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This instruction relates to the valuation for rating purposes of livestock markets and should be read in conjunction with the appropriate Practice Note.

Primary Description: CM

List Description: Livestock Market and Premises

Scat Code: 158

Scat Suffix: S

This is a specialist class of property, to be valued by Valuers in each Unit.

The Class Co-ordination Team has overall responsibility for the co-ordination of this class. The team is responsible for approach, accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers and referencers have a responsibility to:

• follow the advice given at all times
• not depart from the guidance given on appeals or maintenance work without approval from the co-ordination team
• seek advice from the co-ordination team before starting any new work

Livestock markets are a sui generis use under the Town and Country Planning Use Classes Order 1987 (as amended).

Livestock markets are highly regulated and the legislation designed to protect animal welfare and provide bio-security impose significant restrictions on the way they can operate. The key legislation covering these issues are the Welfare of Animals at Markets Order 1990, the Animal Gatherings Order 2010 and the Transport of Animals (Cleansing and Disinfection)(England)(No3) Order 2003.

5.1 Methods of Valuation

5.1.1 Profits basis

Markets are not necessarily public utility undertakings (see Hereford Corporation v Taylor (VO) 1960 (53 RIT 771) and the Court of Appeal did not dissent from the view that a market was not a public utility undertaking in its judgement in British Transport Commission v Hingley (VO) and Grimsby CBC (1961 RVR 150).

In Thrapston Market Co v Newton (VO) (LT 1968 RA 415) the Lands Tribunal held 鈥溾��.in the past the Tribunal has accepted valuations of markets by reference to their accounts. But there is no rule, statutory or otherwise, that they should be valued by that method and the Tribunal is free to accept any other method if it thinks fit鈥�.

Prior to the Thrapston case, the Tribunal had determined the assessments of three livestock markets:

• Taunton Corporation v Sture (VO) (1958 LT 51 RIT 749)
• Hereford Corporation v Taylor (VO) (1960 LT 53 RIT 771)
• Oswestry Borough Council v Plumpton (VO) (1962 LT RVR 44)

A common factor in these decisions was that the adjusted accounts indicated a basic rental value but that, in each case, the local authority would make an 鈥渙verbid鈥� in order to gain possession. However, where a local authority wishes to run a market as a service it is likely to be primarily interested in keeping it solvent rather than in making a profit. Furthermore the authority could, as a matter of policy, depress the fees, tolls, or charges even to a point where the accounts showed a loss. In Bingley UDC v Melville (VO) (1969 RA 681) the Lands Tribunal came to the conclusion that a profits basis did not give the right answer when assessing a local authority cemetery running at a loss. This principle applies equally to markets, although, where it can be established without doubt that in running a particular market the genuine motive is to make a profit, accounts may be a factor to be taken into consideration.

5.1.2. Rental method

Where a rent is paid, that rent should be carefully investigated to see whether the negotiations leading to the terms of agreement were at arm鈥檚 length. In particular, a rent paid to a local authority as landlord should receive close scrutiny to see whether, for example, the authority has accepted a rent below market value in order to keep the market open as a service or to attract trade to the town.

Where direct rental evidence of an arm鈥檚 length nature is available, this evidence, in addition to giving an indication of the open-market value of the particular market, will assist in the determination of the assessments of comparable hereditaments when expressed as a percentage of the gross commissions earned by the auctioneers who operate the rented market. In the generality of cases no arm鈥檚 length rental information will be available and the practice of relating rental value to gross commissions, using the relationship obtained from analyses of rented markets, should be adopted.

This method of determining rental value was used by the High Court in Stride & Son v Chichester Corporation (1960 EG 315) in which the rent which Stride & Son were to pay from September 1959 for occupation of part only of Chichester market fell to be determined under Part II of the Landlord and Tenant Act 1954. In the knowledge that the occupiers鈥� commissions were nearly 拢15,000 in 1958 (a peak year) the Court decided that the rent payable over the next 7 years should be 拢1,500 per annum.

