HMRC: Builders' Merchants Property Valuation Guidance

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version. 1.1 Builders’ Merchants ( BMs ) are a large, distinct category of property which were data captured separately from general industrial properties for the first time for the 2010 Revaluation. 1.2 It has been recognised that many BMs should be ring-fenced from general industrials, principally because the rental evidence suggests there is a premium attached to such properties. 1.3 Whilst traditionally used almost exclusively by the building trade, in recent years they have been used increasingly by the general public as well, attracted by the lower prices than at DIY Retail Warehouses, albeit in more robust trade-based surroundings. 1.4 BMs usually sell a wide range of products (for example, bricks, aggregates, joinery, PVC, hardware, landscaping products) rather than specialising in one area (for example, timber merchants or wood yards). 1.5 For clarity, timber merchants and wood yards are not strictly part of this exercise as most will be primarily land bulk class with ancillary buildings or alternatively W Bulk Class with inferior quality open woodcutting/storage buildings with any land element recorded as Other Additions. That said, properties classified as BMs can include some that are occupied by timber merchants. Primary Description Code: IX List description: Builders Merchants and Premises SCAT code: 738 SCAT suffix G Primary Description Code: CW List description: Trade Warehouse and Premises SCAT code: 096 SCAT suffix G 3.1 The valuation and referencing of this class of property is the responsibility of the Regional Valuation Units ( RVUs ). 3.2 The Class Co-ordination Team ( CCT ) will be available to give advice. The CCT and the Industrial Valuation Panel have responsibility for this class ensuring effective co-ordination across the business units. The team are responsible for the approach to and accuracy and consistency of BMs . The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating list. Caseworkers 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 Planning authorities take differing views on whether the category falls within Use Class B8 or should be treated as sui generis. This appears to depend on the proportion of retail use and the likelihood of regular access to the hereditament by members of the public; the more regular the public access, the more likely it is to be treated as sui generis. The basis of measurement for this class is Gross Internal Area. Reference should be made to the Code of Measuring Practice for Rating Purposes in England and Wales. 7.1 All Units should follow the following guidance on National Sub-locations, Referencing and Data Capture, with regard to BMs in their area. 7.2 Once identified, the following national sub-locations should be adopted for all BMs which have a premium above the value of general industrial properties, in order to improve co-ordination: BLD1 — BMs in key main road locations with good access and prominence — there is likely to be a significant retail element, part to a showroom standard. Likely to be in an urban location and may be out of the most congested town and city centres, to enable easy access for large vehicles. The area of land is likely to be in excess of the area of the enclosed buildings and, for some, may be close to the ideal 70%/30% land/buildings split. Some of the land may have access to the general public consequently enhancing its value. BLD2 — BMs in less prominent positions than BLD1s in the following locations: For both BLD1 and BLD2 sublocations, the area of land is likely to be in excess of the area of the enclosed buildings, but this does not preclude BMs being in buildings which are larger