Mrs Pearce (Mrs P) had carried on a fishery business for 17 years, having taken over when her husband died. Mr P had built a profitable stocked fishery business, which involved purchasing fish and stocking his part of the river for members to catch. Each fisherman was allowed to take two fish home. However, shortly after Mrs P took over, the Environment Agency became aware of the impact of stocked fisheries on the native fish and refused to renew fish stocking licences. 

The nature of the business therefore changed from being a stocked fishery to the maintaining of a wild fishery. Due to the conservation efforts, members could not use certain hooks and were required to return all fish to the river. The business’ income declined as a result of the changes and made very minimal profits. Members had the use of an outside toilet and car park. Mrs P’s activities included maintaining the land, taking and managing bookings and greeting customers with a drink.

However, the tribunal found that the non-investment activities were not of sufficient significance to tip the balance of the business overall from an investment business to a non-investment business. It was noted that had the business provided services such as tuition in fishing, ghillies to guide the rods, if it had sold or hired equipment or provided catering or a bar the outcome might have been different. In this case, the business had become one of mainly holding land as an investment, by collecting fees from fishermen and maintaining the land. This case highlights the need to regularly review business activities as, despite the taxpayer working very hard in a long established business, the change in responsibilities meant that valuable business relief was not available.