This practice of relating rental value to gross commissions earnable by the tenant was accepted by the Tribunal in the Thrapston case and has been followed by VOs. The details of this approach are as follows:

a. the market is to be considered vacant and to let and it should be assumed that the most likely hypothetical tenant would be either a single auctioneer or a consortium of auctioneers whose prime motive for trading would be to encourage the maximum possible trade and to extract the maximum possible profit

b. the actual average throughput (or, where these figures are impossible to obtain, the estimated annual throughput) should be distinguished as between cattle, sheep, pigs, poultry, deadstock, etc. and, for each group, the average amount of commission chargeable should be ascertained (or estimated)

c. a percentage should be applied to the total commissions calculated from the above information to obtain the sum which the auctioneer could reasonably be expected to pay as rent for the right to sell in the market. In the Thrapston decision, the Tribunal, in accepting the VO鈥檚 method, said, 鈥溾��. the question he had to answer was how much rent such a firm, or consortium of firms, would bid at arm鈥檚 length for an exclusive use of the market accommodation subject to the common law rights of the public to enter the market and buy or sell anywhere save in the accommodation that had been let off. He submitted that the rent an auctioneer would pay for the whole of the market accommodation, subject to these considerations, would be linked with the commissions he might reasonably expect to make on the sales conducted鈥�

d. to the rental value of the right to sell livestock should be added the value of any other items not directly concerned with the actual function of sales (e.g. refreshments rooms, vehicle washing facilities, produce markets, rateable tolls, etc.)

e. from the value determined under sub-paragraphs c. and d., any necessary deductions should be made to allow for the effect of any disabilities not already reflected in the number of livestock sold in the market (e.g. additional annual expenditure occasioned by age, obsolescence, bad planning, etc.)

Just as local authorities may be prepared to run markets at a loss in order to maintain a service to the community, auctioneers may, in certain circumstances, be found to be running small markets at an apparent loss for the purposes of maintaining contact with agricultural clients from whom their professional practices stem. Such circumstances will require special consideration and VOs should deal with each case on its individual merits.

5.1.3 Contractor鈥檚 basis

The contractor鈥檚 basis of valuation is not considered to be a suitable approach and should not normally be used. It may, however, be necessary to have recourse to this method in bringing into assessment, for the first time, a new market the potential of which cannot be gauged until it has been in operation for some time. The decision of the Lands Tribunal in the case of Melville and Rees (VO鈥檚) and Airedale and Wharfedale Joint Crematorium Committee (1963 3 RVR 201) would appear to lend support to the use of the contractor鈥檚 basis under these circumstances.

5.2 Tolls

The rateability of tolls is dealt with in RM Section 6 part 3 : Section 1100.

Tolls can only be rateable in the hands of the occupier of the land and cannot be the subject of a separate assessment. See Faversham Navigation Commissioners v Faversham Union (1867).

It was held in The Mayor, Aldermen and Burgesses of the Borough of Oswestry v Hudd (VO) (CA 1966 RA 5) that a distinction can be drawn between the 鈥渕arket鈥� in the sense of the right to hold a concourse of buyers and sellers, and the place where the concourse is held - i.e. the 鈥渕arket place鈥�. The 鈥渕arket鈥� in the former sense is a local monopoly right commonly originating in a grant from the Crown; such grant often confers a right to levy tolls on merchandise at the market and where this right is separately held as an incorporeal right, it is not rateable.

If exclusive possession of a stall or standing is required by a trader, this can be obtained only by the permission of the owner of the soil of the 鈥渕arket place鈥� (not necessarily the owner of the market); any payment for such privilege is known as stallage or piccage. Stallage or piccage is a profit of the soil and is rateable. The owner of the market place need show no grant, prescription nor statutory authority for taking stallage or piccage. The criterion would seem to rest on whether payment of the toll confers on the payer a right to occupy part of the soil of the market. If so, the tolls should be included as a constituent of the assessment of the market.

In cases of doubt or difficulty or where the VO has included tolls in valuation and their inclusion is disputed, a full report, together with a copy of the statute relative to the market in question, should be submitted to CEO (Rating) through the Technical Advisor.

