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

Section 385: farm diversification

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

1. General

Preface: A working knowledge of Schedule 5 LGFA 1988 paragraphs 1-8 relating to exemption of agricultural premises will be an essential pre-requisite in deciding the borderline between exempt and non-exempt land and buildings referred to in the whole of this section.

1.1 Introduction

The fall in farm incomes in the latter part of the 20th century led to many farmers looking to diversify from purely agriculture into other forms of business enterprise within the farm hereditament. Traditional forms of diversification would be the use of farmhouses or cottages for either bed and breakfast or self-catering holiday lets. Farm shops have been in existence for many years, developing from small-scale direct sale of farm produce at the gate, to large retail buildings buying in quantities of goods for re-sale. The development of farmers’ markets and other retailing opportunities has also led to surplus farm buildings being used as meat cutting-rooms, cider and apple juice presses, dairies for cheese and ice cream manufacture and, on larger farms, further food processing, e.g. packhouses, potato crisp and canning factories etc.

In addition, some farmers have also sought to develop leisure enterprises. In this respect, since the 1980s these have developed and there is now a recognised “farm attractions” industry whose voice is heard through such bodies as the National Farm Attractions Network and the Country Land and Business Association (CLA).

Modern farm leisure diversification can take many and varied forms from paintball war games, archery schools to farm parks. Any non-domestic leisure use which does not come directly under the Schedule 5 LGFA 1988 exemption provisions for agricultural land or agricultural buildings, and is carried on within the boundaries of the farm hereditament, will be rateable. This section gives guidance on recognising and valuing elements of farms, which are non-exempt land and buildings

1.2 Non-Agricultural Uses

Non-agrarian diversification can be undertaken in many ways but might be classified under three main heads. Firstly, simply non-agricultural use of land and buildings for industrial, warehousing or retail purposes; a second distinct type of non-exempt use is the farm based leisure attraction commonly called Farm Parks, which will be dealt with first in this section (though many of the aspects considered are applicable to all farm-based attractions). Thirdly, uses such as 4 x 4 off-road courses, horse trials, equestrian cross country courses (e.g. UK Chasers), eventing courses, paintball parks and shooting grounds.

In addition to the above, there is the increasing use of agricultural land for seasonal uses and major events throughout the year such as 5 CL caravan sites, campsites, maize mazes, motocross, carriage driving, gymkhanas, agricultural shows, music festivals, steam fairs etc.

It has been noted over recent years that in particular there has been a growth in the number and size of open air festival sites. These events are held in a wide variety of locations not just upon what would otherwise be agricultural land. Examples are also found in the grounds of historic houses, on motor racing circuits, and in public parks. They are rateable if they are not exempt land. Broadly land is exempt from rating if it is next to and occupied with a dwelling (see Rating Manual section 6 part 11), is used wholly as agricultural land or is a public park (see Rating Manual section 6 part 6). This exemption for public parks extends to council run parks and Royal parks. What needs to be considered is if individual festivals should be assessed just as any other non-domestic use.

One-off and occasional festivals are unlikely to attract a rating assessment – so for instance a village fete held on the local common will not attract an assessment. In the case of a festival in a public park which qualifies for the formal exemption from rates, it is likely that the use for one week for a festival will not frustrate the exemption as this may be properly considered as ancillary to the overall use as a public park.

It is important to emphasise that it is unlikely that a one-off use of a property as a festival site will result in an assessment: it is generally the repeated and/or substantial use which is likely to mean that a site becomes rateable.

The necessary considerations to be taken into account where a festival is held on what is otherwise agricultural land are covered in the remainder of this section.

2. Farm Based Leisure Attractions

2.1 What is a farm leisure attraction?

Farm leisure attractions are a growing industry, where the public are encouraged to pay for a visit to the farm to engage in various activities such as viewing rare breeds, farm zoos, farm tours, nature trails, fishing, go-karts or quad bikes, special events e.g. Christmas fairs and shows, farm museum/exhibitions and arts and crafts displays. Farm leisure attractions generally need to provide more than just animals and therefore play equipment, demonstrations and staff explanations (to provide a degree of education) are normally present. Non-agricultural buildings are very likely to include an administration office, gate kiosk, café, play barn and gift shop, animal pens and enclosures, sheds housing vintage tractors and implements, adventure play areas, etc. A linking theme throughout is the encouragement of the public to come to the farm, for one reason or another, to enjoy a day out and to pay for the privilege. This view is confirmed by the following extract from the useful Farm Attractions leaflet produced by the (erstwhile) Welsh Office:

“Farm attractions provide facilities for leisure, entertainment and education within the context of a working farm. They are a recent development, with over 80% started since 1980, reflecting increased leisure time and detachment from farming and countryside in daily life.

