in considering whether an item in Table 3 is in the nature of a structure. Furthermore it does not follow that items in Table 4 in excess of the size limit are necessarily structures although it is unlikely that any challenge will be mounted on these grounds.

In order to qualify for exception under this provision both the following tests have to be satisfied.

(i) Size

The provision is specific as to the size limit and how it is to be calculated. Thus an item of 400m3, since it does not exceed the prescribed limit, will not be rateable whilst an item of 401m3 will. There is no room in this provision for exempting an item because it only marginally exceeds the limit.

The parts or related parts of the item which are to be excluded from the calculation are stated and it follows from the wording of the exclusion that any part which is an integral part of the item should be measured and included in the cubic capacity.

Although it does not state this specifically, the reference to “integral part of the item” should be interpreted as being an integral part of the item as a structure.

In some cases the method of measurement of an item and the parts to be included or excluded in the calculation of the cubic capacity will be critical as to whether the plant is rateable or exempt as falling within exemption (d). In cases of difficulty further advice can be obtained, via NSU Crown & Industrial.

(ii) Mobility

Even though an item in Table B is less than 400m3 it may still be rateable if it is, or is in the nature of, a building or structure and is not readily capable of being moved from one site and re-erected in its original state on another without the substantial demolition of any surrounding structure.

It has been contended in some cases that “moved from one site” could include the movement of the item by only a few centimetres so that the item could be moved within, and without disturbing, a surrounding structure. Whilst this has not been tested, this part of the exception should be interpreted as meaning the item being moved to a totally different site and not to one which adjoins or even overlaps the existing site.

It should be noted that, following the Wood Committee’s recommendation, the requirement that the item should be capable of being moved “without the substantial demolition of the item” has been removed.

It would appear that the Committee considered that these words were otiose having regard to the requirement that the item has to be readily capable of being moved and re-erected in its original state.

Thus the fact that no reference is made to the substantial demolition of the item should not be interpreted as affecting the rateability of an item one way or the other.

The LT appeal in the case of Cumber (VO) v Associated Family Bakers (South West) Ltd 1979 LT RA 328 was concerned with the rateability of bakers’ ovens and provers and in particular concentrated on the interpretation of the (then) part of the exception relating to “substantial demolition”. Nevertheless the case still affords guidance as to this (now revised) part of the exception.

It was proved in evidence that ovens and provers of the type under consideration were in practice taken to pieces and re-erected elsewhere, even though this involved as many as 200 pieces of which 10 were large principal components.

The Lands Tribunal Member held that the items were excluded under the terms of the exception and said:

“The provers and the ovens in this case can quite clearly be re-erected using the same component parts with the exception of small items such as nuts and bolts. Some of the steel plates would in fact require to be cut but this would be done along the line of the existing welding and would be rewelded along the same lines”.

Thus ,whilst the method of division of the item as a prelude to its removal may be an important factor in specific cases, normally unbolting and rebolting or simple cutting and rewelding of the constituent parts should not exclude an item which would otherwise fall within exception (d).

It should be borne in mind that the term ‘readily capable’ is applicable to both removal and re-erection of the item and it is helpful in considering this to establish the extent to which it is the prevailing practice - albeit requiring expertise - to take the item to pieces and remove and re-erect it elsewhere. In some cases guidance will be afforded by a consideration of the means by which the item was originally brought to the site and erected.

However, not only must the item be readily capable of being moved and re-erected on another site in its original state, in order to fully satisfy the exception, this must be achievable without the substantial demolition of any surrounding structure.

It is important to note that it is not a requirement for the surrounding structure to necessarily be rateable and assumed to be part of the hereditament. Furthermore it is essential to appreciate that the item being reviewed under this exception must be considered as a single item and as the only item to be moved, with any attached or adjacent item or structure assumed to remain. Thus it is likely that any structure which relied on the item for support would be substantially demolished by the removal of the item.

Examples of plant and machinery

In the majority of cases little difficulty will be experienced in identifying the items of plant and machinery assumed to form part of the hereditament. However in the past certain items have raised questions as to their rateability and as to the Class under which they fall to be considered and these are reviewed below.