Stalls or standings separately occupied on a permanent basis should be separately assessed - Brooks (VO) v Greggs and Others LT 1991 RA 61 - see also RM 5 : 630

The size, type, age and geographical location of a livestock market will influence the range and quality of the facilities encountered.

When carrying out an inspection care should be taken to identify any separate hereditaments and where they are found to exist, sufficient measurements should be recorded to enable that accommodation to be valued in accordance with the appropriate valuation scheme.

A comprehensive measured survey of all the accommodation found within the mart will not be required to enable a valuation to be carried out. A detailed record should however be taken of any office accommodation that is not used exclusively by the mart operator for mart related administration (e.g. offices used for the provision of professional and / or agency services) and of any cafe / restaurant accommodation that is not in the paramount occupation of a third party; this accommodation, if present, should be measured to Gross Internal Area (GIA) in accordance with the VOA Code of Measuring Practice for Rating Purposes.

A description of the agricultural hinterland and the nature, location and accessibility of the mart should be prepared.

A site layout plan which records the use made of all the land and buildings found within the site boundaries should be produced.

A full description of all land and buildings should be recorded; this description should include details of the age, condition, method of construction and the quality / type of finish involved.

A detailed photographic record should be taken in all cases providing permission is first obtained from the mart operator.

The number, frequency and type of sale days should be established and details of the commission rates charged for each type of sale activity should be obtained. The Livestock Market Form of Return (VO6043) should be issued so that the total income received from all the activities carried out within the mart can be determined.

The number of sale rings, the adequacy of the penning areas (covered /open) and the ease of circulation and access for unloading / loading should be recorded.

The method used for effluent disposal should be established and details of the bio-security measures in place should be noted.

Finally, any factor which the mart operator identifies as an issue which restricts or significantly increases the cost of operation should be noted.

Surveys, plans, Forms of Return (VO6043) and any lease documentation should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

Photographs should be uploaded onto the Rating Support Application (RSA).

The approach to be followed is set out in the relevant rating list Practice Note.

All valuations for the 2017 Rating List should be entered onto the Non-Bulk Server (NBS) (Class - Livestock Markets (Scat Code 158)).

Other support available:

• Survaid
• Class Co-ordination Team

1. Market appraisal

1.1 Livestock markets operate in a difficult business environment, their performance and viability are affected by a variety of factors which are inextricably linked to the challenges faced by the wider agricultural industry.

1.2 As at 1 April 2021 there were about 118 operational marts in England and Wales under the control of about 80 companies. Most still host one or two sales per week with additional sales in the peak period of September to December, some smaller or remote markets are used just for autumn sales.

1.3 Stock prices increased steadily during 2020 and in early 2021 prices for cattle and sheep were 10-20% higher than in 2020. The concerns over economic uncertainty within the sector which had resulted in some reductions in the price of breeding stock in autumn 2018 and across the industry in 2019 appear to have lifted. On-going issues relating to the export of live sheep and cattle remain largely unresolved. Other long-standing issues further impacting the industry include, increased competition from direct purchasing by abattoirs, increasing overheads following recent changes to the way in which drainage costs are calculated (now on a total site area basis), higher costs as imposed by electricity suppliers, and the national minimum wage have all impacted on the profitability of livestock markets. The public鈥檚 attitude to meat consumption and environmental sustainability also continue to be of concern to the industry.

1.4 The COVID pandemic has impacted on the operation of marts since the outbreak in March 2020. The marts were allowed to continue operating as they are an essential part of the national food chain and to prevent animal welfare issues, but restrictions including the imposition of 鈥榙rop and go鈥� with the farmers unable to remain on site to sell their stock, with this handled by mart staff, reportedly led to increased operating costs. Sales of some classes of livestock, such as dairy cows were not permitted for part of the year though marts were able to facilitate private farm to farm sales. Restrictions have impacted on other income streams such as cafes and other outlets operated by third parties.

