2.1 Definition of plant
Plant will be found in just about every business property there is - not all plant is rateable, but firstly it is necessary to decide if the item under consideration is plant.
Plant is not defined in statute, but the most commonly used definition of plant can be found in Yarmouth v France CA (1887) 19 QBD:
in its ordinary sense, (plant) includes whatever apparatus is used by a business man for carrying on his business not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or moveable, live or dead, which he keeps for the permanent employment in his business
Subsequent case law has added further considerations, including:
Hinton v Maden & Ireland Ltd HL ( 1959 ) 1 WLR
But the word [plant] does, I think, connote some degree of durability, and I would find it difficult to include articles which are quickly consumed or worn out in the course of a few operations
Plant will therefore include most durable items that are used for any business purpose.
2.2 The difference between plant and premises
Plant may be in the nature of a chattel (a portable electricity generator for example); or it may be in the nature of a substantial structure, like a large storage tank. Both function as, and are generally, plant.
Sometimes items can be on the margins between plant on the one hand, and premises on the other.
A distinction between plant and something that is simply part of the premises has been made in various cases, for example:
Jarrold v John Goode & Sons Ltd ( CA) 1963 1 WLR
In respect of demountable partitioning whether [it] is part of the premises in which business is carried on, or part of the plant with which the business is carried on [emphasis added]
As a general guide, premises will comprise the land and buildings, including things like doors, windows, wall and floor finishes, embedded pipes and wiring, stairways, certain supported first floors, fixed full height partitioning and general lighting, All the things that make up the physical environment in which business is carried on.
If something is part of the premises in which business is carried on, it will almost always be rateable as part of the hereditament. If something is plant with which business is carried on, rateability depends upon whether that item of plant is included in:
SI 2000 No. 540 The Valuation for Rating ( Plant and Machinery ) ( England ) Regulations 2000 (as amended) or;
SI 2000 No. 1097 ( W.75 ) The Valuation for Rating ( Plant and Machinery ) ( Wales ) Regulations 2000 (as amended)
The current regulations
The following text is generally written with reference to England. If you are dealing with a Welsh hereditament the appropriate Welsh Regulations are noted above and are, other than some dates on which the amended Regulations take effect, identical.
The regulations broadly divide rateable plant into 4 classes, Class 1 power, Class 2 services, Class 3 transport and Class 4 structures. A more detailed overview of the Classes follows later in this note.
It is recommended that you have a copy of the regulations to hand, for reference purposes, to supplement the advice given here.
2.3 The current Regulations and the Wood Committees
In 1991, a Committee under the chairmanship of Derek Wood QC was appointed with wide terms of reference to review the rating of plant and in particular to make recommendations as to harmonising the law and practice in all parts of the United Kingdom.
In March 1996 a second Committee under the same chairmanship was appointed with restricted terms to review the rating of plant, and in particular to make recommendations as to fairly treating the Utility Industries in order that they may be brought into the scope of conventional rating. (At the time these hereditaments were valued according to a statutory formula.) The Committee reported in March 1999.
Whilst not a statement of the law, (and not all their recommendations have since been written into law), the Wood Committee reports have been used by the courts as a persuasive guide to interpretation of the regulations.
2.4 Ancillary Regulations
Regulations have been made since 2000 that amend the current English and Welsh regulations.
2.4.1 Combined heat and power (CHP) exemptions
The 2000 Regulations were amended in 2001 by exempting from rating specified plant and machinery comprised in a combined heat and power station, which is fully or partially exempt from climate change levy and which produces, (at least in part), electrical power.
These amendments were incorporated in :
SI 2001 No.846 The Valuation for Rating ( Plant and Machinery ) ( England ) ( Amendment ) Regulations 2001 and
SI 2001 No.2357 ( W.195 ) The Valuation for Rating ( Plant and Machinery ) ( Wales ) ( Amendment ) Regulations 2001
For guidance on application of the CHP provisions, please refer to 7.1.1. (B) below.
2.4.2 Renewables and Microgeneration
The 2000 Regulations were further amended in 2008 by inserting a new Regulation 2A which provides for a temporary exclusion of the value of defined microgeneration plant from the rateable value of a hereditament.
SI 2008 No.2332 The Valuation for Rating ( Plant and Machinery ) ( England ) ( Amendment ) Regulations 2008
The regulations apply to England and have effect from 1st October 2008. Similar regulations came into force for Wales, effective from 1 April 2010.
SI 2010 No.146 W21 Valuation for Rating (Plant and Machinery) (Wales) (Amendment) Regulations
These amending Regulations exempt all plant from rateability to the extent that such plant has microgeneration capacity.
Microgeneration capacity is defined by reference to allowable sources of energy and the output capacity, which must not exceed 50kW (electrical), or 45 kW (thermal).
2.4.3 Exception from Class 1 of Renewables Fuelled power plant is effected by further amending regulations
S.I. 2022 No. 405 The Valuation for Rating (Plant and Machinery) (England) (Amendment) Regulations 2022 (Applying to England only)
These amending Regulations except power plant from valuation where that plant relies mainly on defined sources of renewable fuel or technologies.
Similar regulations covering Wales S.I. 2023 No. 1229 ( W.217 ) The Valuation for Rating (Plant and Machinery)(Wales)(Amendment) Regulations 2023 will come into force with effect from 1st April 2024.
Further guidance is given at 7.1.1. below.
