According to various sources in the press, Liverpool Council has rejected a claim for agricultural business rates relief for an empty office building that was claimed to be used as a snail farm. In a previous case back in 2021, the courts ruled that a lease granted for a Heliculture business was a sham.
Business rates represent a high cost for property investors with empty properties on their hands. On the advice of business rates relief specialists, empty property owners may seek to avoid the cost of rates by sub-letting their buildings to tenants to secure tax relief.
There are a variety of legitimate methods of claiming relief, for example, a qualifying small business tenant may claim relief under the small business rates relief scheme. Business rates attract a specialised and creative tax avoidance industry and this has led specialist firms to promote claims for rates relief for agricultural or charitable use. Alternatively, if there is a change to residential use, Council Tax may apply instead of Business Rates.
In the case in Liverpool, investigators found 15 covered crates, containing as few as two snails each, had been kept on the lower ground floor of 9 Dale Street since 2023. Snail farmers around the UK told BBC News they could not see how so few snails could make for a viable trade. "You need thousands of snails, otherwise there’s no business," quoted the BBC.
Local authorities are battling against a range of different relief claims. Cases have been litigated by Bradford, Leeds and Liverpool councils.
The 'Business Rates Avoidance Survey of Local Authorities 2019' looked at how much of the total amount of business rates were lost to avoidance through particular methods. It found that up to 17% of council tax was lost using tactics which included 'snail farms'.
- In October 2018, Kirklees Magistrates Court awarded £16,000 costs to Kirklees Council following a successful prosecution for the avoidance of non-domestic rates in a snail farm case.
- In 2020, Bradford City Council was warned by its revenue and benefits team that snail farming was on the increase to avoid paying rates.
- In 2021, the High Court ruled that a snail farm tenancy deal between a landlord in Leeds and the management company Crusader was a 'sham'. The Court of Appeal upheld the High Court ruling.
In the current case, which appears to have featured an ex-BHS store, molluscs, reared for the food industry were kept in small containers on one floor of the building. They were insufficient for commercial application and the claim for agricultural use failed.
External links
Isle Investments Ltd v Leeds City Council EWHC 345
Local Government Association: Business rates avoidance survey of local authorities 2019