Baker’s oven and provers

Most of the difficulties experienced with these items were overcome by the Class 4 Table B size limit of 200m3 (now increased to 400m3) and the decision in **Cumber (VO) v Associated Family Bakers (South West) Ltd 1979 LT RA 328 as to the interpretation of “moved without substantial demolition”. **

Thus ovens and provers which exceed 400m3 should be rated as being within Class 4 Table 4.

Ovens which are built into the fabric of the building in which they are situated will form part of the hereditament and will be rateable whatever their size.

Moving parts of bakers’ ovens and of provers are not rateable since though they are part of the oven or prover they are not part of the structure, the following case illustrates this.

W. Collier v Fielding (VO) (1957) LT and affirmed by COA (1958) R&IT 202

This case concerned provers and ovens.

“One of the provers…bolted to three-channelled concrete bases……….The overall length of the prover is 24 feet 3 inches and the overall height is 10 feet 6 inches, and the overall width 10 feet 3 inches….The total weight is 16 tons, of which about 7 1/2 tons is due to the moving parts.”

The other prover differed slightly in volume and layout, but was a similar weight.

“The two ovens are identical….33 feet 5 inches in length, 12 feet 4 inches in width and 9 feet 6 inches in height. The total weight is 45 tones, of which about 9 tons is attributable to the moving parts.”

The provers and ovens contained both static (structural) parts and moving parts.

In considering the rateability of the plant and with reference to the ‘static parts’:

“ These static parts are erected on the site, are substantial in both size and weight, and are intended to remain in their present position and are, in my opinion, applying the tests in the Guest Keen & Baldwins case, structures or in the nature of structures equally with the ovens in the Ogdens (Brighton) Ltd. case. I am therefore satisfied and should find that the static portions of the provers are chambers for conditioning and are structures or in the nature of structures within the order and are therefore rateable”

In considering the rateability of the plant and with reference to the ‘moving parts’:

“ It is, of course, true that the fact that a piece of plant is moveable does not prevent its being a structure or in the nature of a structure (Cardiff Rating Authority v Guest Keen Baldwins Iron & Steel Co. Ltd), but it seems to me that there is a distinction between a moveable structure and moveable plant which is used in conjunction with a structure. In the present case, I am satisfied by the evidence that the oven could be used as an oven and the prover as a prover without the moving parts, although it would not be economical so to use them since the dough would have to be stacked in and un-stacked by hand and the whole benefit of the continuous process would be lost. But the moving parts do not form an essential feature of the oven as an oven, or the prover as a chamber for conditioning: they are provided merely to ensure a continuous flow, and are, as counsel for the ratepayer put it, the furniture, and not integrated in the structure and become part of it.

I have, therefore, come to the decision that the moving parts of both ovens and provers are not rateable under the order, since the moving parts do not in themselves appear to me to form part of the structure of either oven or prover.”

Conclusions from Collier

The judgement in Collier v Fielding seems to confirm (following Guest Keen) that moving parts of a structure could be rateable as long as they formed part of the structure, but further, that it might be possible for moving parts which are an ‘essential feature’ of an item, to be rateable. It is important to note that the Class 4 (c ) exception, relating to parts which move or rotate, contained within the 1989 regulations is not perpetuated in the 1994 or 2000 regulations.

Boilers

For the purposes of the Regulations steam raising boilers fall into three main categories:- a. Boilers used wholly or mainly for the raising of steam for power purposes (Class 1) or for heating purposes (Class 2), together with the items which are named in the List of Accessories will be rateable as a whole. b. Boilers used mainly or exclusively for the raising of steam to be used in trade processes are not rateable under Class 2 but may be rateable as named items under Class 4.

Rateability in this case will extend only to so much of the boiler as is in the nature of a structure and all moving parts, control gear, instrumentation etc, must be excluded as not being in the nature of a structure. The accessories of a Class 4 boiler cannot be rated unless the individual items comprising the accessories themselves qualify as plant rateable under Class 4 by being named items and by being, individually, in the nature of a structure.

