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

Section 795: point-to-point race courses

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

1. Scope

This instruction applies to all Point to Point courses.

2. List Description and Special Category Code

Primary Description Code: LX

List Description: Point to Point Racecourse and Premises. The valuer will need to consider whether the term Part Exempt needs adding to the description.

Scat Code 214, Suffix G

3. Responsible Teams

Currently Class Co-ordination Team (CCT) members are responsible for valuation with a member from each Business Unit.

Any queries of a complex nature arising from a particular case should be raised through the CCT to be referred to the NSU Leisure Classes facilitator.

4. Co-ordination

The Class Co-ordination Team has overall responsibility for the co-ordination of this class. 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

5.1.1 At the heart of the matter are the tensions between:

  • Schedule 5 to the Local Government Finance Act 1988 (LGFA 1988) - the agricultural exemption provisions
  • the identification of the appropriate hereditament(s)
  • the application of the de minimis non curat lex maxim (the law does not concern itself with trifles)

Taking these in turn.

5.1.2 Schedule 5 to LGFA 1988

Under paragraph 1 of Schedule 5 LGFA 1988,

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

and

2 (2) But agricultural land does not include -

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

(e) land used as a racecourse.

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

Exemption will fail if the land is used as a racecourse. There is no “mainly or exclusively” test as is the case with para 2(2)(d) land used for sport and recreation. This suggests a prima facie case for rateability. Even greater clarity has been provided by the introduction of the words “to the extent that” within the LGFA 1998 provisions.

The keys points to draw from 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 event 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 as it will evidently not be capable of being considered de minimis.

5.1.3 The identification of the appropriate hereditament(s)

Point to Point meetings are held at a number of locations ranging from agricultural pasture land in open fields, country estate land and dedicated race-courses. Where rateability is proven it is important to correctly identify the rateable occupier. Following the advice received in relation to the great Dorset Steam Fair it may be the landowner who is in rateable occupation and not the local hunt holding the event. Their occupation deemed to be too transient.

5.1.4 The application of de minimis

When considering de minimis in this context, it would not be unreasonable to bear in mind the following:

  • The presence of permanent factors, e.g. fences, grandstands, rails etc
  • The organisation and preparation for the event
  • The importance of the event locally
  • The number of spectators attending and the financial return to the organisers

Taking these in turn.

5.1.5(a) The presence of permanent factors

This will only be established from inspection.

Strictly, the continuing presence of point to point fences should result in an entry into the Rating List of a “partially exempt hereditament” under para 2(1B) of Schedule 6 LGFA 1988, even though the value of the rateable element may be relatively minor.

5.1.5(b) The organisation and preparation for the event

This will be hard to gauge from an outsiders perspective. However most point to point are organised by hunts, with the point to point being a sub-committee of the main hunt committee. Time will be given free by those committee members with the aim of raising funds for the hunt. It is not uncommon to have a working committee of 12 to organise the point to point meeting during the year, then calling on between 50-75 additional helpers on the day of the meeting to assist with car parking, stewarding, fence judges, hospitality, health and safety, litter picking, selling race-cards, treading-in etc.

5.1.5(c) The importance of the event

Most point to points hold a special place in the rural landscape, though nevertheless are extremely sensitive to the weather.

5.1.5(d) Number of spectators attending and financial return to the organisers

Most point to point meeting barely break even and when a “profit” is made almost certainly it will go towards setting off previous losses or become the “float” for next season. However there are point to points that are extremely successful, often those held later on in the year - March to May and benefitting from an Easter or May bank holiday. It is also necessary to remember the numbers of volunteers that are deployed to ensure that an event runs smoothly.

5.2 Overview

Some point to point courses in England and Wales will not be rateable after considering the above factors.

However if the meeting is substantial in scale and held on land that is outside the agricultural exemption provisions it should be assessed. It should be noted that some courses also hold more than one meeting such as Garthorpe, Leicestershire which is the home of a number of meetings during the point to point calendar year.

6. Survey Requirements

It will assist greatly if a race-card for the event(s) can be obtained. Almost certainly, this will provide much of what will need to be recorded. It will contain a plan, showing all the salient details of the site, the location of all the key facilities and the position of each fence. It is important to establish those fences and facilities that remain in-situ.

Rental evidence may exist, as it is not uncommon for a local hunt to enter into an agreement with the landowner to pay a rent or licence fee. However in the absence of this and also as a cross check full accounts will need to be obtained for a three year period prior to the antecedent valuation date.

The survey should include the following information:

Location showing access to event, site plan, facilities available, frequency of meetings, entry fees for public, duration of event from setting up to leaving site, identification of fences and facilities that may remain in-situ all year round.

7. Survey Capture

In all cases plans and surveys should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

8. Valuation Approach

In the absence of rare reliable rental evidence the receipts and expenditure method of valuation should be adopted.

When considering the accounts for a point to point great care should be taken to ensure that the receipts being considered only relate to the specific undertaking being considered.

It is vital to ensure that the accounts reflect the reality of the operations. Most meetings rely hugely on volunteer labour and the treatment of this resource needs to be correctly reflected in the analysis of the accounts. Some guidance may be derived from the LT decision in Bluebell Railway Ltd v Ball (VO) [1984] RA 113.

9.Valuation Support

All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant scat code.

Additional support is available through:

  • Survaid.
  • Class Co-ordination Team.

Practice note 1: 2017 - Point-to-point race meetings

1. Market Appraisal

This sport remains as popular as ever from the spectators’ perspective, and point-to-point racing remains an attraction in rural communities that provides recreation and enjoyment to a wide range of people.

