Rating Manual section 6 part 3: valuation of all property classes

Section 337: day nurseries, nursery schools and other day care facilities for under fives

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Co-Ordination

“This is a Group. Responsibility for valuation and for ensuring effective coordination rests with the appropriate GVO. See Rating Manual - section 6 part 1. SCAT CODE: 085 G

2. Primary Description code EN1

2.1 The description default is Day Nursery and Premises. Premises falling within this description include those treated by OFSTED as “Childcare on Non-Domestic premises”. They should, where situated in England, be listed on http://www.edubase.gov.uk/ as “EY (Early Years) Settings”.

In Wales the inspecting authority is the Care and Social Services Inspectorate Wales whose website is www.csiw.gov.uk . Within this website is a register of service providers. Inclusion within this register is an indication that the facility should be described as a “day nursery” rather than a “nursery school”.

2.2 Some hereditaments will be more appropriately described as Nursery School and Premises. These will be included on the register on www.edubase.gov.uk where they will be distinguished from “EY Settings” and described as schools, or in Wales “Welsh Schools”. They will also be treated by OFSTED (and in Wales, ESTYN) as providers of “Nursery education”. For the purpose of registration an institution comes within the definition of a private nursery school –and is thus distinguished from the generality of day nurseries –if its distinctive educational emphasis is such as to fulfill each of these conditions:

  • It is open for the period of the school day during school term

  • It provides for children in the 3–5 age range


  • the standards for private nursery schools set out in 5.10 below are met.

3. Introduction

3.1 The purpose of this section is to provide a guide to the valuation of the various types of hereditaments, which are used for the provision of childcare for under fives.

Over the years there has been an ever-increasing demand for the provision of childcare arrangements and facilities. In the past there has been more of a separation between child minding and education. Whilst there is still some separation (see 3.2 above) providers are now widening their services to cover all early years ensuring the development, education and welfare of the child. Ofsted now inspect not merely nursery schools, but day-care providers also.

3.2 The demand for childcare now is not only from working parents. The government Sure Start initiative has offered for all 3- and 4-year-olds a guaranteed free, part-time (12½ hours per week, 38 weeks per year), “early years” placement. This can be in the maintained, private, voluntary and independent sectors.The Sure Start programme is intended to deliver “the best start in life for every child by bringing together early education, childcare, health and family support”.

3.3 Childcare for under fives is now available from a range of providers involved in the development and running of day care services. These include:

  • Departments in local authorities and other statutory bodies

  • Self-help or community groups and voluntary organisations

  • Private companies

  • Private individuals working as child minders

3.4 These services are provided in various types of facilities including:

  • Private and workplace day nurseries that offer full day care service for children aged between six weeks and five years

  • Local authority and independent nursery schools for three and four year olds

  • Day care providers/Nurseries/Playgroups offer half-day morning or afternoon care to children from two to five years old.

  • Childminders take care of children aged between 0 and 5 years old that are not related to the childminder and for reward in the childminder’s own home. Care is usually provided for the full working day.

  • Parent & toddler groups – where parents are responsible for their own children

  • Holiday schemes and clubs for school age children during the summer holidays

  • Nannies who may live in at the child’s home.

3.5 There has been a growth in the private sector provision of these facilities. Whilst this has mainly involved small one-site operators, large chain operators have now moved into the market. Bradford City Council has published guidance on setting up childcare facilities. This can be found in Appendix

4. Legislative Framework for Provision of Child Care

4.1 The main legislation concerning childcare provision in England and Wales has been

  • The Children Act 1989

  • The Care Standards Act 2000.

  • Childcare Act 2006

4.2 The Childcare Act 2006 is the overarching legislation providing the framework for the provision of unders fives’ childcare, which is referred to as the “Early Years Foundation Stage” (EYFS) this comes into full force from September 2008.

4.3 The legislation sets out responsibilities for provision and regulation to ensure the learning, development and welfare requirements of the child are met.

