Pipes and pipelines
Source: gov.uk (2025-04-28)

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This Rating Manual section applies to Pipes and Pipelines. It describes:

extent of rateability

unit of assessment considerations

valuation considerations

2. List Description and Special Category Code

The Special Category Code is 212(V).

Where pipelines form part of a “mineral field” (as described below) and are thus the responsibility of the Mineral Valuer the suffix will be “M”.

The usual Rating List description will be “Pipeline(s) and appurtenances”

Where a rateable pipeline forms part of another hereditament the List description should always include the word “pipeline(s).”

3. Responsible Teams

All rateable pipelines will be valued by the pipeline valuer working within the National Valuation Unit Industrial and Crown team.

Since the Local Government and Rating Act 1997 introduced the rateability of Crown property, Crown pipelines are also the responsibility of the NVU Pipeline Valuer.

There is however one exception to the above:

Pipelines associated with onshore Oil and Gas Fields and connecting the wellhead site to the gathering station.

The Mineral Valuer will assume responsibility for the valuation and maintenance of these assessments (in liaison with the NVU I & C Valuer).

It should however be noted that the NVU Valuer will deal with pipelines from gathering stations to refineries, rail-head depots or other disposal points.

This applies for separately rated pipelines and those which form part of a larger hereditament.

4. Co-ordination

As all pipelines are dealt with by NVU I & C co-ordination will be within the team.

NVU I & C will also liaise with the Mineral Valuer in relation to mineral field pipelines.

Co-ordination will be achieved by applying a common and consistent contactor’s basis approach to all rateable pipelines.

5. Legal Framework

5.1 Rateability

5.1.1 General

Pipelines are rateable to the extent described in Class 3(g) of the The Valuation for Rating (Plant and Machinery) Regulations 2000.

“A pipe-line, that is to say, a pipe or system of pipes for the conveyance of any thing, not being-

a drain or sewer; or

a pipe-line which forms part of the equipment of, and is wholly situated within relevant premises;”

5.1.2 Drain or Sewer

The 2000 Plant & Machinery Regulations do not define a drain or a sewer , but for the purposes of the LGFA 88 Schedule 5 , para 13(1), no sewer, as defined by section 343, Public Health Act 1936, or accessory belonging to such a sewer, shall be liable to be rated. The Public Health Act 1936 defines a sewer as, “does not include a drain as defined in this section but, save as aforesaid, includes all sewers and drains used for the drainage of buildings and yards appurtenant to buildings.” A drain by the same Act is defined as “a drain used for the drainage of one building or of any buildings or yards appurtenant to buildings within the same curtilage.”

5.1.3 “wholly situated within relevant premises;”

In its simplest terms this means that:

Pipelines situated within premises not qualifying as “relevant” will be rateable.

Pipelines situated wholly within “relevant premises” eg a “factory” will not be rateable.

Pipelines situated outside of relevant premises will be rateable.

“Relevant premises” is defined within the 2000 Plant and Machinery Regulations in Class 3 (g) as “a factory or petroleum storage depot, a mine, quarry or mineral field or a natural gas storage or processing facility or gas holder site, and for this purpose-

“factory” has the same meaning as in the Factories Act 1961

At sec 175 of the Factories Act 1961 the expression “factory” is defined.

“175.-(1) Subject to the provisions of this section , the expression “factory” means any premises in which , or within the close or curtilage or precincts of which , persons are employed in manual labour in any process for or incidental to any of the following purpose, namely:-

the making of any article or of part of any article;

or

the altering, repairing, ornamenting, finishing, cleaning, or washing or the breaking up or demolition of any article; or

the adapting for sale of any article;

the slaughtering of cattle, sheep, swine, goats horses, asses or mules; or

the …..

being premises in which or within the close or curtilage or precincts of which, the work is carried on by way of trade or for purposes of gain and to or over which the employer of the persons employed therein has the right of access or control .”

If the pipe or system of pipes satisfies the relevant premises provisions then the pipework is exempt.

5.1.4 Where the pipeline lies partly within and partly outside relevant premises

Class 3 (g) …

“A pipe, that is to say, a pipe or system of pipes for the conveyance of any thing, together with any relevant equipment occupied with the pipe-line; and where a pipe-line forms part of the equipment of, and is situated partly within and partly outside, relevant premises, excluding-

(aa) in the case of a pipe-line for the conveyance of any thing to the premises , so much of the pipe-line as extends from the first control valve on the premises ;and

(bb) in the case of a pipe-line for the conveyance of any thing away from the premises, so much of the pipe-line as extends up to the last control valve on the premises; but not excluding so much of the pipe-line as comprises the first or, as the case may be last, control valve;”

In simple language a pipeline is rateable from the last control valve within the fence line of the exporting property up to and including the first control valve within the fence line of the receiving property.