The whole of the structural part of the boiler is rateable and the “structure” test must be applied to the boiler as a whole. The fact that parts of the boiler such as the furnace, the economisers or the super heaters are themselves named items does not mean that these items should be isolated from the boiler in applying the “structure” test. Had the boiler not been a named rateable item, the ancillary parts would then have had to be isolated and the test applied to each named part (see re the Appeal of Wand (VO) 1967: LT: RA 45).

a. Multi-purpose boilers which are used to raise steam both for the generation of power (Class 1) and/or heating (Class 2) and for process purposes are becoming increasingly common in industry. Generally, these are “high pressure” boilers where high pressure steam passes first through turbines where it is “let down” to a pressure at which it can be used for process and/or heating purposes.

Alternators coupled to the turbines generate electricity. The turbines, alternators and allied plant are, of course, used exclusively for generation of power and will be rateable under Class 1 but the boilers will be rateable under Class 1 only if used mainly in connection with the generation of power.

Where the steam raised by the boiler is used for three different purposes ie for power (Class 1) for space heating (Class 2) and for process, each use must be examined to establish whether the item is mainly so used. If the process use predominates, then the boiler will not be rateable other than under Class 4.

It is not appropriate to combine the use under Class 1 and Class 2 and compare the total “rateable” use against the non-rateable process use in order to establish the main use of the item - each use must be considered separately.

Primary use for the purposes of Class 1 or Class 2 will bring the boiler and all its accessories into rating. Rateability under Class 4 will extend only to so much of the boiler as is in the nature of a structure.

Catwalks

Catwalks are a named item in Class 4 Table 3 and will be rateable as such provided that they are structures or are in the nature thereof. Catwalks which form structural parts of major rateable items should be regarded as not in themselves separate items: eg catwalks and staircases attached to gas-holders should be regarded as part of the gas-holder.

Chambers

Historic versions of the Regulations listed chambers along with their specific purpose, e.g. ‘chambers for conditioning’, the current Regulations however refer simply to ‘chambers’, and thus, subject to (a) to (d) of Class 4, all chambers are rateable irrespective of the use to which they are put.

Cold store plant

From the decision in Union Cold Storage Company Ltd. v Assessment Committee of the Metropolitan Borough of Southwark [1932] R & IT 160. The otherwise Class 2 cooling equipment associated with commercial cold stores falls within the ‘manufacturing operations or trade processes’ exception to that Class. Where products are undergoing a freezing or cooling process this seems reasonable.

Compressors

Air compressors will be rateable under Class 1 as plant used for the generation of power, provided that the air compressed is used for power purposes. “power” and “work” were defined in ICI Ltd v Owen (VO) and Runcorn UDC 1955 LT 48 RIT 43.

Engines or motors employed in the driving of rateable compressors are themselves rateable and it should not be overlooked that the main supply piping is also rateable.

Compressors other than air compressors are named only in the List of Accessories to the plant and machinery falling within Classes 1 and/or 2 and will be rateable only in this limited context.

Condensers and scrubbers

Condensers and scrubbers for specific purposes are named items in Class 4 Table 4 and subject to not being exempted by the exceptions to that Class will be rateable to the extent that they are in the nature of a structure. They will, however, be rateable in their entirety if they are ancillary to an item of Class 1 or Class 2 plant since each of these items is named in the List of Accessories.

Cranes

Fixed cranes, which include those found in docks and wharves, may have a solid base but the upper parts revolve round a pivot. Such ‘fixed cranes’ are named in Table 3.

In Cardiff County Borough Rating Authority and AC v Guest Keen Baldwins Iron & Steel Co Ltd [ 1949 ] CA 42 RIT 2, Denning LJ said in connection with structures : “…….. but it is still a structure even though some parts of it may be moveable, as, for instance, about a pivot. Thus a windmill or a turntable is a structure. “

The moveable upper structure of a fixed crane is therefore a structure and as part of a named item is deemed to form part of the hereditament.

The most commonly encountered cranes, known as overhead travelling cranes, are not named in the regulations and as such, are rateable only to the extent of their supports and settings etc. appropriate costs reflecting the rateable extent of these items are to be found in the Cost Guide.

Rarely, rateable cranes will arise as accessories to Class 1 or 2 items.