Most farm attractions offer a variety of activities for visitors. These can relate to an existing farm activity or resource, a family member’s hobby or be new activities. Possible activities and attractions include: - rare breeds, a farm tour, a nature trail, a children’s play area, a farm museum, special events and exhibitions, arts and crafts, farm shop and café, PYO, horse rides, fishing, go-karts and quad bikes. Activities can be simple, e.g. access to trails, gift shop and exhibits; or interactive, e.g. hands-on crafts or interaction with stock, rides etc.”

2.2 The rateable occupier and hereditament – correct identification

2.2.1. Once a non-exempt use has been identified, the most important first steps are to identify the rateable occupier and to define correctly the extent of the hereditament. Where the rateable occupier of the attraction is the person farming the unit, the hereditament will extend to the boundaries of the total holding and the extent of the rateable hereditament will be defined as the whole farm including the farm leisure attraction.

2.2.2 The identification of the correct occupier will help to determine the extent of the hereditament. If the farm has the same occupier as the attraction, then as stated above the boundaries will be those of the farm. However, it will only be exempt ‘to the extent that’ it comprises agricultural land and buildings, under paragraph 1 Schedule 5 LGFA 1988.

2.2.3 In these cases, it will be necessary to add to the description in the rating list the words “part exempt” to satisfy the requirement in section 42(3) LGFA 1988 for example as “Farm Park (part exempt)”. Also, it may or may not be a composite hereditament (section 42(2)(b) requiring a composite indicator depending on whether there is domestic accommodation within the boundaries of the farm. Although the decision in Cartwright (VO) –v- Nickerson Zwann Ltd, [2005] RVR 319 found that the omission of the words “part exempt” in the description is not fatal to the entry in the rating list, VOs are advised to adopt best practice and use the “part exempt” suffix.

2.2.4 Where the occupation for non-agricultural use is only transitory then the rateable occupier will be the occupier of the farm on which the non-agricultural use takes place. Transitory will include all such uses, e.g. steam fairs, music and other themed festivals, where the use including setting up and taking down is up to two months and perhaps longer.

In the case of the Great Dorset Steam Fair Counsel’s Opinion was sought on the treatment of a seasonal use for a steam show on a 600 acre site by a tenant who was in occupation for approximately 28 days each year (including set-up and take down time). During the rest of the year the land was used for agricultural purposes by its owners except for a small part occupied for storage for the entire year for the purposes of the show. The organisers of the show ploughed the land before handing it back to the two farmers who owned the show site. The opinion given was that the occupation for the show was too transient to constitute a rateable occupation. However, Counsel considered that the landowners were in actual occupation farming the land throughout the year with a requirement that the steam fair restore the land for agricultural use at the end of their event. Furthermore the farmers were in paramount occupation in that they controlled the land for the vast majority of the year and the timing of the occupation by the steam fair was dependent on farming operations albeit with a contractual arrangement for the steam fair to carry out their event. The landowners’ occupation was obviously beneficial to them. Counsel concluded that the landowners were in rateable occupation. From this he found there should be three rateable hereditaments – a) each landowner’s land (rateable to the extent that it was used each year as part of the site of the steam fair). Counsel considered it appropriate for the assessments to remain in the list all year. b) The land remaining in use all year for storage of steam fair equipment in the occupation of the steam fair. The values applied related to the non-agricultural use (the steam fair) although this was only for a four week period in total, the annual value was far in excess of the residual agricultural use.

2.2.5 If there are multiple uses, the hereditament should normally comprise one assessment, with exceptions being where, for example, any self catering accommodation or a farm shop has street frontage, or separate access, and is clearly run as a separate enterprise from the attraction complex.

2.3 Separate hereditament

It will often be the case that a farmer will set up a separate trading company in order to run a diversification project, or may be approached by another company to run the attraction for him. Where a farm leisure attraction is run by a separate trading company from the farm, then the boundaries of the farm leisure attraction alone will comprise the hereditament, and will not be described as part exempt, unless within the attraction boundaries, there are in fact agricultural operations occurring.