The question of whether a pipeline lies within or outside relevant premises is examined below.

5.1.5 Wholly situated within a premises or not?

The issue of pipes forming part of the equipment of and wholly situate within a factory or petroleum storage depot has been considered in several cases including Air Products Ltd v Case (VO) 1970 LT RA 50. Here two pipelines in a factory manufacturing oxygen and nitrogen used to convey these gases under pressure to a directly adjoining chemical factory where they were used in its manufacturing process, and a pipe conveying carbon dioxide from the chemical factory to the first factory for liquefaction etc before sale, were held to form part of the equipment of the first factory in which they were wholly situate and to be used for the purposes of or incidental to the manufacturing process carried on in it. As such they were held not rateable under Class 5.

In Russell (VO) v Shell Mex & BP Ltd 1972 LT RA 65 pipelines 1,255 yards long along a 25ft pipe track which connected two oil storage premises, the second containing 13 oil storage tanks receiving oil and steam for heating from the first, the whole being assessed as one hereditament were held to be “wholly situate within” a single oil storage depot and so not to be rateable as pipelines under Class 5, it being found that the second could not operate without the first.

However in Petrofina (Gt Britain) Ltd v Harrington (VO) and Hurst (VO) v Shell-Mex & BP Ltd 1973 LT RA 65 (two cases which were heard together) the decision went the other way. In those cases there were petroleum storage depots with storage tanks and ancillary buildings together with pipelines of various lengths which ran from the storage compounds to an adjoining jetty or dock. In one case the jetty was 200 yards away and in the other the dock was at its nearest 35 yards away although the maximum single length run of pipe was 386 yards. The tribunal held that the pipes were part of the equipment of the depot but were not wholly situated within it. As such they were not excluded from rateability under Class 5.

In Edwards (VO) v BP Refinery (Llandarcy) Ltd 1974 LT RA 1 the Tribunal indicated that the general principles laid down in the Petrofina case were those to be applied in normal circumstances when consideration is given to petroleum storage depots and oil refineries. They considered the circumstances in the Russell case to be wholly exceptional and indicated that if there was any inconsistency in the two decisions they preferred to follow the Petrofina case. It followed that in the judgement of the Tribunal in the Edwards case that all the pipelines which were outside the security fences of the different parcels of land, being not wholly situate within a factory, did not qualify for exclusion from rating under Class 5.

It should be noted that to qualify for exemption the pipe must be both within the named premises and part of the equipment of those premises.

It should also be noted that a pipe partly within and partly outside the named premises will be wholly rateable, i.e. both inside and outside the premises, if it is not part of the equipment of those premises.

5.1.6 What is “relevant equipment”?

The provision contained in the Plant & Machinery Regs 2000 at Class 3 (g) is worded thus;

“A pipe-line, that is to say, a pipe or system of pipes for the conveyance of any thing …. together with any relevant equipment occupied with the pipe-line.”

The provision “relevant equipment” is defined in the Plant and Machinery Regulations 2000 in Class 3 (g).

“relevant equipment” means–

i.foundations, supports, settings, chambers, manholes, pipe gantries, pipe bridges, conduits, pits and ducts;

ii.valves and flow regulators;

iii.meters, pumps and air compressors (including the motors comprised in any such equipment), and

iv.apparatus for affording cathodic protection to a pipe or system of pipes;

5.2 Extent of Hereditament

The measure of rateability of a pipeline hereditament will therefore comprise the following:

a. the land including wayleaves occupied for the purposes of the pipeline;

b. appurtenant buildings and works (not being plant);

c. 3 (g) “any relevant equipment occupied with the pipeline” see 5.1.6 above.

d. the pipe itself under Class 3 (g) .

e. (e) any other plant and machinery under Classes 1–4 of the P & M Regs.

5.3 Rateability of pipes other than under Class 3(g)

Pipework may also be considered for rating within The Valuation for Rating (Plant and Machinery) Regulations 2000 under:

Class 1 (see List of Accessories)

Class 2 services to the hereditament. Pipework is rateable where it is used in connection with services to the hereditament, for example air management or heating. The pipework would be valued, as part of the hereditament and the appropriate RM for that category of property should made reference to.