Economisers and super heaters

Economisers and super heaters are named in Table 1(a) of Class 1 and are therefore rateable within this Class. They are also, together with heat exchangers, recuperators and regenerators, listed in Class 4 Table 4 and will be rateable in this Class subject to exceptions (a) to (d).

Gantries (see also ‘cranes’)

Gantries are named on the List of Accessories to Classes 1 and 2 and are therefore rateable when found to be used as an accessory to items of Class 1 or Class 2 plant and machinery.

Whilst there is no restriction on the type of gantry under Class 1 or Class 2, only fixed gantries are named in Table 3 to Class 4 and thus travelling gantries of whatever size are not rateable under Class 4, and only the fixed gantry rails and any supporting structure should be regarded as rateable.

Pipes

Pipes are not a named item in Class 4 but may fall to be rated as being a named item in Table 2 and in the List of Accessories to Class 1 and Class 2.

Subject to the exceptions to that Class, a pipe or pipe line may be rateable under Class 3(g).

Pumps

Pumps which are used in connection with the draining or supplying of water, or the protection from hazards, will be rateable under Class 2 being named items in Table 2. However pumps used for the distribution of water for process purposes within a hereditament will be excluded from rateability by the proviso to Class 2.

Pumps are also a named item in the List of Accessories to Class 1 and to Class 2 and feed water pumps to boilers used for the generation of power are named in Table 1 and will be rateable under Class 1.

Refrigerators and cold stores (see also ‘cold stores’)

Whilst the word refrigerator does not appear in Class 4, such items should be considered for rateability under “chambers” in Table 4 of that Class.

Since the item is included in Table 4, the 400m3 size test applies and normally free standing refrigerators below this limit will not be rateable. However it is still necessary to apply to refrigerators below 400m3 the test as to whether the item can be moved without substantial demolition of any surrounding structure.

Thus chambers with a specifically prepared base or floor (which cannot be dismantled or moved in one piece) should be regarded as rateable as this would prevent the item from being moved and re-erected in its original state.

Similarly where a chamber forms part of a larger configuration of similar chambers it should be regarded as rateable if there is a “party” wall between chambers so that any one chamber cannot be moved without the substantial demolition of the adjoining chamber.

Tanks

As with ovens and other similar plant, most of the difficulties experienced with the rateability of tanks have been overcome by the Class 4 Table 4 size limit of 400m3 and, particularly following Elliott’s Bricks Ltd v Hartley (VO) 1990 LT RA 161, it is not anticipated that there will be any serious challenge as to the rateability of tanks in excess of 400m3 on the grounds that they are not in the nature of a building or structure.

Tanks with a total cubic capacity of 400m3 or less may still fall to be rated under Class 4 if they are not capable of being moved without the substantial demolition of any surrounding structure.

Tanks are also named in Class 2 Table 2(d), (e) and (f) and in both paragraphs 1 and 2 of the List of Accessories and will be rateable without limitation providing they are used or intended to be used as required by the respective Classes.

However tanks which fall to be considered under Class 4 will only be rated to the extent that they are in the nature of a structure and will only include such parts as form an integral part of the tank as a structure.

Thus whilst it would now appear to be accepted that floating heads form part of the rateable structure, no addition should be made to tanks rated under Class 4 for such items as paddles and heating coils, nor for insulation such as Rockwool which it can be accepted do not form an integral part of the tank as a structure (this does not apply to “spray on” polyurethane or fibreglass insulation).

Tipplers

Truck or wagon tipplers are named in the List of Accessories if used mainly or exclusively in connection with the handling, preparing or storing of fuel required for the generation or storage of power under Class 1 and will, to that extent, be rateable in their entirety. Tipplers also constitute a named item in Class 4 Table 3 and will be rateable under that Class but only insofar as they are in the nature of a structure.

Weighbridges

Weighbridges are not named under Class 4 (although historically they were) and only the pit may fall to be rated under this Class. Weighing machines used in connection with the handling, preparing or storing of fuel required for the generation or storage of power in or on the hereditament will however be rated in their entirety since they are named in paragraph 1 of the List of Accessories to Class 1.