4.5 Local Authorities have the responsibility for local authorities to assess the local childcare market and to secure sufficient childcare for working parents. Childcare will only be deemed sufficient if meets the needs of the community in general and in particular those families on lower incomes and those with disabled children. Local authorities take the strategic lead in their local childcare market, planning, supporting and commissioning childcare. Local authorities will not be expected to provide childcare direct but will be expected to work with local private, voluntary and independent sector providers to meet local need. They have the duty to secure a free minimum amount of early learning and care for all 3 and 4 year olds whose parents want it. (Sections 6 7 8-11 & 13 of the Act)

4.6 The term ’early years provider’ is referred to and includes: maintained schools; non-maintained schools; independent schools; and childcare registered by Ofsted on the Early Years Register (to be introduced in September 2008), all of which are required to meet the EYFS requirements. From September 2008 it is the legal responsibility of these providers to ensure that their provision meets the learning and development requirements, and complies with the welfare regulations, as required by Section 40 of the Act.

4.7 The Act and its regulations require the early years providers to be registered and meet set conditions intended to protect young children and ensure a high standard of care. From September 2008, Ofsted under Sections 49 and 50 of the Act will have the responsibility for the inspection of childcare providers. When making their inspection Ofsted will have regard to the Statutory Framework for the Early Years Foundation Stage.

4.8 In Wales the inspection will be by the Care Standards in Education (CSIW)

4.9 The Statutory Framework for the Early Years Foundation Stage booklet

( http://www.teachernet.gov.uk/_doc/12628/EYFS%20Statutory%20Framework%20May%202008.pdf)) sets http://www.teachernet.gov.uk/_doc/12628/EYFS%20Statutory%20Framework%20May%202008.pdf out the legal requirements for standards of learning, development and care for children from birth to five which child care providers have to achieve. It also includes the legal requirements for the premises used.

4.10 All childcare facilities (settings) will be required to be registered by Ofsted in respect of all their provision for children from birth to the end of the EYFS. This is to ensure extra safeguards for the youngest and most vulnerable children.

4.11 The statutory framework provides for specific legal requirements for minimum staff that must be present with the children at any time. Also there are requirements for staff to have appropriate qualifications

The staff /child ratios will vary according to the age of the children.

In early years group settings:

0-2 years 1 member of staff to every 3 children

2-3 years 1 member of staff to every 4 children

In any early years provision:

3-5 years 1 member of staff to every 8 children rising to 1 to every 8 children (outside the hours of 8am to 4pm where the staff member working with the children is not a qualified teacher an EY professional or has Level 6 qualification)

In independent schools including reception classes:

3 and over 1 member of staff to every 13 children

(Staff member qualified Teacher Status)

rising to 1 to every 8 children (where the staff member is not a qualified teacher, an EY professional or has Level 6 qualification)

In Private and Maintained nursery schools (except in reception classes):

3 and over The early years provision in each class or group must be led by a qualified “school teacher”, with a level 3 qualified nursery assistant

1 member of staff to every 13 children The maximum number of children who may be appropriately cared for by a particular provider may be fewer than the maximum numbers set out in these ratios. Ofsted may make a judgement about the overall maximum numbers of children that a particular provider may be registered to care for which will be set out in the conditions of registration. This judgement will be based on factors such as the amount of space available. See below.

5. Premises Standards

5.1 The Act as part of the welfare provision of the child, requires that the provider’s premises have to meet standards.

5.2 The premises and equipment must be organised in a way that meets the needs of children.

5.3 In registered provision, providers must meet the following space requirements:

  • Children under two years: 3.5 m2 per child;

  • Two year olds: 2.5 m2 per child;

  • Children aged three to five years: 2.3 m2 per child.

Calculations of available indoor space should be based on the net or useable areas of the rooms used by the children (that is, not including storage areas, thoroughfares, dedicated staff areas, cloakrooms, utility rooms, kitchens and toilets)

In addition to the area per child stated in the requirements, there should be space within the premises to store children’s records, toys and personal belongings. There should also be sufficient space to use and store any specialist equipment needed, for example, by disabled children. This equipment should be quickly and easily accessible by staff at the provision so that those children can use it whenever it is required.

