Business Rates information

NOTICE: BUSINESS RATES AND CORONVIRUS (COVID 19)

Following on from the budget announcements, the Chancellor gave a further update on 17 March 2020. This was where the current relief arrangements for certain types of businesses were announced.

  • 100% Rate Relief to eligible businesses including shops, cinemas, hotels, theatres, restaurants. As well as any other business in the retail, hospitality or leisure sector.
  • To support these businesses the Government will also provide grant funding of up to £25,000 to help meet their on-going business costs. This should impact 700,000 businesses nationally and will be distributed to Local Authorities.
  • Where a business receives Small business rate relief and does not fall into one of the categories detailed above, grants of up to £10,000 will be available to support these businesses
  • The £1,500 discount for local newspapers will be extended for another five years to March 2025.
  • Nursery schools which are not operated by local authorities will pay no business rates in 2020/21 from 1 April.
  • The Government will bring forward legislation to provide mandatory 100% business rate relief for stand-alone public lavatories in England from April 2020.
  • £11.5m will be invested into the Valuation Office Agency (VOA) to support the modernisation of VOA systems.
  • The Government has committed to a fundamental review of the business rates system, of which the result will be reported in the autumn.

Unfortunately, this announcement has been made after the 2020/21 bills have been printed. Which means the changes to legislation will not be reflected in these bills which are dated 9 March 2020.

We have received Government Guidance about the expanded retail relief. We are now working on identifying accounts to award the relief and send recalculated bills, which will be issued as soon as possible. Where any adjustments result in an account going into credit, a refund will be issued as soon as possible.

We also await government guidance about the grant funding, which we expect to receive early next week.

As we receive more information we will update this page, so please check this website for further updates.

 

Non-Domestic Rates

Non-Domestic Rates, or business rates, collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services. Under the business rates retention arrangements introduced from 1st April 2013, authorities keep a proportion of the business rates paid locally. This provides a direct financial incentive for authorities to work with local businesses to create a favourable local environment for growth since authorities will benefit from growth in business rates revenues. The money, together with revenue from council tax payers and certain other sums, is used to pay for the services provided by local authorities in your area. Further information about the business rates system, including transitional and other reliefs, may be obtained at www.gov.uk.

 

Rateable Value

Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the valuation officers of the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs. They draw up and maintain a full list of all rateable values, available at www.gov.uk/government/organisations/valuation-office-agency . The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation that came into effect on 1st April 2017, this date was set as 1st April 2015.

The valuation officer may alter the value if circumstances change. The ratepayer (and certain others who have an interest in the property) can request a change to the value shown in the list if they believe it is wrong, through the reformed Check, Challenge, Appeal (CCA) process introduced in April 2017. Full details on the CCA process are available from the VOA or from www.gov.uk . Your billing authority can only backdate any business rates rebate to the date from which any change to the list is to have effect.

Further information about the grounds on which appeals may be made and the process for doing so can be found on the www.gov.uk  website.

 

National Non-Domestic Rating Multiplier

The local authority works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers: the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The former is higher to pay for small business rate relief. Except in the City of London where special arrangements apply, the Government sets the multipliers for each financial year for the whole of England according to formulae set by legislation.

The current multipliers are shown on the front of your bill.

 

Business Rates Instalments

Payment of business rate bills is automatically set on a 10-monthly cycle. However, the Government has put in place regulations that allow businesses to require their local authority to enable payments to be made through 12 monthly instalments. If you wish to take up this offer, you should contact the local authority as soon as possible.

 

Revaluation 2017 and Transitional Arrangements

All rateable values are reassessed at a general revaluation. The most recent revaluation took effect from 1st April 2017. Revaluations make sure each ratepayer pays their fair contribution and no more, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others.

A £3.6 billion transitional relief scheme limits changes in rate bills as a result of the 2017 revaluation. To help pay for the limits on increases in bills, there are also limits on reductions in bills. Under the transitional scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier). The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1st April 2017, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to your bill as a result of other reasons (such as changes to the amount of small business rate relief) are not covered by the transitional arrangements. The transitional arrangements are applied automatically and are shown on the front of your bill. Further information about transitional arrangements and other reliefs may be obtained from The Council of the Isles of Scilly, or the website www.gov.uk/introduction-to-business-rates .

