Changes To Business Rates From 1 April 2017
The Government announced in the 2016 Autumn Statement a further package of business rates measures:
Rural Rate Relief
The Autumn Statement confirmed that the Government will double rural rate relief to 100% from 1 April 2017. The Government intends to amend the relevant primary legislation to require local authorities to grant 100% mandatory rural rate relief.
However, before the requirement to grant mandatory relief comes into force local authorities may use their local discount powers to grant 100% rural rate relief to eligible ratepayers from 1 April 2017.
Rate Relief on Telecom Fibre Optics
The Government will provide a new 100% business rates relief for new full-fibre infrastructure for a five year period from 1 April 2017 to support the rollout of new full-fibre broadband infrastructure and future 5G communications to homes and businesses.
The necessary changes to primary legislation will be introduced as soon as that is possible and it is anticipated that this will enable the relief to be backdated to April 2017. Therefore, no action is required yet by local authorities until the changes are made. The Department for Communities and Local Government (DCLG) and the Valuation Office Agency will work with the telecoms sector and local government on implementing the relief and will publish guidance on how it will operate in due course.
2017 Revaluation and Transitional Relief
The Government has published the transitional relief scheme for the 2017 revaluation and the associated regulations. It is important to provide the greatest support to small and medium businesses seeing increases and to also allow those small and medium businesses seeing reductions to gain quickly from the revaluation.
Small Business Rate Relief
In the Budget 2016, the Government confirmed that the doubling of the Small Business Rate Relief (SBRR) from 50% to 100% will be made permanent from 1 April 2017. The £6,000 and £12,000 thresholds will increase to £12,000 and £15,000 respectively. Therefore, properties with rateable values of £12,000 or below that meet the eligibility criteria will receive 100% relief and those businesses with rateable values between £12,001 and £14,999 will receive tapered relief. The taper will operate as at present – with 100% relief for eligible hereditaments with an RV of £12,000 or below, decreasing to 0% relief for hereditaments with an RV of £15,000 or above.
The threshold for the standard business rates multiplier will also increase from a rateable value of £18,000 (£25,500 in London) to £51,000.
The Chancellor announced at the Budget that the Government will introduce a £1,500 business rates discount for office space occupied by local newspapers, up to a maximum of one discount per local newspaper title and per hereditament, and up to state aid limits, for 2 years from 1 April 2017. The relief will be delivered through local authority discretionary discount powers under section 47(3) of the Local Government Finance Act 1988.
The Government intends to introduce the necessary legislation to enable local authorities to use their existing discretionary relief powers to support publicly owned public toilets from 1 April 2018.
From 1 April 2017, authorities will no longer be required to provide individual copies of explanatory notes when bills are issued. Instead, authorities will be required to publish explanatory notes online, based on model explanatory notes provided by DCLG. The Government intends to make the necessary amendments to the relevant regulations to implement this change for April 2017.
Changes To Business Rates From 1 April 2015
The Government announced in the 2014 Autumn Statement a package of business rates measures:
- Doubling Small Business Rate Relief for a further year (2015-16);
- A 2% cap on the inflation increase for 2015-16 (September’s RPI, by which bills were due to increase, was 2.3%);
- Increasing the temporary £1,000 discount for shops, pubs and restaurants to £1,500 with rateable values below £50,000 for 2015-16;
- To extend in effect the existing transitional relief scheme for two years for properties with a rateable value up to and including £50,000. As a result of this measure, small properties (with a rateable value of less than £18,000/£25,500 in London) that would otherwise face bill increases above 15% and medium sized properties (with a rateable value of £50,000 or less) that would otherwise face bill increases above 25% will benefit. This will be delivered using Localism Act discounts on which the Department will publish guidance shortly. This measure will not affect those ratepayers in transition to lower bills whose scheme will end on 31 March 2015; and
- Business rates appeals: backdating – the government will change the rules so that alterations to rateable values can only be backdated to the period between 1 April 2010 and 1 April 2015 for Valuation Office Agency alterations made before 1 April 2016 and ratepayers’ appeals made before 1 April 2015.
Changes to business rates from 1 April 2014
In its autumn statement on 5 December 2013, the government announced the following changes to business rates which came into effect from 1 April 2014:
- The annual increase on business rates, normally linked to the Retail Price Index was capped at 2 per cent;
- Allow businesses to pay their business rates over 12 monthly instalments, from April to March;
- Extended the doubling of small business rate relief for a further 12 months from 1 April 2014 to 31 March 2015. Ratepayers receiving small business rate relief that take on an additional property, which would currently disqualify them from receiving relief, will continue to receive their existing relief for 12 months;
Partly Occupied Property Relief
A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time, the local authority has discretion in certain cases to award relief in respect of the unoccupied part. Full details can be obtained from the local authority.
