[2024] UKUT 304 (LC)

This is a 2017 rating list appeal from a decision of the Valuation Tribunal for England (VTE) that equestrian facilities at Holdenby North Lodge, Teeton, Northampton NN6 8LG (the Farm) comprise two hereditaments for the purposes of non-domestic rating. The appellant Valuation Officer (VO) says that the Farm is a single hereditament. The part of the Farm that does not benefit from an agricultural exemption to non-domestic rates was originally assessed as a Racing Yard and Premises at rateable value £30,750 but was reduced by the VO on 4 April 2018 to rateable value £24,500. Both assessments were effective from 1 April 2017 (the material day).

The Farm accommodates horses used for racing and is licenced for that purpose by the British Horseracing Authority (BHA); it also accommodates horses used for point-to-point events, for which no licence is required. On 1 December 2020 the respondent, Mrs Caroline Bailey, served a proposal on the VO seeking a reduction in assessment to rateable value £11,000. The proposal was made by Mr Christopher Marriott FRICS, acting as Mrs Bailey’s agent, on the grounds that ‘The rateable value shown in the rating list on 1 April 2017 was wrong’. As justification for the proposed alteration Mr Marriott relied on a decision of this Tribunal relating to Sandhill Stables near Minehead in Somerset which was published on 28 February 2017. The reason why it was said to be relevant was that it ‘set the tone for all weather gallops as a proportion of the box value’. In section K of the form (explain why the rating list should be altered) Mr Marriott requested a division of the assessment between the two yards and provided a detailed justification. Notwithstanding his earlier reference to rateable value £11,000, Mr Marriott provided two valuations for the individual properties, one for the licenced yard at rateable value £11,000 and a ‘possible’ value of rateable value £6,750 for the point-to-point yard.

On 1 February 2022 the VO issued a decision notice stating her view that the property was correctly assessed as a single hereditament, but the assessment was further reduced to rateable value £19,000. The grounds of appeal to the VTE were not in the evidence before this Tribunal but the VTE identified the issue to be decided as whether the ‘property should be split into two separate assessments’, namely one relating to the licenced racing yard and the other to the point-to-point yard. The appellant in the current hearing did not raise the scope of the proposal as an issue and it appears that no separate proposal was submitted in relation to the point-to-point yard.

In her appeal to the VTE the respondent proposed a rateable value of £12,000 for the racing yard but did not specify the assessment for the point-to-point yard. The decision of the VTE was that the property was two hereditaments, and it determined the assessment of the licenced yard at rateable value £12,000. The question of the value of the point-to-point yard was not addressed. The operation of both yards ceased in 2022 and minimal use of the accommodation is currently being made.

A consequence of securing a division in assessment to a level of rateable value of £12,000 or less is that the licenced racing yard would fall within the scope of the current regime of small business rate relief as defined by the Non-Domestic Rating (Reliefs, Thresholds and Amendment) (England) Order 2017. The result in this case would be that the ratepayer would benefit from a 100% mitigation of their rates bill.

At the hearing the appellant was represented by Mr Edward Waldegrave of counsel and the respondent by Mr Marriott. I am grateful to them both. I inspected the Property on 12 July 2024 accompanied by Mrs Bailey, Mr Waldegrave and Mr Marriott. Mrs Heather King and Mr Tim Barraclough of the Valuation Office Agency were also present. Mrs Bailey and Mr Barraclough appeared as witnesses of fact at the hearing.

This is the latest in a series of appeals concerning proposals to divide existing hereditaments into two or more, the most recent of which are Zhylzhaxynova v Jo Moore (VO) [2024] UKUT 204 (LC) which concerned a proposal to divide the assessment of an industrial unit and Prosser KC v Ricketts (VO) [2024] UKUT 264 (LC) which dealt with barristers’ chambers. I will begin by describing the Farm and the yards it contains. The arguments in the appeal will follow together with my findings of fact, and I will then examine the relevant law and come to my conclusion.