Section 690: motor racetracks and go kart rinks
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
This guidance applies to all Motor Racetracks, Go Kart Rinks and Speedway Racetracks.
Racetracks and rinks within this grouping take on a wide variety of different forms both in their physical make up and in their use. There are tracks that are purpose built to international standards and others of a far less sophisticated nature created perhaps from disused airfields. Top-end tracks are used for Grand Prix and Formula One racing and others are used solely for small Club events. There is a world of difference between the major tracks handled by the National Specialists Unit and the remainder dealt with in Business Units.
Karting is split into four main categories: Cadet, Junior, Senior and Gearbox and is readily accessible through arrive-and-drive facilities, which include indoor rinks.
In Speedway the UK has three main domestic leagues, the Elite League, the Premier League and the National League, as well as two ‘junior’ amateur leagues. It also has a youth championship.
It is important to gain a full understanding of the sort of undertaking under consideration, and have available details as to the type or types of racing and the sorts of ancillary uses permitted, such as vehicle testing and race tuition. Additionally, the number of days on which such uses can be exercised must be established. The permitted number of these days may well have been reduced in recent years.
2. List description and special category code.
Primary Description: LX
List Description: Motor Racetrack and Premises
Scat Code: 191
Scat Suffix: N (NSU) or G (Unit Generalist)
Primary Description: LX
List Description: Go Kart Track and Premises
Scat Code: 116
Scat Suffix: G (Unit Generalist)
Primary Description: LX
List Description: Speedway Racetrack and premises
Scat Code: 254
Scat Suffix: S (Unit Specialist)
3. Responsible teams
These cover a very wide-ranging scale of property and responsibility rests in accord with the scat suffixes detailed above. The national/international standard motor racetracks are dealt with by the National Specialists Unit (NSU).
The Racing Class Co-Ordination Team has overall responsibility for the co-ordination of these classes. The team is responsible for approach, accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers and referencers have a responsibility to:
- follow the advice given at all times
- not depart from the guidance given on appeals or maintenance work without approval from the co-ordination team
- seek advice from the co-ordination team before starting any new work
5. Legal Framework
Motor racetracks come under the jurisdiction of the Royal Automobile Club Motor Sports Association who are responsible for the issue of track licences. The licence granted will dictate the types of meeting which may be held at any individual track.
All Speedway meetings are held under the Speedway Control Board Regulations.
Further restrictions on all tracks (for example on the frequency of meetings or on the use of a track for vehicle testing) may be imposed by the Local Planning Authority. Noise restrictions have become more onerous for many over the last five years.
6. Survey requirements
All buildings should be measured to Gross Internal Area (GIA) in accordance with the VOA Code of Measuring Practice. For the length of the race track linear metres (miles) and width of track should be recorded in addition to the overall site area. In addition the following should be noted:
a. the complexity of signalling and safety facilities/precautions around the track to enable racing to take place; b. the number, size and condition of garaging, workshops and other facilities to enable racing to take place; c. the facilities for spectators including size and location of stands (including capacity), refreshment facilities and any museums; d. the number of race days, practice days open to the public and charges made for entry for the various events, daily attendance numbers; e. details of any use of the track for other purposes such as testing including number of days used and charging. f. where the property is rented details of all tenant’s improvements
7. Survey capture
Surveys and plans should be stored in the property folder of the Electronic Document Records Management (EDRM) system.
8. Valuation approach
Given the wide variety of tracks/rinks and the wide variety of occupiers, these properties do not lend themselves readily to one particular method of valuation. Consideration must be given to all the evidence available, whether it be rental or accounts. The most appropriate approach that best fits the circumstances of a particular case should be adopted.
Whatever approach is adopted individual tracks/rinks should bear comparison one with another.
8.2 Rental approach
Rental evidence is known to be limited but when reliable information is available then this will provide the best evidence of value. Care should be taken when considering rents to ensure that the full extent of any rateable tenant’s improvements is known. It is unlikely that those individual rents which are known will be of any great assistance generally, other than for the circuit in question, and accordingly in the majority of cases recourse to a receipts and expenditure (R&E) or comparative receipts basis will be necessary.
For indoor Go-Kart rinks there will usually be a sufficient body of rental evidence.
8.3 Receipts and Expenditure (R&E) Approach
In the absence of rental evidence and in circumstances where it is possible to discern that profit is the prime motive of occupation then a valuation based upon accounts is likely to be the best starting point. Full copies of audited accounts for at least the three years prior to the date of valuation should be requested, and further reference made to RM: V4: S6.