3. Farm Parks and similar attractions

3.1 Referencing

3.1.1 Accurate details of the whole hereditament, i.e. the entirety of the farm, as well as those elements occupied as the farm attraction should be obtained and a plan showing both completed. Details of the occupier both of the farm and the attraction should be obtained including any charitable status and details of charitable and non-charitable parts. Details of other units of occupation such as self-catering holiday cottages, let-out parts and units of domestic accommodation should also be obtained.

3.1.2 The degree of referencing required will depend upon the appropriate method of valuation; low investment enterprises may be valued on a rentals approach requiring a standard survey to determine the areas of the various elements of the occupation whilst those enterprises that have high levels of investment and are designed to give the visiting public a “day out” are more likely to be valued on a Receipts and Expenditure basis which requires a different referencing approach. An inspection should seek to gain as wide an understanding as possible of how the entirety operates, why it was set up, details of the ratepayer, the public it is seeking to attract and plans for future changes.

3.1.3 Referencers and caseworkers will need to gather as much information as possible, not just the size, nature and character of the buildings. In all cases required information will include location, access, proximity to centres of population; opening times (both period the attraction is open through the year and daily hours); prices for admission including details of differential pricing for school parties, children and pensioners and details of any annual membership scheme; refreshment facilities including a note of type of fare and sample prices; a note of any competition or nearby complementary facilities. A publicity leaflet or visitor guide should be included in the survey details.

3.1.4 For the larger properties information will need to be gleaned on gross receipts in the form of gate and other takings, levels of likely expenditure (i.e. in order to achieve the level of takings, high expenditure may be required e.g. extensive advertising), numbers of visitors, the nature and pattern of the business and an impression of the scale and success of the business as an addition to the farm hereditament, in order to get the fullest picture possible. A Miscellaneous Receipts and Expenditure Form of Return VO 6036 should be served where full accounts are not available.

A referencers’ checklist for farm attraction properties forms Appendix 1 to this section

3.2 Valuation approach - commercial enterprises

3.2.1 A primary consideration is whether (or not) the presence of the enterprise adds value to the hereditament. In short, is it likely to make money or mitigate losses elsewhere? If so, would the bid of the hypothetical tenant be increased, or the rental income expectations of the hypothetical landlord be enhanced? The answer to these questions will generally come from a study of the accounts and an analysis of visitor numbers, or direct rental evidence. Numerous variant types of enterprise are likely to be encountered, ranging from the simplest to the most complex.

3.2.2 The direct rentals method is likely to be most appropriate for the “low level” type of operation. The caseworker will need to be mindful of the likelihood of local competition in this sector of the market and therefore should ensure that individual levels of value are commensurate with one another having regard to factors such as location, proximity to centres of population and major roads, access, physical characteristics of the land and buildings, size, facilities, amenities, use, planning permission, and visitor numbers.

3.2.3 There are very few open market rents available solely for farm attractions. It is considered that a Receipts and Expenditure (R & E) method (See Rating Manual section 4 part 2) will be the best basis on which to establish rental value, bearing in mind the gate receipts will be fundamental to a tenant’s potential bid. That said enquiries should be made to discover the detail of any landlord and tenant relationship that may exist concerning the occupation of the property. The industry has expressed concerns about new businesses with low receipts and large buildings being valued solely on a price per square metre basis. An R & E approach will give a consistent basis, which should take account of the nature, location and overall viability of the business.

3.2.4 If full accounts are presented for a combined operation, a rigorous approach to analysis of accounts will be necessary, to exclude income and cost purely attributable to agricultural activities. On a holding still being run as a farm inappropriate costs included in the diversification accounts must be disregarded. The farm attraction may only be commercially viable since it is based on the farm in the first place (and vice versa) and in such cases it will be necessary to unravel the inter-relationship between the two when considering the accounts.

3.2.5 If possible more than one year’s receipts should be considered. It is often the case, particularly with new ventures, that the first year’s receipts may be higher or lower than the fair maintainable level whilst the attraction may be enjoying a honeymoon period or, conversely, experiencing an initial difficulty in establishing itself. These types of attraction can be particularly sensitive to bad weather, and a reduced income during a poor summer one year may be offset by higher receipts in a good summer the next year. Therefore, it is extremely important to understand the nature of the business before deciding the fair maintainable level of receipts at the AVD.