1.5 Mart operators rely heavily on the support of the local farming community for their success. Any loss of market share to deadweight sales, direct selling and /or other operators is detrimental. The increased use of cattle collection centres by abattoirs is perceived as the major threat to their businesses. The industry reports that only 50 to 60% of all fat stock sales are now routed through livestock marts. The requirement to remain competitive puts pressure on the level of commissions that can be charged which in turn can impact on overall profitability.

1.6 Bio-security, movement restrictions and strict regulatory controls to improve traceability and animal welfare continue to affect the way marts can operate and put pressure on margins. Whilst onerous, the success of these measures is evidenced by the fact that, with the exception of Bovine TB, the livestock industry was relatively disease free at the Antecedent Valuation date (AVD) .

1.7 Whilst the current geographical distribution of the marts across the country has not altered, since the last AVD a small number of marts have closed as a result of redevelopment, acquisitions and mergers.

2. Changes from the last practice note

2.1 There is only limited rental evidence available and no major change of approach is warranted. It is acknowledged however, the burden of overheads continues to increase, which particularly impacts smaller operators and this is reflected within the 2023 scheme.

3. Ratepayer discussions

3.1 Discussions have been held with industry representatives, with whom the VOA has proposed the revised scheme as shown within section 4 below.

4. Valuation scheme

4.1 In the absence of reliable direct rental evidence to the contrary, it is recommended that all Livestock Markets should be valued by applying a percentage to the fair maintainable gross commissions that are capable of being generated from on-site sales, in accordance with the following guidelines.

4.2 Income from livestock sales

A percentage taken from the table below should be applied to the total gross livestock commissions, exclusive of VAT.

Unlike previous revaluations there have been no countrywide disease outbreaks in the years immediately preceding the AVD that will have resulted in a distortion in trading patterns. In determining what level of fair maintainable gross commissions to adopt as at 1 April 2021, careful consideration will need to be given as to whether, given the nature and location of the mart concerned, the trends and figures suggested by the year end 2019 and 2020 returns will be sustainable. Valuer judgement will be required to ensure that the figures adopted accord with the requirements of the rating hypothesis.

The level of gross commission should not be adjusted to reflect bad debts unless there is clear evidence that the level of non-payment is significantly in excess of the norm for the particular type of market and that it is not due to poor financial management by the operator.

Total gross commissions (livestock element only)

Percentage is derived from the gross commission from livestock sales and should be interpolated between bands.

Below 拢250,000 5%

拢250,000 - 拢750,000 5-7.5%

拢750,000 - 拢1,500,000 7.5-14%

拢1,500,000 - 拢2,500,000 14-15%

拢2,500,000 - 拢5,000,000 15-16%

Care should be exercised when comparing older marts to more modern equivalents, achieving similar levels of turnover. However, such issues as poor access to town centre markets will largely be reflected within commission income.

4.3 Income from other sources

The terms of occupation of any ancillary activity need to be ascertained in order to decide whether a separate unit of assessment is appropriate. Where the mart operator is in paramount control of the facility, the income/gross commissions received from non-livestock sales should be treated as follows:

4.4 Lorry washes

Access to lorry washes is a statutory requirement for livestock markets; if this facility is used solely in connection with mart business it should be deemed to be reflected in the valuation without any specific addition. Where a lorry wash is used by the general public and other businesses on non-mart days the value of this facility should be added to the valuation by making a specific addition based on 10% of the gross receipts from this source.

4.5 Lorry/car parking

Where income is derived from lorry/car parking on non-market days then an addition should be made having regard to the local levels of value for such facilities, in making this addition adjustments should be made to reflect the number of days a week this facility cannot be used for this purpose. In the absence of a local comparator an addition should be made based on 25% of gross income from this source.

4.6 Car boot sales and market stalls

Adopt 30% of the payment received from a car boot/market operator or 50% of net income from direct sales where the market or car boot sale is run by the occupier of the livestock market.

4.7 Chattels/antiques auctions sales

Adopt 10% to15% of gross commission depending on how significant this source of income is in relation to the market as a whole. Where gross commissions from this source comprise less than 10% of the income generated from livestock sales then this income stream should not be valued separately; the income generated should be added to the gross commissions for the mart as a whole.

