Rating Manual section 6: valuation practice

Part 6: appendix 2 - examples of "de minimis" applied to agricultural property

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

Although not producing all-embracing guidelines, in a number of decisions the Courts have disregarded elements of ‘non exempt’ use when considering the exemption of “agricultural land” or “agricultural buildings”. However it is clear that the principle of ‘de minimis non curat lex’ should only be applied after having regard to all the facts and circumstances of a particular case.

Thus, see Garnett v Wand (VO) [1960] CA 53 RIT 670 concerning the use of pasture ground for sports purposes and United Counties Agricultural Society v Knight (VO) [1973] LT RA 13 in relation to car parking on two days a year in connection with an agricultural show.

As a stark contrast, in Moray and Nairn Assessor v Charles Meldrum & Sons [1968] LVAC RA 562, it was held by all three Scottish Law Lords that the sale of five or six pints of milk a day at a dairy was too significant to be disregarded under the de minimis rule.

The President of the Lands Tribunal in W Darlington & Sons (Holdings) Ltd v Langridge (VO) [1973] LT RA 207 indicated that 12% user “killed the de minimis argument”, but it should be noted that his words in no way indicate that he would have accepted the 6% user originally claimed as de minimis.

In Hambledon District Council v Buxted Poultry Ltd [1992] 1WLR 330 Glidewell LJ decided that the concept of ‘de minimis’ did not apply to the particular part of the legislation in issue, but if it was relevant 6-8% of output of a provender mill supplied to poultry farms other than those owned and occupied by Buxted Poultry Ltd could not be regarded as ‘de minimis’.

In Farmer (VO) Hambledon District Council and Buxted Chicken Ltd [1999] RA 61 CA the Court of Appeal decided that the time taken to produce pellets for an unconnected company of 1.4% did not amount to a substantial part of the time the mill was operated.

For most practical purposes, any activities which would result in rateability of land or buildings may be disregarded as de minimis if they represent no more than 5% of the total time. In cases where a number of minor activities take place, these should be aggregated before considering the application of the de minimis principle.

The test of “percentage of time” rather than “quantity” is preferred; otherwise farming enterprises or co-operatives engaged in a small fixed percentage of non-qualifying activities would cease to be exempt as they became larger. The LT decision on this point in Home Grown Fruits v Paul (VO) [1974] LT RA 329 should not be followed.

In any cases of difficulty, advice should be sought from the Technical Advisor.