There are, however, difficulties associated with the interpretation of the accounts in relation to expenditure made to produce potential additional income or even maintaining the current level of receipts. The difficulties are, in the main, the application of valuation techniques and advice will be provided, where necessary, through the CCT.
In certain cases it may be found that a strict R&E approach produces a nil or very low value which patently does not represent the proper letting value of the property. In such circumstances, and for the very reason that the answer produced cannot be right, the strict approach should be rejected in favour of a valuation based upon a percentage of gross receipts.
9. Valuation support
All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant scat code.
Other support available:
- Class Co-ordination Team
Practice note 1: 2017 - Motor racetracks including go kart rinks
1. Market Appraisal
Between 2008 and 2015 the total number of Motor Racetracks/Speedway Racetracks has remained relatively static.
However between 2008 and 2009 there was great uncertainty as to where the British Grand Prix was to be held, if at all. At one point Donnington Park was granted the rights to the British Grand Prix, but they could not deliver the necessary changes, and it returned to Silverstone without a break. Donnington Park went in to Administration and was not physically useable as a track for a period because of the works that had been started and then abandoned.
Whilst Silverstone has a long term agreement to hold the British Grand Prix it has been widely reported that the future of the race is uncertain because of costs. A decision not to hold the race could be made before 1st April 2017.
Indoor go-karting has seen a rise in popularity as a leisure activity in recent years. Some very sophisticated two-tier tracks have been constructed within existing industrial building envelopes. These use electric karts and boast ever longer tracks with the likes of Capital Karts London suggesting they currently provide the longest at 1,050 metres, with average lap times in excess of 78 seconds.
2. Changes from the last practice note
There are no fundamental changes since the last Practice Note..
3. Ratepayer Discussions
There have been no 2017 List discussions.
4. Valuation scheme
Adequate rental evidence is expected to be available in respect of indoor go-karting rinks. Careful attention must be given to ensure that the full extent of any rateable tenant’s improvements is properly reflected and any use restrictions under the lease are correctly interpreted.
Limited rental evidence is available for other types, and, where it is, it equally needs to be scrutinised in detail to establish the precise basis of the payment.
Receipts and Expenditure/Comparative Receipts Basis In the absence of rental evidence the more significant operations are likely to support the application of a full R&E basis. However, at that level, the business structure may be complex and external objectives may drive the motive for occupation to the extent that it is not straightforward to use the accounts data in arriving at the underlying rental value of the property. To the other extreme, small club run sites are likely to encounter ability to pay issues, but this does not necessarily mean that there is a nominal occupational value. Over the years accepted assessment evidence has acted to help develop an expected range of percentages to apply to gross receipts (net of VAT) in order to derive the rateable value.
For 2017 the recommended bid ranges are as follows:
Motor Racetracks of national/international standard ………10% to 12%
Other Motor Racetracks/Go-kart Rinks……..4% to 8%
Speedway Racetracks…….4% to 6%
The relative level of turnover and ease of operation/maintenance will determine where in the range a particular property should sit.
The RPI from April 2008 to April 2015 shows an increase of some 20%, which would imply that a property will need to have increased receipts by a similar percentage to have “stood still” in terms of profitability. For many properties the turnover will need to have increased in excess of this RPI average for profitability (and rental bid) to have remained the same. This needs to be borne in mind when considering the percentage to be applied to gross receipts for 2017.
Practice note 1: 2010 - Motor racetracks including go kart rinks
1. Co-ordination arrangements
Motor Racetracks and Go Kart rinks as classes are split between Groups and Specialist Rating Units, with SRUs dealing with those over £25,000 RV. Responsibility for effective co-ordination lies with SRUs. For more information see Rating Manual Section 6 : Part 1
For Motor Racetracks Special Category Code 191 should be used, for Go Kart rinks Special Category Code 116 should be used. As a split classes the appropriate suffix letter should be either G or S.
2. Valuation guidance
Valuation guidance on this class is outlined in paragraph 5 of this section. Care should be taken in the analysis of any rental evidence that rateable tenant’s improvements are fully reflected
3. IT support
The development a new facility on the Non Bulk Server (NBS) should enable input of factual data to achieve valuations that follow the recommended approach for motor racetracks and go kart rinks. All valuations should be entered onto the NBS under the relevant Scat Code.