10 replies to this topic

[Cornish Gems]

We were trying to find out whether one had to pay Business Rates on Farm Shops as in this topic, F2F The Farm Shop, Sylvie says that, 'the only thing with using the barn as a shop is that you will then be liable to pay full business rates as any other shop in the highstreet. I would suggest you find out how much these would be.' Does this mean the whole of the barn? Is it a different scenario if the shop is just in one corner of the barn?

In our search we came across the site called Business Link and found this page made excellent reading Business Link and Farm Shops. We did wonder whether the payment of Business Rates depended on whether planning permission was needed for the shop.

BTW - the page mentions unprocessed food - do sausages and ham therefore count as processed foods?

Another interesting point is the link leading to information about obtaining a formal decision to a planning application, known as a lawful development certificate, (you will be required to pay a fee). If the authority refuses a certificate, you can either apply for planning permission, or appeal to the Department for Communities and Local Government. Download the Department for Communities and Local Government lawful development certificates guidance from the Agricultural Document Library (ADLib) website (PDF, 92K) - Opens in a new window.

[Canning Farm]

Hello Cornish and little Gem

I remember writing that article just before Christmas and am still waiting for an answer from Dave. Does Dave still attend this forum anymore or is he still poorly?

For me this is the conerstone of his book in getting the customers to you.

The book skips over this very important issue. Everyone in some form will be creating a product from their produce even if its to make sauasages or bugers. To do so there is a process to get from the butchered meat to the finished product for sale. If this process is farmed out for others to do then there is a cost expenditure. If I can do it all under one roof and in house then that is good for my profit margins.

If you are reading this K Chally then your feedback would be most welcome as to how and where you produce your sauasages.

I have read Carol Harris book, which is a very good read by the way. It was her comments on the Farm Shop that I wanted to explore and get a greater understanding from Dave and the forum.

So guys we are all a year older and wiser. Do we have a definitive answer to some of those questions that I raised last year. You have your barn in place under Permitted Development. Within part of that barn you want to allocate to the production of your produce. So

a) Installing a cold room in the barn for meat. - Is this a change of use of the barn. YES or No.

fitting out part of the barn for the prepartion of meat. - Is this a change of use of the barn. YES or No

c) fitting out part of the barn for display storage of your produce to be sold to shoppers 'from the farm gate' - Is this a change of use of the barn. YES or No and do Business rates apply

All of the above will require notice to the Local Environmental Health Officer who in turn will advise you on floor specification, walls etc. It is Planning matters that I am not clear on and which concerns me.

[KChally]

Hi,

At the moment a friend of ours who works in a butchers shop does all our butchery for us. With the amount of meat we are producing and selling it would be very time consuming to actually do the butchery ourselves, even if we had the set up to do it. Maybe in the future we may set our own butchery up and employ someone to come in and do the job for us. We spend most of our time with looking after the animals, marketing our produce and actually going out and selling it at farmers markets and events. There isnt really much time left for butchery. Once we have the house, (theres the kiss of death) we hope to make some things ourselves, with added value, like pies etc. Maybe then I could leave my part time job lol.

Hubby has also said he doesnt want to spend time being a butcher, he wants to do the farming thing and sell the meat. To produce the necessary financial figures for the "test" you really need to focus on the selling of the meat and not the butchery.

As I have said, we sell our produce at farmers markets and events, but we sometimes have people come to the farm to buy. We dont have a shop but I would like to have one in the future. The problem for us is that we are not on a main road which makes things a little more difficult to sell our meat from the farm.

I hope this helps

KChally

[surreydodger]

Hi Mr Canning

I don't know the answer to processing food stuffs within the farm buildings but I would have thought it requires a change in planning use. Surely it now becomes food processing which would not be the same as agricultural use. Because farm diverification is well supported I would not have thought this a difficult change to achieve.

But once changed, I fear the rates use would be considered commercial and applied accordingly.

The farm shop rates issue I think may be less clear cut. Retail outlets I think are classed A1, etc and attract quite high rates. However, it does depend on location and how produce is being sold so I would imagine, if retail rates are applicable then they would not be considerable. The question is, if you are selling produce that you have created from your own stock (meat or veg) is that strictly retail use?

A retailer usually buys in finished articles ready for sale. A farm shop is normally selling products it has created. In essence, this would be the same as a factory selling its products. The fine line there is whether a factory selling its products is selling direct tot eh public 'over the counter'. In this day and age of internet based sales, I think it would be very difficult to ascertain exacltly what direct over the counter sales to the public, really is.

[KChally]

This farm shop thing does seem quite appealing, but I think it would be quite difficult to get customers to come if you are only selling your own produce. The shop would have to stock a large variety of produce apart from your own to warrant the general public making the effort. You only have to go out and have a look at the farm shops that are already out there, to see the sort of stock they have to sell to make any money.

12 months ago a new farm shop was set up near to us. They have to sell 75% their own produce, (there's no way he can do that at the moment) 20% from within 5 miles and 5% from 20 miles away. This is on a farm which already has the buildings and he had to get planning permission. He just set the shop up and applied retrospectively (he is a parish councillor which says it all doesnt it)

KChally

[che]

Think the answer is to convert a small area of excisting buildings for "Farm Gate Sales" for which you dont need PP. Once you get into processed food sales you enter another area and EH become involved and possibly business rates.
A catering trailer could help you achieve meet the legislation and you may need to deliver to avoid it becoming a shop. I think it all depends on how difficult councils wish to make it, bare in mind councils are under pressure to increase revenue.
If you stick to the yard stick of selling 90% of your own produce you are less likely to attract attention.

[The Blacksmith]

Think the answer is to convert a small area of excisting buildings for "Farm Gate Sales" for which you dont need PP. Once you get into processed food sales you enter another area and EH become involved and possibly business rates.
A catering trailer could help you achieve meet the legislation and you may need to deliver to avoid it becoming a shop. I think it all depends on how difficult councils wish to make it, bare in mind councils are under pressure to increase revenue.
If you stick to the yard stick of selling 90% of your own produce you are less likely to attract attention.

If you wish to make a small part of your barn into an area for selling,this becomes a shop and a1 use the inland revinew will call around to asses it for rates and then inform the council of the chainge of use. the same rates apply for all shops in a1 use allthow a reduction will be calculated for the condition of and location of the shop, if you do not build the shop in ie put up walls and have a separte entrance then the whole barn will be acessed for rates, at the moment there is a reduction in buisnes rates for small buisiness and if your rates would be under £ 5000 pa then you would pay nothing, but this will chainge at some point. I have been through this over the last 5 years. this is only my experance of the system.
Good luck.

[Canning Farm]

Thanks for your opinions guys.

[sodbuster]

Hi. I have a quiery regarding buisiness rates. I recently got my land an adress, ie gave it a name. I have put a very very tatty caravan on the land to put feed in etc and have put in for the barn PD. I have just recieved a letter from the council saying they want to speak to me regarding "council tax/buisiness rstes" I am not selling anything and basically am just starting up the buisiness.Do we need to pay buisiness rates on the embrionic buisiness?
Thanks in advance.

Sodbuster

[surreydodger]

Hi SB,

So far as I'm aware there's no business rates on farm buildings or land so long as the use is agricultural.

[che]

Just come accross this link which indicates rates are payable on Farm Shops.


http://www.businessl...&type=RESOURCES


I suppose we then need to identify when Farm Gate sales change to Farm Shop. Assume things like opening hours,tills and advertising all come into it. For the time being I think the cart will need to suffice.