Classes 3(d) and (f)

5.4 Pipelines and the Mines and Quarries Act 1954

Since the passing of the Pipelines Act 1962 there have been several cases heard before Lands Tribunal involving pipelines associated with mineral extraction. Whilst the case law outlined in this section is derived from pre 1989 P&M regulations it is considered equally applicable for the 2000 Regs.

The first of these was English Clays Lovering Pochin & Co Ltd and Another v Davis (VO) 1966 LT RA 475. Here the Tribunal held that no part of the pipelines was rateable although the land in which they lay was rateable. They held that in effect the pipelines and dries formed part of the quarries within the meaning of section 180 of the Mines and Quarries Act 1954, and that the pipes were therefore part of the equipment of the quarries and thus fell to be excluded from the assessment under the provisions of Class 5.

In Rugby Portland Cement Co Ltd v Hunt (VO) 1969 LT RA 496 however a pipeline conveying chalk slurry a distance of 57 miles from a chalk quarry to the cement works was held to be rateable since the processes of the slurrying plant at the quarry and the pipelines were part of the manufacturing operations of the cement works and the pipelines were therefore not part of the quarry under s180(3) proviso of the Mines and Quarries Act 1954.

In a further case involving English Clays - English Clays Lovering Pochin & Co Ltd v Bowles (VO) and Others 1974 LT RA 129 it was accepted by all parties that some 13 lengths of pipelines for the transportation of liquid slurry used in the manufacture of china clay (and some of water) 110.5 miles in total length were not rateable under Class 5 being part of the equipment of and wholly situated within the quarries. The point at issue was whether the cost of digging the trench and making good the surface of the land should be reflected in the rent in addition to the wayleave payment. The Tribunal found in favour of the ratepayers indicating that even if it were true that the landlord is deemed to have provided the trench and then filled it in again after the laying of the pipe, in such a case any monies paid to the landlord would not properly be regarded as rent (and therefore not part of the value of the hereditament), but rather as payment to a contractor. The correct basis of valuation was therefore found to be the “wayleave” basis.

Strictly these cases are only relevant to pipelines associated with mines or quarries.

5.5 Mineral Field Pipelines

In Ottewell v BP (1995 RA 22) it was held that the pipelines connecting between the various oil wells were part of the “mineral field”. This meant they were “part of the equipment of, and…wholly situated within relevant premises” and therefore not rateable.

5.6 Unit of Assessment

In the Petrofina case detailed above, in addition to asking the Lands Tribunal to determine the pipelines as rateable, the VO asked that the pipelines should be separately assessed. The LT determined that the pipelines should be rated with the petroleum storage depots by reason of the interdependence that existed between the depots and the pipelines.

Because the pipelines in those cases were of short length VOA policy from then onwards was that pipelines extending more than 200 yards from premises should continue to be separately rated. This was on the basis that:

by nature and layout pipelines are a different unit of property

pipelines are used for a different purpose (transportation rather than manufacture)

That practice continued for many years but recent LT decisions have served to alter that position.

Coventry and Solihull v Russell (1997 LT RA 89)

A short length of pipeline taking steam from a power plant to a nearby works.

The VO argued that the pipeline was used for a “wholly different purpose” to the power plant.

The LT determined that the raising of steam and the delivery of it via pipelines was not “wholly different” and merged the pipeline with the contiguous waste disposal facility.

Slough Heat and Power (RA/xx-xxxx-xxxx)

The VO argued that a 1,327m long oil pipeline (unused for 4 years) to a multi fuel power station should remain a separate hereditament.

The LT held: The pipeline was contiguous to the power station.

The pipeline was not used for a “wholly different purpose”.

As a matter of law, the fact that the pipeline was not essential to the power station, was not part of the test.

Merged hereditament.

Jamieson v Eon (RA/472011)

A gas fired power station and connected 12km gas pipeline.

The VO argued that by reason of length, nature and layout the pipeline formed a different unit of property to the power station.

The UT(LC) determined that because the pipeline and power station were so essential to each other the hereditaments should be merged.

Consequently where a pipeline is in the same occupation and contiguous to its associated property the two should be rated as one hereditament provided they are essential to each other.

