If you own empty commercial property in the UK, business rates can feel like a constant drain on your cash flow. That pressure has helped fuel a wave of quirky mitigation schemes, including one of the oddest yet: The Snail Farm Business Rates Loophole – turning supposedly empty offices into “snail farms” to try to secure agricultural relief and avoid paying business rates altogether.
At first glance it sounds almost comic. In practice it is increasingly attracting legal action, unwelcome media attention and serious financial risk for the landlords involved. For professional investors and owner occupiers, understanding how the snail farm business rates loophole works, and why it is now being challenged, is essential.
What is the Snail Farm Business Rates Loophole?
The basic idea is simple. Agricultural buildings and fish farms can qualify for exemption from business rates. Some mitigation firms have tried to exploit this by taking leases on empty offices, light industrial units or retail space, then claiming the property is being used as a snail farm.
In reality, investigations by councils have found boxes containing very small numbers of snails in otherwise empty offices. The underlying business is rarely credible as a genuine commercial heliciculture operation. In several high profile cases, courts and councils have described the arrangements as sham schemes set up for the sole purpose of avoiding business rates, not to run a viable farm.
The mitigation company usually pays a nominal rent and undertakes to handle business rates. The landlord hopes that, by reclassifying the property as agricultural or by arguing that a separate occupier is liable, they can reduce or eliminate their own business rates bill on an otherwise empty building.
How business rates and agricultural relief work in the UK
Business rates are a tax on most non domestic properties, calculated on the property’s rateable value and collected by local authorities to fund local services. Empty properties normally get only limited relief, and after the initial exemption period the owner is typically responsible for the full charge.
Agricultural land and buildings used for the purposes of agriculture can be exempt. The crucial points are genuine use and proper classification. To qualify, the primary use of the building must be agricultural, not simply a token activity designed to change the label on the rates bill.
That is where many snail farm schemes fall down. Keeping a handful of snails in crates in a city centre office block does not turn it into a farm in any meaningful commercial or legal sense. When challenged, tribunals and courts have looked at factors such as the viability of the alleged business, the wording of the lease, the physical reality on site and the wider pattern of behaviour by those promoting the scheme.
Why councils and courts are clamping down on the Snail Farm Business Rates Loophole
Over the last few years, councils including Liverpool, Leeds and Westminster have investigated snail farm arrangements and taken action to recover unpaid business rates, sometimes with significant costs awarded in their favour. In some cases, multiple “snail companies” using similar names have been wound up after building large arrears, while the underlying landlords still benefited from extended periods without paying rates.
Media reports and professional commentary have highlighted how little real farming activity is taking place in many of these properties, with only a few snails in boxes compared to the tens of thousands needed for a viable farm. That discrepancy has made it easier for authorities to argue that the arrangements are artificial and abusive.
There is also growing political and policy pressure. Business rates avoidance more generally has been on the radar for some time, and the snail farm story has become a memorable symbol of how far some mitigation schemes have gone. Proposals include extending general anti avoidance style rules to business rates and tightening the criteria for agricultural and other reliefs.
The risks for landlords and investors
From a distance, a Snail Farm Business Rates Loophole can look like a clever way to cut holding costs on hard to let space. Up close, the risk profile is much less attractive:
- Backdated liability – if a scheme is ruled to be a sham, councils can pursue the property owner for unpaid business rates, often for several years plus interest.
- Legal and professional costs – defending tribunal or court action quickly eats into any savings the scheme promised.
- Reputational damage – being linked to tax avoidance headlines is rarely a good look for landlords seeking institutional tenants or finance.
- Director level consequences – in some cases, authorities have asked the Insolvency Service to consider director disqualification proceedings where companies have been used to facilitate avoidance.
In short, what starts as an attempt to shave a percentage off your outgoings can end up as a large, unexpected liability with additional regulatory scrutiny.
Smarter, legitimate ways to manage your business rates exposure
For commercial property owners, there are more robust options than exotic Snail Farm Business Rates Loopholes. These include:
- Checking your rateable value – ensure the valuation accurately reflects the size, specification and location of the building. If not, a properly evidenced challenge can reduce your bill.
- Exploring genuine reliefs – small business rate relief, temporary relief for empty properties, listed building concessions and enterprise zone incentives can offer real savings where the criteria are genuinely met.
Wikipedia - Re thinking use and occupancy – short term lets, pop up occupiers or flexible workspace models can keep space legitimately occupied while generating income.
- Investing in the building itself – improving energy performance and usability can make a property more attractive to tenants, reducing voids and therefore time spent paying empty rates. This is where a detailed commercial EPC guide or similar resource can be far more valuable than any artificial mitigation arrangement.
By focusing on occupancy, efficiency and long term attractiveness to tenants, landlords can often improve their net position without straying into grey areas that invite enforcement.
What could happen next for business rates and quirky schemes?
Given the publicity around snail farms and other mitigation tactics, further reform of business rates feels likely. Possible developments include:
- Stronger anti avoidance rules specifically targeted at business rates.
- Clearer guidance from the Valuation Office Agency on how agricultural and other reliefs will be tested in practice.
- More coordinated litigation strategies between local authorities to establish precedent and deter promoters.
For prudent landlords, the takeaway is simple. The landscape is moving against contrived schemes. Aligning your strategy with genuine use, transparent reliefs and long term asset performance is far safer than betting on a loophole that could close suddenly.
Snail Farm Business Rates Loophole FAQs
Are Snail Farm Business Rates Loopholes in the UK?
There is no specific law that mentions snail farms, but schemes that exist purely to avoid business rates rather than to run a genuine agricultural business are increasingly being treated as abusive. Where councils and courts conclude that a snail farm arrangement is a sham, they can deny relief and pursue the property owner for unpaid business rates.
Can a genuine snail farm claim agricultural business rates relief?
Yes, in principle a genuine agricultural business can qualify, provided the building is genuinely and primarily used for agricultural purposes and meets the relevant criteria. The problem in recent cases has been that alleged snail farms were set up in unsuitable city centre offices with tiny numbers of snails and no realistic prospect of commercial production, which undermined any claim to be genuine farms.
What should I do if I have been approached by a snail farm mitigation company?
Treat any offer to reduce business rates via exotic or secretive schemes with extreme caution. Before signing anything, take independent professional advice on your position, including the potential for backdated liability and reputational risk. In many cases it will be more cost effective and less risky to explore straightforward reliefs, occupancy strategies and asset improvements instead of entering into an arrangement that could later be challenged.
Snail Farm Business Rates Loophole