4.8 Vehicle and plant and machinery sales

Many livestock marts are diversifying to improve income levels and the sale of vehicles and agricultural plant and machinery are becoming increasingly common. In marts where this type of sale forms only a subsidiary part of the whole and they are carried out in non-specialised land and buildings, the commissions should, where they contribute less than 10% of total mart income, be valued at the same rate as that adopted for livestock sales. Where the income is more substantial and adaptations have been made to either land and buildings, a valuation basis more akin to that adopted for chattel sales should be utilised.

4.9 Non-livestock sales offices

Offices which are not used by the mart operator exclusively for mart related administration (for example, offices used for the provision of professional / agency services or electronic auctions) and offices used as kiosks in the paramount occupation of the market operator should be added as a separate addition in the valuation. The accommodation should be valued at a level which, whilst consistent with the levels adopted for similar offices in the locality, also reflects the fact that it forms part of a larger mart hereditament.

4.10 Caf茅/restaurant

All markets generally have refreshment facilities on site. The quality varies from a timber or portable structure to a large building of permanent construction, which offers a full meal service, and which may be open on non-market days to serve other commercial premises in the locality. Where the catering facility is only open on market days, it should be reflected in the overall valuation with no separate addition being made, if the income generated from the caf茅/restaurant is significant and the facility is utilised on non-mart days an addition should be made using either a percentage of gross receipts or a price per square metre which reflects the levels of value that are applied to separately assessed caf茅s and restaurants in the locality. In some cases the catering facility is operated by a 3rd party on a licence arrangement, in such cases 30% of the licence fee should be adopted. Caf茅s and restaurants which are not in the paramount occupation of the market operator should be separately assessed.

4.11 Horse sales

Within livestock markets income from this source will be minimal and is not comparable with horse bloodstock markets as described within para 4.13. It is therefore recommended commissions are included within livestock turnover figures.

4.12 Advertising rights

These will normally be separately assessed unless they are not let out and they comprise an advertising station. Where the Mart does advertise feed, machinery, agrochemical suppliers on the walls around the ring and other prominent locations around the site and receives payment, this should be added at 50% of income.

4.13 Bloodstock markets

The recommended valuation approach for horse bloodstock markets is one based on a full analysis of receipts and expenditure. The dedicated equine bloodstock marts, are quite different from the normal livestock market in terms of their physical facilities and the nature of the sales which take place and as a consequence they should not be valued in accordance with this practice note.

4.14 Co-ordination

Due to the complexities involved in valuing livestock markets, Class Coordination team members should be approached when dealing with both Check, Challenge and Appeal and maintenance work on this class.

1. Market Appraisal

Livestock Markets operate in a difficult business environment; their performance and viability are affected by a variety of factors which are inextricably linked to the challenges faced by the wider agricultural industry.

As at 1 April 2015 there were 124 operational marts in England and Wales under the control of 84 companies.

The movement in stock prices and changes to the level of commission charges that have occurred since 1 April 2008 has seen turnover levels, for the majority of marts, rise significantly. As at 1 April 2015, however there was growing concern within the industry that these turnover levels may not be sustainable in the future given direct purchasing by Abattoirs which was squeezing operators, changes in eating trends 鈥� vegetarianism, increased chicken consumption, fluctuating stock prices, increasing overheads, movement restrictions and other uncertainties including future trends in stock numbers and the size of the national herds particularly pedigree and high quality breeding stock. It is alleged that large numbers of this stock has been lost and cannot be replaced. The effect of these matters demonstrated in the lower level of rental bids for new leases.

Many of the challenges facing the industry were perceived to be greater than experienced at the last AVD although in many respects they were similar difficulties to those which existed at the last revaluation.

Mart operators rely heavily on the support of the local farming community for their success. Any shift in loyalty can have a dramatic impact on the viability of the business. Operators, as a consequence, need to remain competitive at all times and deliver the level and quality of service necessary to ensure that they do not lose market share to deadweight sales, direct selling and /or other operators. For example, the organisation of Cattle Collection Centres by abattoir operators is perceived as a major threat to their businesses. The requirement to remain competitive puts pressure on the level of commissions that can be charged which in turn can impact on overall profitability.