3.2.6 If full accounts are available, with the cooperation of the parties, a full R & E valuation will be possible. Where, however, this is not the case, a percentage applied to the estimated level of fair maintainable receipts should be used (see 3.4 below). Whilst an R & E method will be preferable in most ‘commercial’ enterprises, there have been some historic smaller hereditaments whose assessments may have been arrived at on a comparative rental approach. It may be appropriate to compare both methods, to show that all methods have been examined in approaching the valuation.

3.2.7 Where reliable direct rental evidence does exist, this will have to be given appropriate weight when considering the evidence and establishing value.

3.3 Valuation Approach – hobby/charitable type

3.3.1 There will be some usually low-level or small scale enterprises where the occupations are not going to make a profit and an R & E approach will not obtain the right answer. Examples might be falconry, owl rescue, heavy horse and animal rescue centres where there is little or no commercial activity. Having regard to their size, location and nature it might be difficult to envisage a significant level of receipts, even by a ‘commercial’ operator.

3.3.2 In this case, a rentals approach remains the only appropriate method. The value to the occupier may best be estimated by looking at the ‘opportunity cost’ of renting similar quality buildings on farms in the locality. The level of value might be pitched at less than the nearest alternative B1/B2 building in the locality (which would be unaffordable to the tenant), but at a level which would realistically reflect negotiation between a farmer willing to let an old agricultural building, and a tenant needing accommodation for a special but compatible use.

3.4 Percentage of receipts

3.4.1 Following from 3.2.6 above where a percentage of gross receipts is to be adopted, choice of percentage will depend upon a number of factors including the relationship between receipts and expenditure, i.e. a medium turnover with low expenditure may produce a higher net profit than high receipts coupled with high expenditure etc. An attraction that has animals, particularly of the more exotic species, is likely to have higher running costs, which would support a percentage towards the lower end of the range. It is the ‘zoo’ end of the range that is likely to have the highest running costs and virtually no ‘dead stock’ value. Special animal diets and high veterinary bills will contribute to this. However, with combined accounts with an agricultural holding, care should be exercised to ensure that ‘farm’ running costs are not offset against the farm leisure attraction and any dead stock value recorded in the farm accounts. Other farm attractions at the lower end of the percentage range will tend to be those where there is a more limited market such as some located in the remoter tourist areas where the season is restricted to the school holidays (e.g. Easter, Whitsun and the summer school holidays).

3.4.2 The most valuable farm attractions are likely to be situated on the edge of an urban fringe, especially in more affluent areas. Those with some indoor facilities which enable them to be patronised all year round are also likely to be more valuable. They are likely to generate a high income with relatively low overheads. This also applies to busy holiday locations (like parts of the South West) with long seasons (February to October). The best will have a few domestic animals, comprehensive indoor and outdoor play facilities for youngsters, large substantial outdoor facilities (such as an assault course) and cafes, restaurants and shops. Purely animal based attractions may have the highest overheads and hence lower percentage to RV, depending upon the types of animals kept.

3.4.3 For the vast majority of premises the percentage range will generally be between 6% for the lower value properties with high overheads to 9% of gross receipts for the best.

3.4.4 Stand back and look: After the application of a percentage of Gross Receipts valuation method (which is a short cut of the full R & E) the valuer should stand back and look to check whether it results in a realistic figure having regard to the location, facilities provided and the inputs required by the occupier.

3.4.5 Where further guidance is required this should be sought from the Leisure Attractions Class Co-ordination Team or Specialist valuer.

3.5 Description in the Rating List

The description should be, “Farm Leisure Attraction (part exempt)” or “Farm Park (part exempt) with a composite indicator where required. Scat code 284 (Tourist Attractions) should be used with the valuation input to the Non Bulk Server under that class.

4. Shooting grounds and Clay Pigeon Shoots

4.1 Issues to be resolved

  • What is the hereditament?

  • Who is the rateable occupier?

  • Does the land or land and buildings still qualify for exemption as agricultural premises despite the clay pigeon shooting?

4.2 What is the extent of the hereditament?

The questions to be answered rely on first principles. Does rateable occupation of the clay pigeon shoot have the defining criteria of a hereditament? Is it in separate occupation and does it have a separate defined curtilage within the farm?

A clay pigeon shoot will comprise either just bare land, or land and buildings and other structures. Are the permanent features of the shooting ground or clay pigeon shoot evident throughout the year? (car parking areas, widened gateways, towers, club house structures, buildings, fences, shooting ranges). Is the occupation exclusive to the shoot occupier? Does the land or building actually revert to agricultural operations between shoot meetings? Where the property is being regularly used for shooting, simply putting sheep onto the land to reduce the growth may not qualify as an agricultural operation.