Small Business Rate Relief
Following the latest announcement by the Chancellor of the Exchequer, with effect from 1st April 2016, the temporary increase in Small Business Rate Relief is extended until 31st March 2017.
From 2017-18, Small Business Rate Relief (SBRR) will permanently double from 50% to 100%. The £6,000 and £12,000 thresholds will increase to £12,000 and £15,000 respectively. Therefore, those with rateable values below £12,000 that meet the eligibility criteria will receive 100% relief and those with rateable values between £12,000 and £15,000 will receive tapered relief.
With effect from 1 April 2012 previous applicants who failed to meet the criteria due to occupation of ‘multiple’ assessments, have had the lower multiplier automatically applied to their accounts, following a change to the legislation.
The measure doubles the usual rate of relief so that ratepayers with rateable values below £6,000 pay no rates at all for the period, while ratepayers with rateable values between £6,000 and not more than £12,000 receive tapered relief from 100% – 0%.
There are no other changes to the scheme and the Government has confirmed that it will meet the costs of the increased levels of relief.
The legal requirement for an application form to be submitted was removed with effect from 1 April 2012.
This relief is only available to ratepayers who apply to their local authority and who occupy either—
- One property, or
- One main property and other additional properties providing those additional properties each have a rateable value which does not exceed £2,599.
The rateable value of the property mentioned in (a), or the aggregate rateable value of all properties mentioned in (b), must not exceed £17,999 outside London or £25,499 in London on every day for which relief is being sought. If the rateable value, or aggregate rateable value, increases above those levels, relief will cease from the day of the increase.
Changes to the qualifying criteria have changed in 2015. The extension of the doubling of small business rate relief for a further 12 months from 1 April 2015 to 31 March 2016 has been approved. In addition to this, Ratepayers receiving small business rate relief that take on an additional property after 14 February 2014, which previously would have disqualified them from receiving relief, will continue to receive their existing relief for 12 months.
Small Business Rate Relief prior to 1 October 2010
Ratepayers who satisfy these conditions will have the bill for their sole or main property calculated using the lower small business non-domestic rating multiplier rather than the national non-domestic rating multiplier that is used to calculate the liability of other businesses. In addition, if the sole or main property is shown on the rating list with a rateable value which does not exceed £12,000, the ratepayer will receive a percentage reduction in their rates bill for this property of up to a maximum of 50% for a property with a rateable value of not more than £6,000.
If an application for relief is granted, providing the ratepayer continues to satisfy the conditions for relief, which apply at the relevant time as regards the property and the ratepayer, they will not need to re-apply for relief in each new valuation period. Certain changes in circumstances will need to be notified to the local authority by the ratepayer (other changes will be picked up by the local authority).
The changes which must be notified are:
- The ratepayer taking up occupation of a property they did not occupy at the time of making their application for relief, and
- An increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the local authority which granted the relief.
Notification of these changes must be given to the local authority within 4 weeks of the day after which the change happened. If this happens, there will be no interruption to the ratepayer’s entitlement to the relief. A notification that the ratepayer has taken up occupation of an additional property must be by way of a fresh application for relief; notice of an increase in rateable value must be given in writing.
Full details on the eligibility criteria and on how to apply for this relief are available from the local authority.
Charity and Community Amateur Sports Club Relief
Charities and Registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the Charity or CASC and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the CASC (or of that and other CASCs).
The local authority has discretion to give further relief on the remaining bill. Full details can be obtained from the local authority and the application form is available by clicking on the link below.
Non-Profit Making Organisation Relief
The local authority has discretion to give relief to Non-Profit Making Organisations. Full details can be obtained from the local authority. The Application Form is the same as the one above under Charity and Community Amateur Sports Club Relief.
Local Discount and Hardship Relief
The local authority has discretion to give relief in special circumstances. Full details can be obtained from the local authority.
Rate Relief for Businesses in Rural Areas
Certain types of properties in a rural settlement with a population below 3,000 may be entitled to relief. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500, or the only public house or the only petrol station and have a rateable value of less than £12,500. The property has to be occupied.
An eligible ratepayer is entitled to relief at 50% of the full charge whilst the local authority also has discretion to give further relief on the remaining bill. In addition, the local authority can give relief on certain other occupied property in a rural settlement where the rateable value is less than £16,500. Full details can be obtained from the local authority.