There are numerous exemptions and reliefs from business rates and the law in respect of these is complex and sometimes conflicting, because those exemptions have developed piecemeal over many years. One example of this is the exemption from rates applying to plant nurseries.

Since the 1920’s “agricultural land” and “agricultural buildings” have been exempt from business rates. There are similar, but not identical exemptions, for “market gardens” and for “nursery grounds”. These latter two exemptions can include buildings but, in the case of nursery grounds, for a building to be exempt it had to be occupied with agricultural land and used in connection with agricultural operations on that land. This meant that plant nursery buildings that were remote from any agricultural land were not exempt, a position that was confirmed as correct in a case known as Tunnel Tech Ltd v Reeves (VO) [2015] EWCA Civ 718. In that case a building used for growing mushroom spores was not connected with any agricultural land and the Court of Appeal found that it could not, therefore, benefit from the exemption.

Following that decision, the Government announced that its intention was to ensure that, for the purpose of the agricultural exemption, market gardens and plant nursery grounds are treated equally. This Act amends Schedule 5 to the Local Government Finance Act 1988 to provide for an exemption for buildings which are, or form part of, plant nursery grounds if they are used solely in connection with agricultural operations at the nursery ground.

The exemption applies from 1 April 2015 but, since the Tunnel Tech decision, the Valuation Office Agency has assessed some plant nursery buildings in England. The Act will also allow ratepayers that have been affected to make proposals to have those assessments deleted as the properties are now exempt. The regulations to allow this to be done will be laid before Parliament shortly.

The need for this, rather obscure, piece of legislation comes from the fact that the law on business rates reliefs and exemptions is a mess. Many professionals have called for a full review of reliefs and exemptions. They are very significant because the level of business rates taxation in the UK is so high. That level should be reduced, and the whole issue of exemptions and reliefs reviewed properly. But the Government will not do either of these things and continues to try to tinker with pieces of legislation such as this one.