The farmer is the occupier of the farm hereditament. It will need to be clear that either another hereditament has in fact been created, or the activity is taking place under the farmer’s control within his own farm hereditament.

4.3 Who is the paramount occupier?

This relates directly with the above. If there is a separate exclusive occupation of part, then there will be two hereditaments, with two occupiers, the farmer (agricultural land and buildings exempt) and the occupier in control of the clay pigeon shoot (not exempt). If the person in control of the clay pigeon shoot is the farmer, there will be a part exempt hereditament (see 2.2.3 above).

The nature of the agreement the clay shoot has with the farmer, and whether the land reverts back to the farmer between shoots could be a vital factor in deciding this issue.

4.4 Is the land still in fact agricultural?

In relation to bare land the provisions set out in Paragraph 2(1)(a) and Paragraph 2(2) Schedule 5 LGFA 1988 will need to be considered carefully.

These provide that:-

2(1) Agricultural land is:-

(a) land used as arable, meadow or pasture ground only

2 (2) **But agricultural land does not include - **

(d) land used mainly or exclusively for purposes of sport or recreation,

Once the facts have been established, the exemption legislation can be examined to establish the extent of any non-exempt use.

There may be significant permanent features/buildings/structures within the relevant part, which relate solely to use for clay pigeon shooting, and these will help to identify the relevant part, and give indications as to main or exclusive use. These buildings and structures will not qualify as agricultural buildings under Paragraph 3(a) Sch 5, even if partly used for farm purposes when not occupied by the shoot. This is because of the “solely used” provisions set out in Paragraph 8(3) schedule 5. If the farmer is identifiable as the occupier of the clay pigeon shoot, and the part of the farm hereditament given over to clay pigeon shooting is rateable, then the hereditament should be described as, ‘part exempt’.

4.5 Valuation

Where the shooting ground is rented at arm’s length, the rent subject to adjustment for tenant’s improvements should be the starting point for calculation of the rateable value. For other sites where there are numerous improvements, and particularly for the larger sites with cafes, shops parking areas, often numerous shooting stands and launch towers where the use is commercial, the preferred basis of assessment will be the receipts and expenditure basis. Where commercial, i.e. operated with the aim of making a profit it will not be appropriate to value buildings and land with regard to values used for sports clubs where ability to pay will be a consideration.

The web site of the Clay Pigeon Shooting Association is www.cpsa.co.uk

4.6 Description in the Rating List

The description should be “Shooting Ground and premises” or “Clay Pigeon Shoot and premises” for those sites which are hereditaments in their own right. Where the clay pigeon shoot is part of a larger farm hereditament then the description should be “Shooting Ground at XXXX Farm (part exempt)” with a composite indicator where required.

Scat code 296 (War Games Courses/ Miscellaneous Agricultural Use) should be used with the valuation input to the Non Bulk Server under that class.

5. Maize Mazes

5.1 General

The principles explained above relating to shooting grounds and clay pigeon shoots will apply equally to maize mazes. Maize mazes are a temporary, though recurring, use of what is usually otherwise agricultural land. The use as a maize maze normally coincides with the school summer holidays with sometimes additional weekend opening in September. Often, to add to the attraction, there may be refreshment facilities, children’s rides and animals to view. Car parking and toilet facilities are typically provided on site. In this type of attraction a farmer may devote a field to planting of maize and then cut a maze through the standing crop and charge an entrance fee for public admission. These mazes may generate considerable amounts of income for the period of their operation (examples producing up to £100,000 in one season may occur).

5.2 Separate Assessment

If the maze is an ancillary feature of a larger farm leisure attraction/farm park, then its existence within the larger hereditament should already be accounted for. If, however, it is a stand-alone attraction, then normal rating and exemption principles will apply.