Bio-security, movement restrictions and strict regulatory controls to improve traceability and animal welfare continue to affect the way marts can operate and put pressure on margins. Whilst onerous the success of these measures is evidenced, by the fact that, with the exception of Bovine TB, the livestock industry was relatively disease free at the AVD.

Operating costs, particularly water and effluent charges are continuing to increase and have to be largely absorbed by the operator.

Changing attitudes and trends and the impact of government / EU policies (e.g. the removal of subsidies) are also areas of concern as these can affect the level of sheep and beef production which in turn can then have a knock-on effect on turnover /profitability.

Despite these challenges and concerns, marts continue to operate.

The current geographical distribution of the marts across the country is not expected to alter but it is likely that a small number of marts will close in the future as a result of acquisitions and mergers.

A number of marts have relocated to purpose built out-of-town developments funded to a large extent by the re-development value of their previous sites. There are some marts that could potentially do likewise but in the immediate short term such a move would appear unlikely as they depend on the marts securing firm funding and complying with / satisfying strict planning requirements. Funding a new mart from private funds is extremely difficult in the present climate.

Re-location, whilst an attractive option and one which potentially offers the opportunity to grow the business is not a quick fix nor a viable option for the majority of marts. Diversification and /or further rationalisation are the two main ways that existing marts can look to increase turnover.

Some marts have been successful in securing and protecting turnover by diversification but the location and physical characteristics / layout of a significant number of marts, particularly the more traditional / older ones, prevent this happening. Most marts have now adapted into the modern format

The outlook for the future of the livestock market industry remains challenging but its survival should be secured providing:

• it receives the continued support of the farming community
• there are no major disease outbreaks and
• the marts are proactively managed to develop opportunities for growth and control outgoings / minimise risk and exposure to debt.

2. Changes from the 2010 practice note

Initially, there was very little new rental evidence at AVD, although it was known that there were deals in confidential negotiations. Once this evidence close to the AVD emerged it demonstrated that across the sector rental bids had fallen. This has resulted in a re-appraisal of the AVD evidence and a slightly amended basis

Apart from the above, an adjustment to the percentage which should be applied to the income received from car boot / market stall operators has occurred.

3. Ratepayer Discussions

The Livestock Auctioneers Association and a representatives for the Scottish Marts have been in active discussions and provided information. The Valuation Scheme set out below is based upon these discussions, and whilst, the LAA cannot bind its members, both sides acknowledge the approach and the active and extensive discussions which have taken place to arrive at these figures.

4. Valuation Scheme

The limited rental evidence that is available suggests that the rateable value of a Livestock Market should still be determined by applying a percentage to the fair maintainable gross commissions that are capable of being generated from on-site sales.

In the absence of reliable direct rental evidence to the contrary, it is recommended that all Livestock Markets should be valued in accordance with the following guidance.

4.1. Income from Livestock Sales.

A percentage taken from the table below should be applied to the total gross commissions, exclusive of VAT.

Unlike the previous two revaluations there have been no countrywide disease outbreaks in the years immediately preceding the AVD that will have resulted in a distortion in trading patterns. In determining what level of fair maintainable gross commissions to adopt as at 1 April 2015, careful consideration will need to be given as to whether, given the nature and location of the mart concerned, the trends and figures suggested by the year end 2014 and 2015 returns will be sustainable. Valuer judgement will be required to ensure that the figures adopted accord with the requirements of the rating hypothesis.

The level of gross commission should not be adjusted to reflect bad debts unless there is clear evidence that the level of non-payment is significantly in excess of the norm for the particular type of market and that it is not due to poor financial management by the operator.

The percentage adopted should reflect the physical and locational characteristics of the property.

The percentage will normally reflect that the buildings or the layout of the mart is commensurate with a mart achieving the scale levels of trade.

For marts with gross commissions in excess of 拢750,000 it would be expected that the norm would be a mart with reasonably good facilities, communications and hinterland. It has been suggested that valuer judgement should be applied for old-style marts with inferior buildings but care should be exercised that the marts level of trade already reflects its physical characteristics and that it鈥檚 outgoings are equally favorable to more modern equivalents.

