Last updated 29 January 2022
Over recent years, the ABRS+ have lobbied on behalf of their members, and the riding school and livery yard industry as a whole, to understand and reduce the huge business rates applied to these business premises. The ABRS+ are longstanding members of the Sport and Recreation Alliance (SRA). The Alliance works hard to influence the Government and other key decision-makers to make improvements in a host of different areas that will enable the sport and recreation sector to function more effectively. A large part of this is the SRA being made aware and helping to deal with issues faced by various industries. One of the main issues facing riding schools, and many other businesses, at the moment are Business Rates.
What are Business rates?
All property that is not domestic is potentially liable for business rates (non-domestic rates) although there are some exemptions. There are various applicable rates depending on the use of the land, and the type of facilities. In establishing the area liable to business rates of equestrian property, it is necessary to establish the purpose for which the land is occupied. Grazing land occupied by horses will be exempt from rating, but the stables, arenas, feed and storage areas have no exemptions. The valuers normally work off standard annual rateable values for the various equine facilities. For example, there will be a fixed rate for some amenities, such as stables, whereas other facilities such as tack rooms, feed rooms and riding arenas are calculated on a per square metre rate.
The rateable value is the sum of all of the parts; the amount payable normally works out at around 50% of the rateable value. Historically the valuation date (termed the antecedent valuation date or AVD for short) has been set 2 years prior to the new values coming into effect. So for example in 2017 the Rateable Values were based on rental levels in 2015. If the rateable value falls below £12,000 per annum, no rates will be payable due to the effects of the Small Business Rates Relief Scheme (SBRR), and there are other exemptions such as for breeding or activities deemed as agricultural. However, various rules apply and the business rating of an equestrian property can be a ‘grey area’ because it is often so closely associated with agricultural or domestic uses of land and buildings, and sometimes even private stable yards can be liable for rates. In 2017, there was a Business Rates Revaluation which recalculated the rates for a majority of premises, seeing huge hikes and disproportionately in many cases. If you find yourself in the position of having a potential business rate liability, you may be able to claim SBRR.
Non-Domestic Business Rates are based on the potential rental value of a property. There is precious little data available for Equestrian Establishment – many are family owned or an extension of another business (such as a farm) and, in any case, no two equestrian properties are similar. To get round this, guidance has been produced for use by Ratings Officers (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-1006-stables-and-loose-boxes). This guidance however is not underpinned by solid rental information. The last Revaluation (2015) saw a huge jump in Rateable Values (for example, doubling of the potential rental value of a stable) and there is some concern that 2023 Revaluation may see yet another major increase.
That said, many equestrian businesses are subject to the Small Business Rates Relief and there is some anecdotal evidence (Gill Tucknell – Senior Valuer Equestrian) that >25% of equestrian business pay rates. Where an equestrian business does pay rates, there are legitimate methods to reduce the rateable value or to claim rates relief; a professional buildings valuer, such as Ian Currall, is normally needed to wade through the morass of rules and regulations
You should check the details of new rateable values carefully. If you think that your bill has been incorrectly calculated or assessed, contact your billing authority or Valuation Office, as appropriate. If this is unresolved you may need to appeal to the Valuation Tribunal. The best way to understand the value of your property is to speak to your local Valuation Officer or Valuation Office Agency (VOA).
You can find details of Business Rates here on the Gov UK website
What has happened so far?
Following the rate revaluations in 2017, equestrian organisations and British Equestrian member bodies – including the ABRS – started lobbying for a change in the business rates process for equestrian business premises. In some instances, the rateable value of these properties was revaluated and increased by over 300%. This has led to lots of publicity in the equestrian press in relation to the difficulties faced by these rate hikes, and the potential devastation to businesses within the industry with unavoidable closures due to the rates making running of the schools and yards unviable.
In 2019, Chair Jane Williams contacted our local MP Jeremy Quinn to alert him to the issue. This resulted in his visit to the ABRS+ office, and a plan to find information to build a case to review the BRR methodology and quantum. Jeremy Quinn was contacted again as we went into lockdown as to how Members were to survive the pandemic. His action resulted in equestrian establishments being given the full suite of relief. The UK Minister of Tax wrote to Jeremy Quinn and also thanked the ABRS+ for bringing the matter to his attention. In December 2020, the ABRS+ also lobbied for the right to trade, with our members facing closures due to the pandemic, which led to the TV and local radio appearances, including again highlighting the issue of business rates. The Covid-19 pandemic has seen many equestrian businesses close their doors due to lack of viability with closures and increased costs and this has further spurred on the need for action to review these rates as a whole.
In July 2020 the Government announced the extension of the current Rating List to 2023.
What happens next?
The COVID-19 pandemic has simultaneously reinforced the importance of sport, recreation and physical activity to the lives of individuals and communities but also highlighted how easy it can be taken away so it’s important to take swift action to continue to raise these issues.
The ABRS+ have been spreading the word to help raise the issue of business rates for equestrian premises. In October 2021, the Financial Times raised the issue with an article highlighting the heavy costs, and that there is an urgent need for reform on the structure of these rates which are quoted as being “outdated and outmoded”, and more than 40 trade sectors have joined a campaign to urge action for these changes. The groups have urged the chancellor to bring rates in line with property values, for the next budget and ensure there are no further increases in rates.
Equestrian businesses are urged to grasp the opportunity to act on business rates, as the government has pledged to review the system, and one way to do this and raise awareness is to write to their local MP urging for them to raise the issue in parliament. When ABRS+ Chair Jane Wiliams recently attended the SRA AGM, she had the opportunity to speak to the HRH Earl of Wessex, President of the SRA, and brief him on the issues faced by centre owners. As well as that, in the middle of October Jane received the excellent news that she has received confirmation from our local MP, Jeremy Quinn, confirming that he will write to the minister to ask whether riding schools are going to be included in the business rates review. He has promised to update her as soon as possible.
Following the Autumn Budget Announcement on 28th October 2021, many of our members have been considering if they are eligible for the rates cuts announced on the basis of their centres being included within the ‘leisure’ sector. It could be assumed that those who were eligible for rate relief in 2021/22 may be eligible for an exemption for the coming year too. We are currently pushing for clarification on this and requesting for it to be included, but it’s possible that an outcome will not be known until the 2022/23 Rates Statements are issued at the beginning of this year.
The next Revaluation will take place on 1st April 2023. The Valuation Office Agency is contacting businesses to request rental information to support the next revaluation of business rates in England – Revaluation 2023.
There is a lack of data on the number and % of equestrian businesses that pay non-domestic business rates. There is also a lack of data on rental values. In the coming months, the ABRS+ will be carrying out surveys of members and non-members to increase data on how Business Rates affect riding establishments, and to see how we can best approach Revaluation 2023 in regards to supporting riding establishments, especially those who are being charged seemingly disproportionate rates.
To continue the lobbying, riding school and livery yard owners are urged to contact their local MP to raise the issue and support local business in their area. You can find your local MP here
You can download a Template Letter to send to your local MP here (feel free to amend as seen fit for your circumstances). Please do keep us updated if you have sent a letter to your MP, and even better please let us know if you receive a response.
