Business Rates for Farmers (May 2015)

Not as odd as it first may seem if the structure of your business extends beyond agriculture or the ownership splits out various different enterprises.  Farm buildings and agricultural land are exempt from business rates.  But, and it’s a big but, the buildings must be used for farming and agricultural purposes and are occupied together with agricultural land.

It is not uncommon for buildings on farms to be let out to third parties for small lightweight and cottage industry activities.  If you have such buildings make sure that there is a tenancy agreement in place that makes the tenant responsible for paying any business rates that may become chargeable.

If you farm under a partnership and the partners have other businesses that operate from the farm this may also leave the door open for a rate charge on areas of the farm that the local authorities can successfully argue are for non-agricultural use.  Obvious examples would be a farm shop, furnished cottage for holiday let, caravan storage, camping field etc.

A grant of planning permission for change of use is not often followed up by a swift demand for rates.  However, just because the local authority has not caught up with you it does not mean that they won’t and indeed they can go back six years.

It is not all doom and gloom though.  Certain rural businesses can get help with rates at the discretion of the local authority.  Units let out should be rated separately so each tenant can apply for help.  The small business rate relief for 2015/16 is 50% reduction where the rateable value is below £6,000 and for rateable values between £6,000 and £12,000 the reduction decreases on a sliding scale of 1% for every £120.  There is also an exemption for empty properties for up to three months.