More information on the 2017 revaluation can be found at www.gov.uk/introduction-to-business-rates/revaluation .

 

Unoccupied Property Rating

Business rates will not be payable in the first three months that a property is empty. This is extended to six months in the case of certain industrial properties. After this period rates are payable in full. In most cases the unoccupied property rate is zero for properties owned by charities and community amateur sports clubs. In addition, there are a number of exemptions from the unoccupied property rate. Full details on exemptions can be obtained from your local authority.

 

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

Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to other mandatory relief or are liable for unoccupied property rates) will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.

In addition, generally, if the sole or main property is shown on the rating list with a rateable value which does not exceed £15,000, the ratepayer will receive a percentage reduction in their rates bill for this property of up to a maximum of 100%. For a property with a rateable value of not more than £12,000, the ratepayer will receive a 100% reduction in their rates bill.

Generally, this percentage reduction (relief) is only available to ratepayers who occupy either—

(a) one property, or

(b) one main property and other additional properties providing those additional properties each have a rateable value which does not exceed £2,899.

The aggregate rateable value of all the properties mentioned in (b) must not exceed £19,999 outside London or £27,999 in London on each 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.

The Government has introduced additional support to small businesses. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, the Government has confirmed that they will be allowed to keep that relief for a period of 12 months.

Where a ratepayer meets the eligibility criteria and has not received the relief they should contact their local authority. Provided the ratepayer continues to satisfy the conditions for relief which apply at the relevant time as regards the property and the ratepayer, they will automatically continue to receive relief in each new valuation period.

Certain changes in circumstances will need to be notified to the local authority by a ratepayer who is in receipt of relief (other changes will be picked up by the local authority). The changes which should be notified are—

(a) the ratepayer taking up occupation of an additional property, and

(b) 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.

 

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 the club, 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 club (or of that and other clubs).

The local authority has discretion to give further relief on the remaining bill. Full details can be obtained from the local authority.

 

Relief for Local Newspapers

The Government is providing funding to local authorities so that they can provide a discount worth up to £1,500 a year on office space occupied by local newspapers. This was due to run for 2 years from 1st April 2017. At Autumn Budget 2018, the Government extended the scheme for an additional year (2019/20). This scheme provides up to a maximum of one discount per local newspaper title and per hereditament, and up to state aid limits. The relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Eligibility criteria for this relief is set out in a guidance note: “The case for a business rates relief for local newspapers”, which can be obtained at www.gov.uk/government/consultations/the-case-for-a-business-rates-relief-for-local-newspapers .

 

Spring Budget 2017 Relief Scheme: Discretionary Scheme

Ratepayers losing Small Business or Rural Rate Relief as a result of the 2017 revaluation will have their increases limited to the greater of either (i) a cash value of £600 per year, or (ii) the matching cap on increases for small properties in the transitional relief scheme. This relief will run until the next revaluation in 2021 and ratepayers will receive the relief until this date or they reach what their bill would have been without the relief scheme, whichever is first.

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Further information can be obtained from the local authority.

 

Spring Budget 2017 Relief Scheme: Discretionary Scheme

The Government is providing £300 million of funding to local authorities over 4 years to 31st March 2021 to provide discounts to ratepayers in their area on a discretionary basis. Each authority has been allocated a share with which to design and implement a scheme to deliver targeted support to ratepayers.

Local authority allocations can be found at:

https://www.gov.uk/government/consultations/discretionary-business-rates-relief-scheme

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Further information can be obtained from the local authority.

 

Business Rate Retail Discount

For the financial year 2019/20 a discount of one third of the bill after any other reliefs have been applied will be given to qualifying occupied properties with rateable values of less than £51,000, subject to State Aid De Minimis limits. The properties must be occupied and wholly or mainly used to sell goods, services or food and drink to visiting members of the public.

For the financial year 2020/21 the Government announced that it would extend the value of the Retail Discount from one third of the bill to 50% and to also include cinemas and live music venues. 

