Fridays Limted v Dawn Bunyan (Valuation Officer)

For exemption under paragraph 3(a) of Schedule 5 to the Local Government Finance Act 1988, a building must be occupied together with agricultural land and used solely in connection with agricultural operations on that or other agricultural land. Following the 2003 amendment, “or” is exclusive. Occupation and use therefore need not relate to the same land, and occupation no longer requires a functional connection with the land. The building and land must nevertheless be occupied as part of the same enterprise and be geographically close, if not contiguous. The court distinguished Farmer v Buxted Poultry Ltd on paragraph 3, while retaining its authority for paragraph 5. Essential weighing, grading and packaging of eggs may be agricultural operations where those processes are necessary before the eggs can be sold.

Fridays Limited appealed against the Valuation Tribunal for England’s decision of 24 July 2023, which dismissed its challenge to the rating of three buildings at Chequer Tree Farm: an Egg Packing Centre, Egg Packaging Store and Egg Warehouse.

The buildings were used to weigh, grade and package eggs produced at Fridays’ nearby farms and to process eggs supplied by independent farms. Fridays argued that the buildings were agricultural buildings under paragraph 3(a) of Schedule 5 to the Local Government Finance Act 1988. The central issues were whether they were occupied together with agricultural land and whether they were used solely in connection with agricultural operations on that or other agricultural land.

1. Appeal allowed. The three buildings qualified for agricultural exemption. The agreed rating assessment was £136,000.
2. The 2003 amendment changed the statutory relationship between occupation and use. The word “or” in “that or other agricultural land” was used exclusively. The provision therefore covers a building occupied together with agricultural land but used solely in connection with operations on other agricultural land.
3. As a result, occupation under paragraph 3(a) no longer requires a functional connection between the building and the land with which it is occupied. “Together” still requires occupation as part of the same enterprise and geographical closeness, if not contiguity. The three buildings and the arable land at Chequer Tree Farm satisfied those requirements: they were in the same occupation at the same time, contiguous and part of the same business enterprise.
4. The Tribunal distinguished Farmer v Buxted Poultry Ltd [1993] AC 369 for paragraph 3, while confirming that it remained authoritative for paragraph 5 of Schedule 5. The Upper Tribunal acknowledged that its contrary statement in Senova Ltd v Sykes (VO) [2019] UKUT 0275 (LC) had been obiter and was wrong, although that did not affect the result in Senova.
5. Alternatively, if the Buxted approach applied, the buildings were not worked as a single agricultural unit with the arable land because their operations and management were functionally independent. They were, however, sufficiently functionally close to the Fridays Farms to constitute a single agricultural unit with them. The farms and the buildings were mutually necessary to produce eggs for sale.
6. The second requirement was also met. Weighing, grading and packaging were essential before the eggs could be sold under the regulatory framework and industry practice. Those processes therefore had a close functional connection with agricultural operations on the Fridays Farms.

• Upper Tribunal (Lands Chamber): appeal from the Valuation Tribunal for England allowed. The decision under appeal, dated 24 July 2023, was disagreed with and the correct rating assessment was determined to be £136,000.