It is important to note that merger with “relevant premises” will not necessarily make the pipeline itself part of the relevant premises and the pipeline will remain rateable to the extent to which it lies outside of those premises. It is self-evident that a pipeline is not part of eg a “factory” or “petroleum storage depot” [although a pipeline can be part of a “quarry” by virtue of the definition of a quarry in the Mines and Quarries Act 1954.]

The position where remote premises are connected by a pipeline is less clear. Whilst the words were obiter, the LT in the Edwards v Llandarcy case were quite clear that an oil refinery and tank farm situated 2 miles away could not be considered part of the same hereditament by reason of connection by pipelines. Consequently VOA policy in this situation is that separate hereditaments exist for each of the remote premises and the pipeline (3). Any such case in which merger is requested must be referred to the NVU I & C pipeline valuer.

5.7 Long Distance Pipelines – Central Rating Lists

For the Rating Lists 2000 onwards, the regulations are The Central Rating List (England) Regulations 2000 and The Central Rating List (Wales) Regulations 1999.

A long distance pipeline will qualify for inclusion in the Central Rating Lists where:

it is more than 16km long

it is located in two or more BA areas

the occupier is a “designated person”

**Designated Person **

The powers of designation available to the Secretary of State in relation to prescribed hereditaments under Section 53 of the Local Government Finance Act 1988 (LGFA) as amended by Schedule 5 of the Local Government and Housing Act 1989 (LGHA) extend to the designation of “a person”. For the purposes of this legislation it should be noted that a company is a “person” whereas a business name is not.

It should be appreciated that whereas for the purposes of the Local Rating Lists the name of the occupier is not essential, it is imperative for the purposes of the Central List that the designated person is correctly identified. To this end it is recommended that the precise name of the occupier should therefore be sought and confirmed in writing.

Since the Secretary of State is in most cases unable to designate a new person for the Central List retrospectively the list entry can usually only take effect from the date any designating regulations came into force. In these circumstances it is considered inappropriate to make any new Central List designations in respect of pipelines until such time as new Lists are compiled. It follows therefore that any pipeline in the occupation of any person other than a “person” designated in the Schedule to the relevant Central Rating List Regulations will become the subject of an entry in the Local Rating Lists.

The exception to this general rule occurs when a cross-country pipeline, currently the subject of a central list entry, is transferred into the occupation of another person not designated by the Regulations. In these circumstances the Secretary of State may designate the new occupier retrospectively (Local Government Finance Act 1988 Section 53 (4) & (4A)), thus avoiding a situation where the pipeline would otherwise move from the Central Rating List to the local rating list and then back again at a later date.

6. Survey Requirements

The facts set out below should be ascertained when a pipe or pipeline is being referenced:

a. the diameter, wall thickness, working pressure, material of fabrication and specification of the pipe together with the manufacturer’s trade name where available. It should be noted that most steel pipes are manufactured to American Petroleum Institute Standards and are so designated eg API 5LX 42

b. the method of jointing the pipe sections

c. any protective coating applied to the internal or external surfaces of the pipe. In the case of an external wrapping it should be ascertained whether the wrapping is merely for anti-corrosion purposes or whether it has an insulating value. Linings, wrappings and laggings will all be rateable. It is most unusual for a below-ground steel pipe not to be wrapped or coated. Above-ground pipes are often painted

d. the presence of pipe supports, either above or below ground

e. the presence of any special engineering works such as pipe-bridges or pipe-tunnels to overcome geographical obstacles. A description of such works must be undertaken to provide sufficient detail to allow estimates of capital costs to be made

f. the type of material which passes through the pipe and, in connection with liquids, whether any blending process occurs in the pipeline at any point

g. the presence of control valves, cleaning points, block valve stations, pigging facilities or pumping stations along the line or any other feature which would be of material significance from a valuation point of view

h. if the pipe is underground the depth at which it is laid

i.is the pipe heated? - usually by electric cable or steam trace pipe - and any special form of insulation used in connection therewith. A heated or heavily insulated pipe is usually required when the material conveyed is heavy oil. For economic reasons such material has to be kept warm to facilitate movement

j. the presence of any form of anti-corrosive protection such as cathodic equipment should be noted

k. position and/or nature of the terminal points of the pipe or pipeline (normally the last control valve within the fence line of the exporting property and the first control valve within the fence line of the receiving property) together with the length between the terminal points. Where part lies above and part lies below ground the individual lengths should be noted. In the event of any doubt as to whether the pipeline forms “part of the equipment of” a factory etc. the lengths of any doubtful sections should be separately noted