4.2. Income from other sources

The terms of occupation of any ancillary activity need to be ascertained in order to decide whether a separate unit of assessment is appropriate. Where the mart operator is in paramount control of the facility, the income / gross commissions received from non-livestock sales should be treated as follows:

Lorry washes

Access to lorry washes is a statutory requirement for livestock markets; if this facility is used solely in connection with mart business it should be deemed to be reflected in the valuation without any specific addition. Where a lorry wash is used on non-mart days the value of this facility should be added to the valuation by making a specific addition based on 10% of the gross receipts.

Lorry / car parking

Where income is derived from lorry / car parking on non-market days then an addition should be made having regard to the local levels of value for such facilities; in making this addition adjustments should be made to reflect the number of days a week this facility cannot be used for this purpose. In the absence of a local comparator an addition should be made based on 25% of gross income.

Car boot sales and market stalls

Adopt 30% of the payment received from a car boot / market operator or 50% of net income from direct sales where the market or car boot sale is run by the occupier of the livestock market.

Chattels / antiques auctions sales

Adopt 15% to 20% of gross commission depending on how significant this source of income is in relation to the market as a whole. Where gross commissions from this source comprise less than 10% of the income generated from livestock sales then this income stream should not be valued separately; the income generated should be added to the gross commissions for the mart as a whole.

Vehicle and Plant and Machinery Sales

Many livestock marts are diversifying to improve income levels and the sale of vehicles and agricultural plant and machinery are becoming increasingly common. If these sales are held in specialist premises, such as Ely in Cambridgeshire and the 4x4 vehicle Auction Centre in the former livestock mart at Leominster, the properties should be valued in accordance with the methodology used to value Car Auction sites. In marts where the this type of sale forms only a subsidiary part of the whole and they are carried out in non-specialised land and buildings, the commissions should, where they contribute less than 10% of total mart income, be valued at the same rate as that adopted for livestock sales. Where the income is more substantial and adaptations have been made to either land and buildings, a valuation basis more akin to that adopted for chattel sales should be utilised.

Non-livestock sales offices

Offices which are not used by the mart operator exclusively for mart related administration (for example, offices used for the provision of professional / agency services or electronic auctions) and offices used as kiosks in the paramount occupation of the market operator should be added as a separate addition in the valuation. The accommodation should be valued at a level which, whilst consistent with the levels adopted for similar offices in the locality, also reflects the fact that it forms part of a larger mart hereditament.

Caf茅 / Restaurant

All markets generally have refreshment facilities on site, or very close by. The quality varies from a timber or portable structure to a large building of permanent construction, which offers a full meal service with restaurant drinks licence, and which may be open on non-market days to serve other commercial premises in the locality. For the majority of marts the facility should be reflected in the overall valuation with no separate addition being made; if the income generated from the caf茅 / restaurant is significant however and the facility is utilised on non-mart days an addition should be made using either a percentage of gross receipts or a price per square metre which reflects the levels of value that are applied to separately assessed caf茅s and restaurants in the locality. Caf茅s and restaurants which are not in the paramount occupation of the market operator should be separately assessed.

Horse sales

It is recommended that the percentage of gross commissions for this source of income be increased by 2.5% when gross commissions from this source comprise more than 10% of the total livestock income. Small-scale sales below this level should be valued at the appropriate gross commission rate for the mart as a whole.

Advertising rights

These will normally be separately assessed unless they are not let out and they comprise an advertising station. Where the Mart does advertise feed, machinery, agrochemical suppliers on the walls around the ring and other prominent locations around the site and receives payment, this should be added at 50% of income.

Bloodstock Markets

The recommended valuation approach for Horse Bloodstock Markets is one based on a full analysis of receipts and expenditure. The marts, which are located at Newmarket and Doncaster, are quite different from the normal livestock market in terms of their physical facilities and the nature of the sales which take place and as a consequence they should not be valued in accordance with this Practice Note.