The rating assessments of three buildings were in issue. All the buildings were situated at Chequer Tree farm. The buildings were known as the Egg Packing Centre, the Egg Packaging Store, and the Egg Warehouse. The producer, the ratepayer, operated its egg production business from over 400 acres comprising a collection of sites in a ten-mile radius known as “the Fridays Farms”. These included arable land used to grow grain which was fed to the free-range chickens and also the three buildings themselves.
The exemption from business rates of agricultural land and buildings has evolved over time. The current legislation originated in 1928. Although the detail has changed, the law since 1928 has been that, in order for a building to fall within the definition of an agricultural building, two requirements have to be satisfied: i) the building has to be occupied together with agricultural land (“the occupation test”); and (ii) the building has to be used solely in connection with agricultural operations “thereon” (i.e. on the land together with which it was occupied) (“the use test”). In 2003 the user test was amended to require that the building be used solely in connection with agricultural operations on that land or any other land (emphasis added). As you can read, the user test was amended materially by allowing for operations on other land.
The meaning of the occupation test has been litigated in the past. The courts have said that it is necessary to show that the buildings, or the buildings and agricultural land, are occupied together to form, in a real sense, a single agricultural unit. The distance (or better, the proximity) between the various components may go far to show that they are (or are not) a single unit. Thus, farm buildings surrounded by land, which is farmed with other land nearby, though not contiguous, or even land in another neighbouring village, may be found to be “occupied together with” each other.
The concept underlying these two tests was that, to qualify for the exemption from rates, the building had to be ancillary to the agricultural operations on the agricultural land with which it was occupied.
In a recent case, the Court of Appeal has held that the amendment made in 2003 altered the use test, but it did not alter the occupation test. The occupation test was well-established in the case law as it stood in 2003. Since Parliament did not see fit to alter the occupation test, it continues to apply in the way that the courts had interpreted it.
The correct legal question is whether the three buildings and the Fridays Farms were occupied together so as to form a single agricultural unit.
The buildings were under common ownership and occupation. The Upper Tribunal had earlier found that the other Fridays Farms were managed from Chequer Tree Farm, where the important decisions were taken. Thus, they were in the same occupation and jointly controlled or managed at the same time. Distance or proximity are relevant considerations. Although they were not contiguous, they were all near each other. On the facts of this case, the buildings were close enough to be a single unit.
It followed that the three buildings were exempt from business rates.
There will be agricultural operations where the presence of buildings or the details of the use of the agricultural land will be driven by considerations of husbandry and what facilities are needed to deliver a profitable product to the market. However, there may be cases in which the farmer or producer has some ability to arrange its land use such as to maximise the available exemptions.
The details are vital. As this case shows, it is only by a detailed analysis of the facts and the business processes involved that the ratepayer was able to secure the material reduction in its rates assessment to which it was entitled. There was no suggestion of agricultural use here being used as a mitigation tool.
Possibly, this case shows that you cannot make an exemptions omelette without breaking some case law eggs.
See Bunyan (VO) v Fridays Limited 2025 EWCA Civ 666
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