5.4 The provider must ensure that, so far as is reasonable, the facilities, equipment and access to the premises are suitable for children with disabilities.

5.5 The premises must be for the sole use of the provision during the hours of operation.

5.6 Wherever possible, there should be access to an outdoor play area.

5.7 Except in child minding settings, there should be a separate baby room for children under the age of two, but they should be able to have contact with older children and be transferred to the older age-group after the age of 18 months or as appropriate for their individual stage of development.

5.8 There should be at least one toilet and one hand basin for every ten children over the age of two. Also there should normally be separate toilet facilities for adults. There is a requirement for suitable hygienic changing facilities for changing any children who are in nappies.

5.9 There should be an area, which is adequately equipped to provide healthy meals, snacks and drinks for the children as necessary. Ideally, the provision will have a full kitchen. Where this is not possible, appropriate alternative arrangements should be made for the hygienic preparation and storage of food and drinks.

5.10 The provider must carry public liability insurance for the provision.

5.11 Where the early years provision takes place in a communal building such as a community centre or village hall, the part of the premises used by the early years provision should be for the sole use of the provision during the hours of operation. Ideally, the premises should have their own kitchen and toilet facilities but, where this is not possible, the provider should take steps to ensure that other users do not have a negative impact on the quality or safety.

6. Day Nurseries

6.1 Day Nurseries look after children under five for the length of the working day and throughout the year. Children will attend full and part time including sessional day care (see below), depending on the needs of parents of young children.

6.2 Day Nurseries may be established in purpose built or converted buildings. The accommodation requirements and space standards referred to in 6 above apply.

7. Sessional Day Care

7.1 Session operators include childminders, Parent/Carer & Toddler Groups that are open for mornings or afternoons only where no main meals are provided. Children aged from 3 to 5 rather than babies or toddlers, although some may admit children from the age of 2½, mainly use these facilities.

7.2 Sessional day care will be provided in a variety of premises. Many playgroups will share community centres, village or church halls with other users. Some rent rooms from schools where they are likely to have sole use of that space with (possibly) access to other facilities in the school. A few own their premises - often demountable buildings attached to a school or other institution.

Some sessional facilities such as playgroups are likely to use volunteers on a regular basis to work with the children. Regular volunteers should be treated as part of the overall ratio. There is still statutory requirement for staff and volunteers to have appropriate qualifications

8. Nursery Schools


8.1 A variety of institutions may describe themselves by this title. However not all providers describing themselves as “schools” will satisfy the definition in 2.2 above and the staffing requirements explained below. The criterion as to whether they are strictly nursery schools as distinct from day nurseries is whether they are registered as schools in http://www.edubase.gov.uk/, rather than “EY Settings”. Nursery schools provide a more direct and structured education for early years children aged 3 to 5 Some may be part of an independent school for older age groups. What distinguishes the early year provision provided by a Nursery School is that the children are under the oversight of a qualified teacher (that is, a person who has satisfied the requirements of the Secretary of State for Education and Science for qualified teacher status).

Support may be provided by a qualified nursery assistant (that is, a person with the certificate of the National Nursery Examination Board or a comparable qualification).

8.2 There is move by some independent nursery schools to widen their early year child care provision to include 2 years and younger. This provision will be dependent on their being suitable premises and staffing which meets with the statutory requirements referred to above.

Local Authority

8.3 Nursery schools, provided and maintained by local education authorities are County schools.

Itn the past Nursery Schools, being regarded by statute as providing Primary Education were treated as Primary Schools for valuation purposes. See Valuation below.

