Non-Domestic Rating (Nursery Grounds) Bill

Explanatory Notes

Policy background

2 Since at least 1928 there has been a general exemption for agricultural premises in relation to liability to pay non-domestic rates. The Valuation Office Agency ("VOA") is responsible for applying exemptions to hereditaments that qualify for them by not including them on the non-domestic rating list. It has long been the practice of the VOA to treat both buildings that are (or form part of) market gardens and buildings which are (or form part of) plant nursery grounds as exempt.

3 A nursery ground is a property where small plants or trees are propagated or sown in their initial stages of growth with a view to selling them to someone else for progression onto their mature state. This is in contrast to garden centres, where plants are displayed and sold to the public, which are and will continue to be rateable (including garden centres sometimes called "nurseries").

4 The Court of Appeal in Tunnel Tech Ltd v Reeves (VO) [2015] EWCA Civ 718 found that treating buildings which are plant nursery grounds (which are not occupied with and used solely in connection with agricultural operations on agricultural land) as exempt was an incorrect application of the law.

5 On 30 March 2017, a Written Ministerial Statement set out the Government’s policy on the treatment of plant nursery grounds in England (HCWS585). A further Written Ministerial Statement on 28 March 2018 restated the Government’s intention to legislate at the next suitable opportunity to make these changes and announced that the legislation would have retrospective effect from 1 April 2015 (HCWS606).

6 The Government intends to ensure that, for the purpose of the agricultural exemption, market gardens and plant nursery grounds are treated equally. This Bill 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. This ensures that the ratepayers of such hereditaments will continue not to pay non-domestic rates, and aligns the law with the previous longstanding practice of the VOA and Government policy.

7 Since the Court of Appeal’s judgment in Tunnel Tech, the VOA have assessed some plant nursery grounds and included them on the non-domestic rating list in England with effect from 1 April 2015. This Bill will have effect from 1 April 2015 in relation to England to allow the VOA to remove from the non-domestic rating list any plant nursery grounds which have been assessed.

8 In Wales the VOA has not assessed any plant nursery grounds. The Bill will have effect from 1 April 2017 in relation to Wales to ensure that no plant nursery grounds are assessed and included on the current non-domestic rating list (compiled on 1 April 2017).


Prepared 11th July 2018