NHM £12m rates ruling throws lifeline to museums
A landmark ruling by the Valuation Tribunal for England has slashed the Natural History Museum’s business rate from £12m a year to just £1 in what could be a ground-breaking decision.
The ruling could offer a vital lifeline to struggling museums as they confront rising costs and dwindling subsidy.
The tribunal accepted a straightforward argument put on behalf of the museum by the employment law specialists Mills and Reeve: a museum that operates at a loss to preserve collections and remain open to the public free of admission fee should not be valued as though it were a profitable commercial property. As no commercial tenant would take on the building on those terms, its rateable value was therefore set at a nominal £1.
“This is another important business rates ruling for the museums sector which is already facing significant headwinds given the wider backdrop and long-term pressure on finances” said Helen Whitehouse, the NHM’s chief operating officer and formerly a senior DCMS civil servant. “This is a positive decision which reflects the economic realities of a museum’s accounts and the common-sense evaluation that we are the only realistic tenant for the building we occupy – this is the case for many, if not all, museums who are charities and/or public bodies like ours.”
This ruling will be seen as a commonsensical clarification that rating should be based on economic reality – a museum is essentially a loss-making operation with a public interface, one that “no commercially motivated person” would undertake, and the building’s rateable value should therefore be nominal.
Richard New of Mills and Reeve said it was agreed that since the museum is essentially loss-making its rateable value must be at the most nominal. “The Natural History Museum’s own accounts clearly demonstrated an inability to trade profitably. This led to the Valuation Tribunal for England reducing the rateable value from £12m to £1.
“As well as being the UK’s most popular visitor attraction in 2025, the Natural History Museum uses its unique collections and expertise to tackle the biggest challenges facing the world today – it’s a hugely valuable asset to the UK. We’re thrilled to have been able to play a role which will have a positive impact on the Natural History Museum and the wider sector” he said.
Image courtesy Ben Harrison Photography