The 2014/15 Point-to-Point season (November to May) had 190 Point-to-Point fixtures, staged on 116 courses, and major national sponsorship of leading jockey series competitions continued to feature strongly. The sport is governed and regulated by the British Horseracing Authority.

The uncertainties presented by the Hunting Act 2004 have been resolved and the numbers of horses entered for race meetings remains as buoyant as ever.

However, the “professionalism” needed to run a day’s racing continues to increase and is still evidenced by ever more stringent health and safety requirements. These incur ever-greater costs to organisers and thereby increasing pressure to share an established course, or, in the case of traditional, once a year, single meetings, reducing net income. This is evidenced by the reduction in Point to Point fixtures from 2007/08 when 213 fixtures were held. A loss of 23 fixtures since the previous antecedent valuation date.

2. Changes from the last Practice Note

There are no changes from the broad principles followed for the 2010 Rating Lists and the approach therefore remains the same.

3. Ratepayer Discussions

None at present

4. Valuation Scheme

As a matter of pragmatism, if full accounts are not available, the valuer may need to resort to adopting a percentage of gross receipts.

The warnings in the main Rating Manual Section about income variability still apply, and events are still very much subject to the weather. It is no surprise that those fixtures held in April and May (especially bank holiday fixtures) tend to attract the larger crowds. Accordingly, only a modest percentage should be applied when arriving at the RV by adopting a percentage of the gross receipts, the majority of courses being valued in the 4% - 7% range, which should be verified by local rental evidence where possible.

See the valuation guidance within RM : S6 : Part 3 : S1085 : Leisure Attractions: Practice Note 1 : 2017

It should also be remembered that an unrealistically high rating assessment could easily turn a small profit on a point-to-point meeting into a substantial loss. Therefore there is a real need for valuers to adopt a “stand back and look” approach before making a final decision on valuation issues.

Practice note 1: 2010 - Point-to-point race meetings

1. Co-ordination Arrangements

Point-to-Point racecourses are a Group co-ordination class and as such responsibility for ensuring that the appropriate co-ordination takes place lies with individual Groups. As there is known to be only limited rental evidence for this class, it is important that Groups co-ordinate across boundaries, using fully the procedures set out in Rating Manual: Section 6: Part 1.

The R2010 Special category Code 214 should be used. As a Group Class the appropriate suffix letter should be G.

2. State of the Sport (These notes were written in July 2008)

This sport remains as popular as ever from the spectators’ perspective, and point-to-point racing remains an attraction in rural communities that provides recreation and enjoyment to a wide range of local people.

The 2007/2008 Point-to-Point season had 213 Point-to-Point fixtures, staged on 117 courses, and major national sponsorship of leading jockey series competitions continued to feature strongly.

The uncertainties presented by the Hunting Act 2004 have been resolved and the numbers of horses entered for race meetings remains as buoyant as ever.

However, the “professionalism” needed to run a day’s racing continues to increase and is still evidenced by ever more stringent safety requirements. These incur ever-greater costs to organisers and thereby increasing pressure to share an established course, or, in the case of traditional, once a year, single meetings, reducing net income.

The warnings in Rating Manual Section 6 part 3 Section 795, about income variability still apply, and events are still very much subject to the weather. Accordingly, only a modest percentage should be applied when arriving at the RV by adopting a percentage of the gross receipts, the majority of courses being valued in the 4% - 7% range, which should be verified by local rental evidence.

It should also be remembered that an unnecessarily high rating assessment could easily turn a small profit on a point-to-point meeting into a substantial loss. Therefore there is a real need for VOA caseworkers to adopt a realistic “stand back and look” approach before making a final decision on valuation issues.

3. Valuation Guidance

Valuation guidance on this class is outlined in Rating Manual Section 6 part 3 Section 795

4. 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 this type of leisure attraction. All valuations should be entered onto the NBS under the relevant Scat Code.

Practice note 1: 2005 - Point-to-point race meetings

1. Co-ordination Arrangements

This is a Group Class. Co-ordination responsibilities are set out in [Rating Manual: Section 6: Part 1[(https://www.gov.uk/guidance/rating-manual-section-6-chhallenges-to-the-rating-list/part-1-co-ordination)

The R2005 Special category Code 214 should be used. As a Group Class the appropriate suffix letter should be G.

2. State of the Sport (These notes were written in September 2003.)

This sport remains as popular as ever from the spectators’ perspective, and point-to-point racing remains an attraction in rural communities that provides recreation and enjoyment to a wide range of local people.

Many new uncertainties have been raised by the general effects of the continuing hunting controversy. In particular, the government Hunting Bill currently going through Parliament has caused much disquiet, as only horses that have been properly hunted can compete in point-to-point races. Additionally, there has also been a dramatic rise in third party insurance cover for equestrian activities during 2002/03.

The “professionalism” needed to run a day’s racing continues to increase and is still evidenced by ever more stringent safety requirements. These incur greater costs to organisers and thereby increasing pressure to share an established course, or, in the case of traditional, once a year, single meetings, reducing net income.

The warnings in Rating Manual Section 6 part 3 Section 795, 5.3 about income variability still apply, and events are still very much subject to the weather. Accordingly, when arriving at the RV by adopting a percentage of the gross receipts a relatively modest percentage should be used to reflect the low profitability and the volatile nature of the gross receipts which may fluctuate widely from year to year. The majority of courses should be valued in the 4% - 7% range which should be verified by local rental evidence.

It should also be remembered that an unnecessarily high rating assessment could easily turn a small profit on a point-to-point meeting into a substantial loss. There is therefore a real need for VOA caseworkers to adopt a realistic “stand back and look” approach before making a final decision on valuation issues.

3. Valuation Guidance