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Compost: Non-Domestic Rates

Volume 471: debated on Tuesday 29 January 2008

To ask the Secretary of State for Communities and Local Government what recent changes the Valuation Office Agency has made to its practices employed in valuing composting facilities for business rate purposes; what guidance the Agency has produced on such practices; and under what circumstances such facilities are eligible for an agricultural rating exemption. (182336)

The Valuation Office Agency has recently issued advice to its valuation officers on the approach to valuing those composting facilities that are rateable. This advice is publicly accessible on the VOA website in Rating Manual volume 5 section 1119.

Where composting is carried out on a farm using material solely produced on that farm, the site will be exempt because it forms part of normal agricultural process.

Where composting material is brought on to a site and processed for compost, this will not fall within the exemption for agriculture. Such composting operations will often have contracts for processing waste with local authorities.

The valuation methodology has not changed and remains a rental method, estimating the annual value of the land and buildings occupied for non-agricultural use.

Valuation officers have a duty to maintain rating lists and will include non-exempt, non-agricultural commercial composting sites. These are often (though not always) found on otherwise exempt agricultural properties. When included in a rating list, local authorities have a duty to collect the rates due.