Articles have popped up in the past week detailing reports from local authorities of a company called Snai1 Primary Products 2023 Ltd putting crates of snails in empty properties across the country.
An obvious question to this is simply "why?".
Why?
The short answer is to try and save business rates.
Presently, after an initial exempt period (either the first three or six months), property owners in England pay full business rates on empty properties. This creates a compound issue where the landlord is receiving no rental income and still paying substantial overheads.
This issue has spawned a multi-million pound market for finding solutions to this problem; ranging from the bizarreness of snails (and sometimes mushrooms!) in city centre offices to compassionate, ethical solutions that try and solve other societal problems.
Why snails?
Boxes of snails are being placed in empty properties with the view of claiming the properties are being used as snail farms.
Under Schedule 5 of the Local Government Finance Act 1988, land and buildings used in connection with agriculture are exempt from rating. It has been widely reported that the snail farms are claiming an exemption on those grounds.
However, it is likely the snail farm operators are actually attempting to claim the premises used to breed snails are "fish farms". With the definition of fish farming extending to include the cultivation of shellfish used for human consumption. Whether snails count as shellfish was a subject of debate in Parliament shortly after the 1988 Act was passed, with Parliament concluding land-based snails are molluscs and fall into the definition.
How does the snail farm work?
A recent BBC article detailing Snai1 Primary Products 2023 Ltd's snail farm in an empty property in Liverpool provides more context on the operation.
The article states fifteen crates each containing as few as two snails have been placed into the property with the view of creating 1000 snails eggs and eventually selling circa 200 snails for £14. The article quotes other snail farmers who have suggested you need thousands of snails for a viable business.
Looking at the Valuation Office Agency's entry for the property, the building detailed in the BBC article is just shy of 5000 sq ft and the fifteen crates appear to be roughly the size of a shoebox each.
How big a problem is this?
This is not the only property within Liverpool associated with Snai1 Primary Products 2023 Ltd. Freedom of information data shows L'Escargotiere (A22) Ltd, which has a common director with Snai1 Primary Products 2023 Ltd, is liable for the former HMRC Imperial Court building at 2-24, Exchange Street East. According to the Valuation Office Agency, this building is almost 76,000 square feet and would attract a business rates charge of circa £470,000 per annum.
Analysis of further freedom of information data shows multiple other addresses linked to L'Escargotiere (A22) Ltd and the surrounding group of companies both presently and historically; notably a 62,000 square foot factory in Swindon (reported here), a 7,700 sq foot office on Blackfriars Road and a 10,700 square foot office in Cirencester. The combined, estimated business rates charge these three properties alone would usually attract is over £330,000 per annum.
In total, we have found thirteen business rates valuations linked to the Snai1 Primary Products 2023 Ltd group of companies beyond the property initially reported by the BBC.
Also of interest is an article from 2021 showing pictures strikingly similar to the those in the BBC article with the same branding on the snail crates within a shop in Newcastle town centre.
Whilst it can't be confirmed exactly what is taking place or took place at these properties and whether snails are or were always involved, it is possible some method of rates mitigation could have happened as L'Escargotiere (A22) Ltd has entered liquidation. This is potential method of reducing empty rates as when a ratepayer enters liquidation, the lease is transferred to the Crown as bona vacantia (ownerless property) and the debt is absolved.
How do we fix this?
In our research, we have not found a single business rates valuation that has been linked to the group of companies that has been made exempt under a agricultural or fish farm exemption.
There are significant hurdles to achieve an exemption. To gain an exemption, an application must be made to the Valuation Office Agency (VOA), this application could take years to reach a conclusion.
Further, to achieve the fish farm exemption, as an example, the VOA must be satisfied the buildings are being used solely for the cultivation of shellfish for the purpose of producing food for human consumption.
It could certainly be argued that the snails are being bred for human consumption but in our opinion, and from our experience with the Valuation Office Agency, we believe the VOA would take the view that snails are being cultivated for the purpose of not paying business rates and no exemption would be granted.
For additional reading on the subject, we would recommend the High Court's decision in Isle Investments Limited v Leeds City Council [2021] EWHC 345 and failed attempts at using snails to avoid business rates in Bradford in 2020 and Kirklees in 2018.
If you have any further questions, please feel to get in touch with us on 0208 0950 990 or info@hollowaybond.co.uk.
Comments