Open air festivals

Landowners who organise festivals on their land, or have an agreement with a company to run one, may inadvertently find themselves liable to pay business rates.

These events fall under the scrutiny of the Valuation Office Agency (VOA). Whilst agricultural land and buildings are exempt from non-domestic rates, the exemption is rather limited.

The Local Government Finance Act 1988 narrowly defines agricultural land as “arable, meadow or pasture ground only”. Thus annual or recurring music festivals may become liable to assessment for business rates.

Consider carefully when planning a festival on your land. Establishing who the occupier of the land is will be key to knowing who will be liable for rates in the first instance. Agreements with festival organisers should make it clear that the business rates are their responsibility.

As local authority budgets continue to shrink, it seems inevitable that the VOA will push harder to raise more money from non-domestic rates. The VOA has already contacted almost 30 festival organisations to date but has stated that it would be unlikely for a one-off or occasional festival to be caught.

The key is to look carefully at your event and decide whether your exemption is likely to have been breached.