5.3 Non-Agricultural Use

Whilst it might be argued that the actual days of the maze being used by the public is less than 50% of the year for the purposes of 2(2)(d) and therefore not mainly or exclusively used for recreation, it is considered that neither the growing of the maize or the use of the maize field for the purposes of recreation meets the provisions in paragraph 2(1)(a). This is because it will not satisfy the ‘only’ test for arable agricultural land. The loss of agricultural exemption arises from the fact that the land is no longer arable meadow or pasture only. The agricultural cycle is to be assumed to be the whole year of which growing the crop takes up part and the Maize Maze attraction the remainder. In the usual case where the farmer operates the Maize Maze and the farm on which it is situated the hereditament will comprise the whole farm together with the dwelling house, not just the fields on which the maze exists, so a composite, partially exempt hereditament will exist in these circumstances. Since the entire farm is the hereditament, where the maize maze is sited across public roads in some years from the buildings or house, or is even in a different parish, the assessment will remain.

Where the same field or different parts (fields) of the hereditament are used from year to year for non-agricultural purposes, a partially exempt hereditament will remain. Following legal opinion received on the Great Dorset Steam Fair the hereditament will be the farm of which the maze forms part and the assessment consequently will remain in the Rating List for the entire year. Where the maize maze ceases to exist on the hereditament permanently, and the land reverts on an annual basis to purely agricultural use, then the non-domestic assessment can in these circumstances be deleted. It is not correct for the maize maze to come in and out of the Rating List on an annual basis.

The official web site of The Maize Maze Association is www.maize-maze.com

See Appendix 2 to this section which gives a fuller explanation of the law in Schedule 5 taking into account decided cases.

5.4 Valuation

Valuations should be based on receipts from the venture. When considering accounts care should be taken to exclude all items both of income and expenditure not directly arising from the maize maze attraction. It is often straightforward to identify those heads of income generated by the rateable attraction. Inevitably there is far more of a problem identifying the relevant expenditure. It is frequently the case that those which have high turnovers also have the highest proportionate expenditure.

Where further guidance is required this should be sought from the Leisure Attractions Class Co-ordination Team or Specialist valuer.

5.5 Description in the Rating List

The description should be, “Maize Maze at xxxx Farm (part exempt)” with a composite indicator where required. Scat code 284 (Tourist Attractions) should be used with the valuation input to the Non Bulk Server under that class.

6. Off-Road Driving and Quad Bike Courses

6.1 General

These courses will be found in a variety of locations but often running through and across otherwise exempt agricultural land or forestry. The courses will often supply vehicles particularly for tank driving and similar but many off-road courses will offer the paying public the opportunity to drive their own vehicles on the course; some will offer training in driving off-road.

6.2 Referencing and Valuation

The issues of occupation and paramount control will be similar to those for shooting grounds at Section 4 above. Where it is established that there is a separate hereditament then the rent paid will be the best evidence of value. Care should be taken at the referencing stage to record details of any buildings used as workshops or garaging which may be some distance from the course together with details of any improvements made by the tenant such as access roadways.

The following web sites may be useful in gaining background information and identifying sites www.borda.org.uk and www.ukoffroad.com.

6.3 Description in the Rating List

The description should usually be “Off Road Driving Course at xxxx” with the addition of “part exempt” when part of a farm and a composite indicator where required. Scat Code 296 (War Games Courses/ Miscellaneous Agricultural Use) should be used with the valuation input to the Non Bulk Server under that class.

7. Motor and Motorcycle Sport

7.1 General

Various forms of motor and motorcycle sport take place on otherwise exempt agricultural land, e.g. motocross and grass track racing. Many will be occupied by the relevant sport on an informal basis; others will pay a rent, but invariably for unimproved agricultural land. The motorsport occupier will often undertake improvements; these will vary from site to site but for most forms of sport will involve grading of the track. For larger and more formal sites reference should be made to Rating Manual section 6 part 3 - section 690: Motorsport.

7.2 Valuation

Where rents are available which are arm’s length agreements these will form the best evidence as to the rental value of the sites where there has been little or no improvement by the tenant. Sites and intensity of use will vary and comparison of sites that do not have reliable rents with those that do is complex, the sites may be very different in nature and/or very distant from each other.

The preferred basis of valuation is R&E other than for sites with no, or little, improvement. This information can then be used as assistance to value those sites which are not rented, have unreliable rents or substantial improvements and to ensure that there is a consistent and fair basis across all sites.

There are various sports bodies, the main organisations include the Autocycle Union, whose web site is at www.acu.org.uk and the Amateur Motorcycle Association at amca.uk.com; these may be of use for background information and in identifying sites.

7.3 Description in the Rating List

The description should be “Motocross site at XXXX” or similar. Where the farmer is in paramount control then the description should include the words “part exempt” and a composite indicator where required. Scat Code 296 (War Games Courses/ Miscellaneous Agricultural Use) should be used with the valuation input to the Non Bulk Server under that class.

