Council cracks down on snail farm business rates avoidance schemes

The city council said it had raided two buildings in the West End to find sealed boxes purportedly containing snails.

It described the so-called snail farms as an "ongoing issue" and as attempts to avoid paying business rates (NNDR) by claiming that a commercial property is a farm and therefore exempt from business rates as a "fish farm / agricultural use" property.

There is a business rate exemption in rating law for properties occupied as an agricultural building or a fish farm.

A council statement on the raids said: "While in reality organisers of the scam know that the Valuation Office (central government agency) will never grant an agricultural business rate exemption, the council is forced to go through the legal hoops of winding up the shell company which is occupying the office space.

"As the council must hold the occupier of a property as liable for business rates, the landlord does not have to pay any business rates and therefore can be considered as complicit in this arrangement."

The council said it has wound up four' snail companies' for non-payment of business rates, and is now seeking to wind up a further two companies.

It has also called on the Government's Insolvency Service to investigate whether a director of the companies should be disqualified from being a director in the future.

Cllr Adam Hug, leader of Westminster City Council, said: "This latest raid vividly illustrates an issue of business rates avoidance based on the ludicrous notion of snail farms, which we have raised with central government before.

"In the last fortnight we have discovered more boxes of snails in empty office buildings in Westminster so there is little sign of this racket slowing up.

"Rather than unscrupulous traders dropping on one avoidance scheme after another, it would be good to see a general clause on business rates avoidance and evasion which stops these kinds of activities in their tracks. As a local authority with limited resources, we enforce wherever we can. We will be on the trail of the snail racketeers or anyone else who thinks they can cheat the taxpayer."

Adam Carey