She writes:
Until now, nursery growers growing wholly or mainly under cover have been under threat of having to pay business rates following a court of appeal case in 2015 which held they did not qualify for the agricultural exemption. From 2013, the NFU has been working hard with members and on their behalf to lobby government to have this amended.
On 30 March Marcus Jones, the minister responsible for business rates in Department of Communities and Local Government (DCLG,) made a statement to say that in light of the importance of the agricultural exemption and the impact on the cost of farming, plant nurseries should benefit from the exemption and that government intends to amend the relevant legislation “at the soonest opportunity”.
He went on to say: “I can confirm to the House that the Government’s policy is that land and buildings at plant nursery grounds should benefit from the agricultural exemption for business rates.”
This statement was made following a meeting held between the NFU and the minister. Leading up to this, the NFU brought the issue to the attention of Defra and worked alongside the government department. We had a high level of engagement with MPs to gain support and momentum for what we considered to be rectifying what Parliament originally intended when the legislation was drafted and what had always been done in practice until the adverse Court of Appeal case in 2015.
"A wonderful result that cements the future for UK food production..."
"A weight off our shoulders which means we can now plan for the future..."
Throughout the process the NFU has given a high level of support to members affected and who stood to suffer significant harm to their businesses. The NFU member whose case went to the Court of Appeal said the news last week was “a wonderful result that cements the future for UK food production”.
Another member, John Overvoorde at Delfland Nursery - whose nursery was visited by NFU President Meurig Raymond - described the decision as “a weight off our shoulders which means we can now plan for the future”.
The agricultural exemption to business rates has been in place and in practice since 1928 and in most cases requires agricultural buildings to be occupied together with agricultural land. At this time it was recognised that in many instances, market gardens supplying produce directly to shops grew entirely under cover without the use of open land.
Therefore the legislation made provision for market gardens to continue to operate in this way and still be exempt. It was not, however envisaged at the time that nurseries producing young plants to be grown on elsewhere would also adopt this method of growing in the future. This then created an anomaly since it was not Parliament’s intention to rate agricultural operations yet nurseries were beginning to be rated.
The NFU strongly believed that there was never an intention to rate plant nurseries in this way and this was confirmed prior to 2015 by the fact that in practice they were not rated. It was purely the interpretation of the law by the Court of Appeal that led to a change in approach.
The NFU team who led the work would like to thank their members for their valuable assistance as well as the MPs who pledged their support and the other grower organisations such as the Horticultural Trade Association and British Growers Association. All this has been crucial in determining this great result for British horticulture at a time when it is most required.
- The Ministerial Written Statement can be viewed here.