8. Paint Ball and War Games Sites

8.1 General

Sites for paintball games are often areas of woodland and scrubland together with some open country. The sites, where rented will often be in an unimproved state and the occupier will often undertake a number of improvements. The level and standard of works carried out will vary considerably from site to site and will usually be related to the numbers using the site. Improvements will include changing rooms, hot and cold showers, toilets, shop, covered seating, catering facilities, access improvements, car parking and fencing of the site. Individually the improvements may in themselves be minor but taken together they may substantially alter the nature of the hereditament.

8.2 Valuation

Where rents are available which are arm’s length agreements these will form the best evidence as to the rental value of the sites where there has been little or no improvement by the tenant. However, for the many sites which are owner-occupied, or not on an arm’s length agreement this basis is not available. Paintball sites are widely dispersed and in varying locations across the country and comparison of sites that do not have reliable rents with those that do is complex, the sites may be very different in nature and/or very distant from each other.

Even where rents are at arm’s length there are relatively few sites that have little, or no, improvement carried out by the tenants. The rents for these sites would not usually reflect the value of the improvements. For these reasons for this type of leisure attraction, as for many others, trading information should be sought. The preferred basis of valuation is R&E for all but the most basic small sites. This information can then be used as assistance to value those sites which are not rented, have unreliable rents or substantial improvements and to ensure that there is a consistent and fair basis across all sites. It is likely that those sites with higher turnovers will also have higher costs in type and level of equipment together with number and training of personnel.

The main industry organisation is the UK Paintball Sports Federation, whose web site www.ukpsf.com may be of use for background information and in identifying sites. Larger multi-site operators include Skirmish Paintball www.paintballuk.com, Go Ballistic www.goballistic.co.uk and Delta Force www.paintballgames.co.uk.

8.3 Description in the Rating List

The description used should be “Paint Ball Site at xxxx” or “War Games Site at xxxx”. Scat Code 296 (War Games Courses/ Miscellaneous Agricultural Use) should be used with the valuation input to the Non Bulk Server under that class.

9. Ropes Courses and Aerial Ropeways

9.1 General

These will usually be a separate hereditament in the occupation of the ropes course operator, and not part of a larger exempt forest hereditament. In some cases they will be operated by the occupier of a larger leisure hereditament as a franchise (e.g. safari park) in which case they will form part of that hereditament and the valuation should be adjusted appropriately.

9.2 Valuation

The preferred basis of valuation is R&E. Where further guidance is required this should be sought from the Leisure Attractions Class Co-ordination Team or Specialist valuer.

9.3 Description in the Rating List

The description should be “Ropes Course and premises” or “Leisure Attraction and premises” if the name of the operator is in the address. Scat Code 284 (Tourist Attractions) should be used with the valuation input to the Non Bulk Server under that class.

10. Other Uses

The instructions for the following uses will be found elsewhere in the Rating Manual:

Game farms: See Rating Manual section 6 part 3 - section 434.

Bed and breakfast: See Rating Manual section 6 part 3 - section 125 Guest Houses and Bed and Breakfast Accommodation.

Certificated Locations (5CLs): See Rating Manual section 6 part 3 - section 185 Caravans, Caravan Sites, Parks and Pitches

Letting cottages: See Rating Manual section 6 part 3 - section 480 Holiday Accommodation (Self Catering).

Equestrian Cross-Country Courses: See Rating Manual section 6 part 3 - section 335.

Eventing Courses: See Rating Manual section 6 part 3 - section 373.

Point to Point Courses: See Rating Manual section 6 part 3 - section 795.

Polo Grounds: See Rating Manual section 6 part 3 - section 798.

Appendix 1 : Farm Attractions Operation Checklist

Comments / Descriptions
Name of Farm Attraction:
Contact Details:

About the Property

it part of a larger farm? YES / NO If yes, plot roughly the farm / attraction boundaries on map
What sort of farm is it?
When did the farm attraction open?
Has it been expanded since? If so, how and when?
Is the farm attraction a separate trading company? If so, name: YES / NO
Are the buildings or land rented? If so, details:
Is the farm attraction a registered charity? If so, does registration apply to the whole? YES / NO

Other Units of Occupation

Are there other units of accommodation? e.g. self catering, other separate let accommodation
Are there domestic units within the hereditament? If so, addresses:

The Nature of the Attraction

What is the purpose? eg fully commercial attraction, animal sanctuary, farm shop only, etc.
Brochure obtained: YES / NO
Opening times during the year:
Admission prices:
Visitor numbers (per annum): Is more than 1 year available? If this includes school parties at reduced rates, how much does this represent?
What is the Gross Turnover (net of VAT)? (for the last year preferably) Who should be contacted if we need to see accounts?

