Westminster City Council has publicly criticised "unscrupulous traders" for trying to claim business rates tax exemption for running snail farms in commercial premises. This is a year after we reported that Liverpool Council had rejected a claim for agricultural business rates relief for an empty office building that was being used as a 'snail farm'.
Recently, council officers discovered crates of snails in two buildings on the Old Marylebone Road, prompting the Westminster City Council leader, Adam Hug, to tell the BBC, "This vividly illustrates an issue of business rates avoidance based on a ludicrous notion".
Relief from business rates is given on buildings used for agriculture (including Heliculture or snail farming). So far, Westminster City Council reports it has lost about £370,000 due to this avoidance scheme. Four such 'snail farms' have been liquidated by Westminster City Council for non-payment of business rates.
The Council is adamant that building landlords are also complicit in the arrangements. Empty properties will continue to be charged business rates, incurring a high cost for property investors, and some business rates relief specialists have advised sub-letting or heliculture to mitigate costs.
Mr Hug said, "Rather than unscrupulous traders dropping on one avoidance scheme after another, it would be good to see a general clause on business rate avoidance and evasion which stops these kinds of activities in their tracks".
Last year, we reported that Liverpool Council had rejected a claim for agricultural business rates relief for an empty office building that was claimed to be used as a snail farm. Investigators found 15 covered crates, containing as few as two snails each, with legitimate snail farmers saying it required thousands of snails for a Viable trade.
The 'Business Rates Avoidance Survey of Local Authorities 2019' looked at how much of the total amount of business rates was 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.
External links
Westminster City Council: More "snail farms" found in London offices as Westminster City council acts against tax avoidance racket
Isle Investments Ltd v Leeds City Council EWHC 345
Local Government Association: Business rates avoidance survey of local authorities 2019