9. Sure Start ChildCare Centres

9.1 Children’s centres are service hubs where children under five years old and their families can receive seamless integrated services and information. By 2010, every community will be served by a Sure Start Children’s Centre, offering permanent universal provision across the country, ensuring that every child gets the best start in life

9.2 Local authorities have been given strategic responsibility for the delivery of children’s centres. They are planning the location and development of centres to meet the needs of local communities, in consultation with parents, the private, voluntary and independent sectors, PCTs, Jobcentre Plus and other key partners to deliver a range of services. Hyperlink

10. Child Minding

10.1 Child minders provide childcare more likely to be in a home environment and meeting a demand from working parents for children age 1 to 8. Child minders are required to be registered by Ofsted. Each child minder may care up to a maximum of 6 children subject to Ofsted approval.

10.2 Generally this type of childcare is provided in the child minders own home. See domestic non-domestic interface below.

Rateability and Valuation

11. Unit of Assessment

It is important the correct unit of assessment or what constitutes a rateable hereditament is determined. Identification of the hereditament is inextricably bound up with the concept of rateable occupation. Whilst in many cases the there is only a single occupier, the company or organisation running the childcare facility. However where facilities are provided adjoining to or within other shared buildings, it may not be clear who is in occupation because there is more than one possible occupier. Investigation will be necessary to determine whose occupation is paramount and what is the correct unit(s) of assessment. This is more likely to happen with playgroup and toddler groups, which may operate, from church halls and other meeting halls. Occupation is essentially a question of fact and it is important that as much information as possible is obtained. Guidance can be found in RM 4 Section 2, part 3, The House of Lords decision in Westminster Council v Southern Rail Co (1936) (dealt with in Ryde on Rating and the Council Tax C (132) et seq

The Hereditament Rating Manual: section 3 part 1

12. Use of Exempt Ppremises

Where Child care facilities are operated from exempt church halls or similar buildings reference should be made to Rating Manual: section 6 part 6 - part B: Churches, Church and Chapel Halls and Similar Buildings in particular where such premises are used as Children’s nurseries in particular: 3.2.6 Church and Chapel Halls used as Children’s’ Day Nurseries.

13. Non Domestic /Domestic Border Line

Consideration will have to be given to the Non Domestic borderline where childcare facilities, which are run from the private homes. Whilst this is mainly going to be of the child minding type of care there can be instances of day nurseries being run from adapted accommodation adjoining the operators domestic accommodation.

Bell v Rycroft (VO) [2000] RA 103 concerned a day nursery established in part of a semi-detached house. A garage adapted and converted internally with a connected building constructed in 1989 with adjacent WC and shower room were held to be rateable. Parts of the main house used concurrently with its continued use for living accommodation were regarded as de minimis. Planning permission for the nursery use had been given subject to a daily time limitation, and a maximum of 10 children under 5 years of age could be accommodated at one time. A minimum of 3 staff on duty was required at all material times. Outside nursery hours the ratepayer and his family used the whole premises, including the nursery, at their discretion. The extended garage building (Nursery space) was fitted and furnished for hat use.Having carefully considered the evidence and the submissions of the ratepayer as to the state of the affairs immediately before the end of the day ends” the member was not pursuaded that the use and occupation of the nursery space could reasonably be considered as other than non domestic. Any domestic use was found to be minor or ancillary and insufficient to displace the principal use.

Further guidance can be found in:

Council Tax Manual - Practice Note 8: Domestic / Non-Domestic Borderline

Council Tax Manual - Practice Note 8: Appendix 1 - Working At or From Home: The Domestic/Non Domestic Borderline

/TheLibrary/CTManual/council_tax_man_pn/v-ct-man-pn8- app1.shtml#TopOfPage

Council Tax Manual - Practice Note 8 : Appendix 2 - Examples of Domestic/Non Domestic Property – Homeworking




14. Referencing

14.1 The standard measurement should be NIA, as defined in The Valuation Office Code of Measuring Practice for Rating Purposes in England and Wales, and all referencing should be carried out in accordance with that basis.

  • It is important the type of childcare that is being provided is identified

  • Surveys should record the use of all space.

  • The number of registered children should be found on each occasion when the premises are visited. Including the age profile.