l. the amount paid for the wayleave through or over the land where the pipeline is laid, either in the form of a capital or annual payment

m. location of the pipe should be plotted on a suitable scale map. It is of course often possible to obtain from the occupier copies of the ‘as built’ pipeline to a suitable scale

n. type of terrain crossed by the pipeline, e.g. arable or pasture, moorland, industrial estate etc. In the event of considerable variation in terrain type an approximate apportionment of the total length between the various types should be determined. It would also be helpful to include a reference to the nature of the strata encountered in the excavation as evidence by visual inspection or by the contents of a geological or Mineral Valuer’s report where available

o. detailed costs of the pipeline project where obtainable. In the absence of detailed costs the total cost of the pipeline are often published in the technical press, local newspapers etc.

p. details of the occupier’s address, in order that a Form of Return can be sent by the NVU I & C Pipeline Valuer to obtain construction cost details

q. a copy of the “environmental statement”, if available

r. the design throughput and likely actual throughput when first in use

7. Survey Capture

The survey will be held by the NVU I & C team.

Valuation critical data will be entered onto a pipeline specific spreadsheet held by the NVU I & C team.

8. Valuation Approach

No evidence of rack rents relating to pipelines is available.

It is highly unlikely that reliable accounts information will be available for a pipeline as a separate entity. Therefore the receipts and expenditure method is unlikely to be of assistance.

Therefore pipeline hereditaments should be valued by the Contractor’s Basis method,

Costs for the various aspects of pipelining are held within the Rating Cost Guide (RCG).

Valuation responsibility lies with the pipeline valuer of the NVU I & C team whether the pipeline is a separate hereditament or part of a larger hereditament.

Each pipeline valuation will be held on a pipeline specific spreadsheet. Entering valuation critical survey data on the spreadsheet will result in automatic linkage to the RCG and allowance scales for valuation.

9. Valuation Support

Valuation of pipelines is the responsibility of the pipeline valuer in the NVU I & C team.

All queries relating to pipeline valuation should be directed to the NVU Inbox.

Practice note: 2023 - pipes and pipelines

1. Market Appraisal

1.1 Pipelines are generally built for a very specific purpose and of course have only single defined start and finish points. As a consequence of this there is no “market” for pipelines in the sense that one exists for types of hereditament which are commonly let, like shops, offices and warehouses.

1.2 There has been very limited pipeline building in recent years. That which has occurred has been mainly in the utilities industries.

1.3 Some pipelines are used for backup purposes (where the operator’s normal method of transportation is not available), whilst others are in constant operation. Usage often varies in line with general levels of activity in the industry which the pipeline has been constructed to serve.

2. Changes from the last Practice Note

2.1 There have been no substantive changes from the 2017 Practice Note.

3. Ratepayer Discussions

3.1 Discussions have now concluded for the 2023 Rating Lists, and again these have resulted in a Memorandum of Agreement (MOA) which has been signed by industry representatives.

4. Valuation Scheme

4.1 The details of the valuation scheme for this class – which adopts the Contractor’s Basis (CB) - is set out in the MOA referred to in para 3.1 above. All valuations are carried out by a small group of specialists within the National Valuation Unit’s Industrial, Commercial and Crown team – any queries should be raised with them via the prescribed channel.

Practice note 1: 2017 - pipes and pipelines

1. Market Appraisal

Pipelines are almost exclusively used for a particular purpose and of course have only single defined start and finish points. Therefore there is no “market” for pipelines.

A pipeline will be built for a specific purpose as and when required.

There has been very limited pipeline building in recent years. That which has occurred has been mainly in the utilities industries. For example, reinforcement of the national gas and water pipeline networks.

2. Changes from the last Practice Note

No material changes from the 2010 Practice Note.

3. Ratepayer Discussions

A memorandum of agreement was achieved for the 2010 Rating Lists.

Discussions are planned with the aim of achieving a MOA for 2017.

The discussions will take place in the later part of 2015. The starting point will be cost information supplied by the ratepayers and the cost guidance contained in the Rating Cost Guide.

4. Valuation Scheme

Pipelines will be valued on a bespoke contractor’s basis spreadsheet which is held by the NVU I & C team.

NVU Industrial and Crown is the only team which will have access to this spreadsheet.

Stage 2 allowances will be in accordance with the scale attached below