Location and Layout

Where is the attraction?
Give details on accessibility, distance from nearest main towns/catchment and prominence:

Details of Components (parts to be surveyed and photographed)

Restaurant / Café
Other non-agricultural land and buildings e.g. play centres, exhibition/events/class buildings, outdoor facilities: * * * *
Agricultural land and buildings (eg paddocks/stables/compounds etc) (no need to measure but need to be plotted on plans) * * * *

Appendix 2 : Application of LGFA 1988 Schedule 5 Para 2 : Considerations to be taken into account regarding agricultural land exemption

1 A hereditament is exempt to the extent that it consists of any of the following -

(a) agricultural land;

(b) agricultural buildings.

In relation to bare land the provisions set out in paragraph 2(1)(a) and paragraph 2(2)(d) will need to be considered, namely:

2 (1) Agricultural land is -

(a) land used as arable, meadow or pasture ground only


2 (2) But agricultural land does not include -

(d) land used mainly or exclusively for purposes of sport or recreation,

Once the facts have been ascertained, the exemption legislation can be examined to establish the extent of any non-exempt use.

Prior to the amended wording under LGFA 1988 (introducing “to the extent that”) the courts had generally held it difficult to adopt a strict interpretation of the use of the word “only” in similar provisions under section 26 of the General Rate Act 1967. Too strict an interpretation on this point made it difficult to give any meaning to the separate exclusion of “land kept or preserved mainly or exclusively for purposes of sport or recreation.”

Having said that, in the case of Moore-v- Williamson(VO) [1973] RA 173,180 (third paragraph) Mr Emlyn Jones stated:-

“A strict limit is set by the opening words of the subsection:- “Land used as arable, meadow or pasture ground only”, and following a long line of cases I think it is clearly established that any use of arable, meadow or pasture ground other than the growing of crops or grazing of animals must be minimal in extent in order to avoid losing the exemption. In my opinion the second half of the subs (3)(a) ie “but does not include” are not to be interpreted as extending exemption for agricultural land but rather of restricting it further: and land which is kept or preserved less than mainly for the purposes of sport and recreation still fails to qualify as agricultural land unless it is used for arable, meadow or pasture ground only (subject to the doctrine of de minimis non curat lex).”

In any event greater clarity is provided by the introduction of the words “to the extent that” and this is affirmed in the Opinion that the Valuation Office obtained from Counsel in respect of the Great Dorset Steam Fair (see paragraph 2.2.4 in the main section).

The keys points to draw from all of this are as follows:

  • the “to the extent that” test should be approached on a spatio temporal basis.

  • If the non-exempt use is the paramount, predominant or primary use there can be no question about rateability.

As regards the latter, if, for example the festival, game fair or steam fair is a major attraction this must be the predominant and primary use of the land because any agricultural activity would pale into insignificance as far as use, income and intensity are concerned. Clearly, the more major the event the greater the prospect that the land fails the “only” test.

Practice Note 1 : 2005 : Farm Diversification

Financial information: The following facts were gleaned from the network in March 2006.

In March 2006 the following information is available:-

a. Average entry fees were £3.50 to £8.

b. Many attractions reported a 5-10% increase in visitor numbers in each of the last two years.(2004/2005).

c. An initial investment of £100,000 to start up on a building by building basis is required, but 5-10 times that amount is required to have a range of attractions ready for a “big bang” opening.

d. The industry norm for profit margins is stated as 8-10%, but this is an average and there will be many successful attractions that achieve considerably higher figures – a view of the full accounts can assist here.

e. Annual Premiums for Public Liability and Occupiers Insurance can cost from £5,000 to £10,000, depending upon the size of the operation, the number of visitors and the proportion of children.

f. Staff costs can be as much as 30-40% of turnover.

g. Grants are available from DEFRA’s Rural Enterprise / Development Programme.

h. Most Farm Leisure Attractions fail because they are seasonal businesses and cash flow over the winter months requires careful management .