  • Note details from recent Ofsted inspections

14.2 As well as getting information direct there are a number of sources where further information about the property can be obtained:

Ofsted Web Site: - http://www.ofsted.gov.uk

The Edubase site contains a more easily searchable database with details of the registered numbers:


See Appendix I for website URLs for some of the main operators.

Also the National Day Nursery Association web site http://www.ndna.org.uk/

can provide details of their members’ day nurseries.

14.3 Details of the recent Ofsted inspections of individual childcare facility can be found on its web site: http://www.ofsted.gov.uk/

14.4 It is not expected there will be rateable plant and machinery, other than normal services; however there could be closed circuit television equipment where the details should be noted

15.Valuation Consideration and Method

15.1 Apart from the local authority nursery schools (see. below) It is expected that sufficient rental evidence will exist in the area of a Group (or cluster of Groups) to enable valuations to be carried out on a rental basis All rental evidence should be identified and appropriately adjusted and analysed on price per m2.

15.2 As pointed out in the referencing section above it is essential the type of facility being provided is properly identified to consider how the evidence reflects the type of operation being run including quality and adequacy of the accommodation having regard to the required space standards.

15.3 The principle difference between nursery facilities stem from those which are regulated to operate sessions only, as opposed to those which may typically accept admissions from 7.30 am to 6.30 pm. This in reality represents the single largest factor, which limits income receipts. Session operators include childminders, Parent/Carer & Toddler Groups with children from 0-5 years old. In the latter, nominal charges can be levied and adults stay and are responsible for their children - typically within a church hall, community or family centre. They do not normally operate in school holidays. Session operators will commonly have few children attending all day - sessions will run from circa 9.00 am to 12.00 pm and then from 12.30pm to 3.30 pm and open for 33 weeks in the year. Those nurseries with the full range of facilities will commonly trade between 51 & 52 weeks each year. In some circumstances the operator may be eligible for charitable relief.

15.4 Facilities - the most successful private nurseries, where higher rents will probably be payable, will commonly have a range of facilities which enable the nursery to offer the widest range of services. The more common of these include: -

  • There must be a kitchen, which should be of an appropriate size and adequately equipped to a standard, which enables one hot meal per day to be served with meals and snacks for children and staff. It should satisfy the requirements of the Environmental Health Officer with regard to hygiene and food safety regulations.

  • No room should accommodate more than 26 children and where possible the maximum should be lower for younger children.

  • There should be a separate room for babies and toddlers with easy access to nappy changing and good preparation facilities. Where possible there should be separate rooms or separate areas for noisy and messy activities, and a quiet area equipped and available for sleeping.

  • There must be suitable safe and secure outside play space, preferably adjacent to the building and exclusively for the use of the children. There should be a separate staff room/office available.

16. Valuation of Local Authority Nursery Schools

16.1 Nursery educationis provided and/or maintained by local education authorities within LEA County schools and voluntary schools. Frequently this is by means of nursery classes within primary or “First” schools which also take children from 5 to 7 or older. Such schools should be valued as other primary schools within the guidance contained in RMI 5 Section 590. Many LEAs provide separate nursery schools, which do not take children over the age of 5.; for these schools the basis if valuation requires scrutiny.

16.2 Basis of Valuation for separately assessed LA Nursery Schools

The hereditament is to be valued as vacant and to let, and as a nursery setting, not specifically as a local authority nursery school. It is therefore appropriate to consider whether having regard both to its location and its physical nature it would be likely, if vacant and to let, to attract a bid from a private operator. If so, it should be valued by rental comparison drawn from comparable private nursery schools and day nurseries. If the hereditament by virtue of its nature and/or location would not be likely to attract a private operator as a hypothetical tenant, then a rental/comparative basis cannot be used and the contractor’s basis should be adopted.

Appendix 1

Library of Useful Websites and URLs - Appendix I

Day Nursery UK Data base


National day Nursery association


Sure start

http://www.surestart.gov.uk/ OFSTED




Care and Social Services Inspectorate Wales


Appendix 2

29 October 2008


Sure Start Full Day-Care PDF

City Of Bradford: “Setting up a Day Nursery

1. Introduction

The scope of this Practice Note is to deal solely with early years provision of childcare covering Nursery Schools & Day Nurseries

The Special Category Code is 085 (Day Nurseries/Play Schools) and as a Group class the suffix letter is G.