Qualifying businesses may include:

Premises used to sell goods to visiting members of the public:

  • Shops (for example florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, hardware stores, newsagents, supermarkets)
  • Charity shops
  • Opticians
  • Post Offices
  • Garden Centres
  • Furnishing shops / display rooms (for example, carpet shops, shops selling double glazing or garage doors)
  • Car / Caravan show rooms
  • Second hand car lots
  • Markets
  • Petrol Stations
  • Art galleries (where art is for sale / hire)

Premises used to sell food and drink to visiting members of the public:

  • Restaurants
  • Takeaways
  • Sandwich shops
  • Coffee shops
  • Pubs
  • Bars

Premises used to provide the following services to visiting members of the public:

  • Hair and beauty services (for example, hairdressers, nail bars, beauty salons, tanning shops, etc.)
  • Shoe repairs / key cutting
  • Travel agents
  • Ticket offices, for example for theatre
  • Dry cleaners
  • Launderettes
  • PC/ TV / domestic appliance repair
  • Funeral directors
  • Photo processing
  • DVD / video rentals
  • Tool hire
  • Car hire

Premises which are being used as cinemas (only applicable for the financial year 2020/21 onwards)

Premises which are being used as live music venue (only applicable for the financial year 2020/21 onwards):

Live music venues are hereditaments wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Hereditaments cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or a theatre,

These lists are not exhaustive and it would be impossible to list the many varied retail uses that exist. We will consider the retail discount for any businesses which are broadly similar to those listed above.

 

Which properties will NOT benefit from Business Rate Retail Discount?

Premises which are not reasonably accessible to visiting members of the Public, or those which are not mainly used for the qualifying purpose will not be eligible for the discount. The following list sets out the types of use which the Government does not consider to be retail use:

  • Financial services (for example, banks, building societies, cash points, bureau de change, payday lenders, betting shops, pawn brokers)
  • Medical services (for example, vets, dentists, doctors, osteopaths, chiropractors)
  • Post Office sorting offices
  • Professional services (for example, solicitors, accountants, insurance agents / financial advisors, tutors)
  • Other services (for example, estate agents, letting agents, employment agencies)

If we decide that the premises are occupied by a business which is broadly similar to those listed above we will not award the discount.

If you have received a bill without any retail discount but think your property should qualify for the discount please contact us using the link at the top of this page and we can send you an application form.

 

Business rates discount for pubs

From 1 April 2020 to 31 March 2021 a Business Rate discount of up to £1,000 is available for eligible pubs with rateable values of up to 100,000.  We have identified pubs that meet the qualifying criteria and will apply the discount to qualifying pubs.  To qualify for the discount the pub must be occupied.  Where pubs are part of a chain the discount is granted subject to State Aid limits.  If you have not received the discount and would like to apply please contact us.  

The discount available is up to state aid de minimis levels for each business, if you have received any financial support from a public or publicly funded body this information must be disclosed on the application form.

As there is no definitive description of a traditional pub or public house which could easily be used to determine eligibility the following guidance has been issued by the Government:

Eligible pubs should:

  • be open to the general public
  • allow free entry other than when occasional entertainment is provided
  • allow drinking without requiring food to be consumed
  • permit drinks to be purchased at a bar

For these purposes it should exclude:

  • restaurants
  • cafes
  • nightclubs
  • hotels
  • snack bars
  • guesthouses
  • boarding houses
  • sporting venues
  • music venues
  • festival sites
  • theatres
  • museums
  • exhibition halls
  • cinemas
  • concert halls
  • casinos

 

Local Discounts

Local authorities have a general power to grant discretionary local discounts. Full details can be obtained from the local authority.

 

State Aid

The award of discounts is considered likely to amount to state aid. However, it will be state aid compliant where it is provided in accordance with the De Minimis Regulations EC 1407/2013. The De Minimis Regulations allow an undertaking to receive up to EUR 200,000 ‘de minimis’ aid over a rolling three-year period. If you are receiving, or have received, any ‘de minimis’ aid granted during the current or two previous financial years (from any source), you should inform the local authority immediately with details of the aid received.

 

Hardship Relief

The local authority has discretion to give hardship relief in specific circumstances. Full details can be obtained from the local authority.

 

Rating advisers

Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. However, ratepayers who do wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors (RICS - website www.rics.org ) and the Institute of Revenues, Rating and Valuation (IRRV - website www.irrv.org.uk ) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct. Before you employ a rating adviser, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance.

 

Information Supplied with Demand Notices

Information relating to the relevant and previous financial years in regard to the gross expenditure of the local authority is available at http://www.scilly.gov.uk/

A hard copy is available on request by writing to the council or by calling

0300 1234 105.