2. Co-ordination

Co-ordination responsibilities are set out in Rating Manual section 6 part 1.

See Appendix 1 - beacon valuations. GRDMs are required to provide valuations of each of the beacon types to include in a co-ordination spreadsheet located in:

It is recommended that GRDMs or their nominated caseworker co-ordinate both within and across Group boundaries using the values from the beacon valuation exercise to identify any valuation inconsistencies with neighbouring areas.

Timetable - values should be included in the spreadsheet by **Friday 9th January 2008 **

3. Use of VO6005 to obtain factual information

See Appendix 2

All day nurseries should have been issued with a VO 6003, requesting rental and lease information.Data teams should then have issued VO 6005 supplementary questionnaire to recover additional factual information about the nature of the use.

4. The state of the market

Local authorities have been required under the Childcare Act 2006 to prepare “Childcare Sufficiency Assessments” which contain detailed analyses of childcare provision throughout their areas. These normally contain detailed demographic information about particular neighbourhoods, and average local tariffs charged for various types of child care. These assessments have been published and should be accessible on each local authority’s web site by searching “Childcare Sufficiency Assessment”.

5. Valuation

Rental evidence will probably indicate a wide range of values. These should be adjusted for all valuation sensitive factors to enable comparison. Caseworkers should utilise the returned information obtained from VO 6005 to assist in the resolution of any rental anomalies. It is important to exercise care when considering these factors, and these are considered more fully in the Rating Manual section.

Rental information should be analysed in the same way as for the main bulk classes by use of the Tone Setting Spreadsheet - see Intranet\Rating Homepage\Revaluation 2010\Spreadsheet support page

Practice note 2010: Appendix 1

Ref Description, Location & Size £/m2 - main nursery space
1 Type 1 - The best day nurseries. Modern purpose built, or substantially refurbished premises offering commercial child care. Capable of full day commercial use providing full day care with meals provided and areas set aside for sleeping and recreation. Operates for 51 or 52 weeks a year, from as early as 7:30 in the morning to as late as 6:30 in the evening. Best town centre location within the prime residential area with excellent public transport connections nearby. Size range > 200m2 a) Town : b) Post Code : c) Main Space RV : £ m2 d) Monthly Full Time Charge £ pcm
2 Type 2 - urban/ suburban solidly constructed buildings. Capable of full day commercial use providing full day care with meals provided and areas set aside for sleeping and recreation. Good road access but may not be optimally located as for Type 1. Increasingly these may be located on industrial estates. Operates for 51 or 52 weeks a year, from as early as 7:30 in the morning to as late as 6:30 in the evening. Size range > 175m2 a) Town : b) Post Code : c) Main Space RV : £ m2 d) Monthly Full Time Charge £ pcm
3 Type 3 - Rural nurseries in solidly constructed buildings, away from transport links for commuters, where there is less demand so occupancy rates tend to be lower. Premises remain capable of full day commercial use providing full day care with meals provided and areas set aside for sleeping and recreation. Size range > 175m2 a) Town : b) Post Code : c) Main Space RV : £ m2 d) Monthly Full Time Charge £ pcm
4 Type 4 - session care - solidly constructed nursery buildings which do not have kitchen facilities, and cannot comply with the requirements of the Children's Act to provide full day care. a) Town : b) Post Code : c) Main Space RV : £ m2 d) Monthly Full Time Charge £ pcm
5 Type 5 - adapted building of lower construction built of wood or similar. Situated in off peak locations catering to playgroups or session care and do not have kitchen facilities, and cannot comply with the requirements of the Children's Act to provide full day care. Size range 80-140m2 a) Town : b) Post Code : c) Main Space RV : £ m2 d) Monthly Full Time Charge £ pcm

Practice note 2010: Appendix 2






Is the property rented?

If the property is rented you may already have received from me a form for completion and return requesting details of the rent passing. If this has not been received by the Valuation Office Agency a further form may need to be sent.

Opening Times.

a) What are the standard operating hours

b) Is the facility closed for periods of the year?

c) Are their any restrictions or conditions which limit the full use of the premises. If so please provide details opposite

Please confirm for the age range(s) shown

a) the numbers of children actually attending currently

b) registered number (Ofsted) which the school/facility can cater for.

Of those numbers actually attending detailed in 3. above, please confirm the number of children who attend on a full time or part time basis

Please confirm the current charge level for each of the categories detailed above, and include your current brochure if one is available.

Please indicate the Price Period :-

Per Part Time Session (PTS)

Per Day (PD)

Per Week (PW)

Per Month (PM)








Yes / No



(b) Registered

Children under 2 years


Children aged 2 years


Children aged 3–7 years


Part Time

Full Time

Children under 2 years


Children aged 2 years


Children aged 3–7 years


Part Time

Price Period

Full Time

Price Period

Children under 2 years





Children aged 2 years





Children aged 3–7 years





Brochure Included Yes / No

Practice Note: 2005: Equestrian Cross-Country Courses

1. Co-ordination Arrangements:

This is a Group Class; Co-ordination responsibilities are set out in Rating Manual – section 6 part 1

There is no specific R2005 Special Category Code and therefore Special Category Code Leisure Miscellaneous 993 should be used. As a Group Class the appropriate suffix letter should be G.

In the unlikely event that an equestrian cross-country course has a rateable value over £25000, it will fall to be dealt with by Specialist Rating Unit Team 2 (Licensed and Leisure).

2. AVD Economic Considerations:

As a generality, this type of enterprise is gaining in popularity, from both the riders’ and landowners’ perspectives. However, there is evidence developing that appears to suggest a creeping oversupply of courses in some areas. Accordingly, a wide perspective of the local conditions and competition should be taken when attempting to assess enterprises of this type, for both Rating List compilation and subsequent maintenance.

Further uncertainties were brought into this particular market by the prospect of a Hunting Bill to ban hunting going through Parliament and the dramatic rise in third party insurance cover for equestrian activities during 2002/03.

3. Valuation Guidance

As indicated in the main Section, valuations should be based on a percentage of gross receipts for the enterprise. In this respect, great care should be taken to ensure that the receipts being considered do only relate to this specific undertaking.

It is vital to ensure that accounts reflect the reality of the operations. In this respect, it is possible, for example, that timber for the construction of the jumps, together with the labour to erect them, has come from the farm and these costs may not show in the accounts.

From the evidence currently available, income levels fluctuate and are very speculative. In Farm Development Review volume 13 no 10, published in August 1999, it was reported that the 21 courses then currently operating achieved between £2,500 and £11,000 a year, although discounts can materially affect income eg members of the British Horse Society and local pony and riding clubs. Accordingly, in view of this high risk factor and likely turnover being towards the lower end of the Tourist Attractions spectrum, the percentage to be adopted should be in the 4% to 7% range. Wherever possible, comparison should be made with other similar courses when both estimating receipts and determining the percentage to be adopted.

Consideration will need to be given to the total set up costs, being mindful to obtain details of any Rural Enterprise Grants obtained.

Care is needed that a commensurate and consistent percentage is adopted, whilst also bearing in mind other local tourist attractions. Reference should be made to Rating Manual Section 6 part 3: section 1085 Tourist Attractions

It should be remembered that margins on these, and other similar rural diversification operations, tend to be variable and a rating assessment based on an unnecessarily over-optimistic financial forecast could easily turn a small profit into a substantial loss. Courses situated near large centres of population may be more profitable than those located in more remote areas, but each case will depend on its own facts. Therefore there is a real need for VOA caseworkers to adopt a realistic “stand back and look” approach before making a final decision on value.

Further guidance can be obtained from the CEO Local Taxation Technical Adviser.