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 1 April 2013, authorities keep a proportion of the business rates paid locally. The money, together with revenue from council taxpayers, locally generated income and grants from central government, is used to pay for the services provided by local authorities in your area. Further information about the business rates system, may be obtained at: GOV.UK website.
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 ratepayers 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 your local authority as soon as possible.
National Non-Domestic Rating Multiplier
The local authority works out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier.
There are two multipliers: the national non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year, except in the City of London where special arrangements apply.
Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to certain other mandatory relief[s] 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.
The multiplier for a financial year is based on the previous year’s multiplier adjusted to reflect the Consumer Price Index (CPI) inflation figure for the September prior to the billing year. The current multipliers are shown on the front of your bill.
Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs. They compile and maintain a full list of all rateable values, available on the valuation office agency website.
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 specified in legislation. For the current rating list, this date was set as Wednesday 1 April 2015.
The Valuation Office Agency may alter the valuation if circumstances change. The ratepayer (and certain others who have an interest in the property) can also check and challenge the valuation shown in the list if they believe it is wrong.
Further information about the grounds on which challenges may be made and the process for doing so can be found on the VOA website.
All non-domestic property rateable values are reassessed at revaluations. The most recent revaluation took effect from Saturday 1 April 2017. Revaluations ensure that business rates bills are up to date, more accurately reflect current rental values and relative changes in rents.
Frequent revaluations ensure the system continues to be responsive to changing economic conditions.
Business Rate Reliefs
Depending on individual circumstances, a ratepayer may be eligible for a rate relief (i.e. a reduction in your business rates bill). There are a range of available reliefs. Some of the permanent reliefs are set out below but temporary reliefs are often introduced by the Government at Budgets. You should contact your local authority for details on the latest availability of business rates reliefs and advice on whether you may qualify.
Further detail on reliefs is also provided on the GOV.UK website.
Small Business Rates Relief
If a ratepayer’s sole or main property has a rateable value which does not exceed an amount set out in regulations, the ratepayer may receive a percentage reduction in their rates bill for this property of up to a maximum of 100%. The level of reduction will depend on the rateable value of the property – for example eligible properties below a specified lower threshold will receive 100% relief, and you may receive partial tapered relief up to a specified upper threshold.
The relevant thresholds for relief are set out in regulations and can be obtained from your local authority or on the GOV.UK website.
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 the limit set in regulations.
The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set in regulations. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a fixed additional period.
Full details on the relevant limits in relation to second properties and the current period for which a ratepayer may continue to receive relief after taking on an additional property can be obtained on the GOV.UK website.
Certain changes in circumstances will need to be notified to the local authority by the 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 property falls vacant,
- (b) the ratepayer taking up occupation of an additional property, and
- (c) 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.
Unoccupied Property Rate Relief
Business rates are generally payable in respect of unoccupied non-domestic property. However, they are generally not payable for the first three months that a property is empty. This is extended to six months in the case of certain other properties (for example industrial premises).
Full details on exemptions can be obtained on the GOV.UK website : Apply for business rate relief.
Transitional Rate Relief
At a revaluation, some ratepayers will see reductions or no change in their bill whereas some ratepayers will see increases. Transitional relief schemes are introduced at each revaluation to help those facing increases. This relief has been funded by limiting the reduction in bills for those who have benefitted from the revaluation. Transitional relief is applied automatically to bills.
Further information about transitional arrangements and other reliefs may be obtained from the GOV.UK website : Apply for business rate relief.
Local authorities have a general power to grant discretionary local discounts and to give hardship relief in specific circumstances. Full details can be obtained by emailing email@example.com.
Retail, Hospitality and Leisure Relief
At the Budget on Wednesday 27 October 2921 the Chancellor announced that the introduction of a new business rates relief scheme for retail, hospitality and leisure properties.
The 2022/23 Retail, Hospitality and Leisure Business Rates Relief scheme will provide eligible, occupied, retail, hospitality and leisure properties with a 50% relief, up to a cash cap limit of £110,000 per business.
Relief for Local Newspapers
The Government has announced that the discount of £1500 for office space occupied by local newspapers will apply for an additional five years until Monday 31 March 2025.
The award of discretionary reliefs 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.
Following the outbreak of Coronavirus the European Commission introduced the Temporary Framework for the UK. The maximum level of aid that a company may receive is EUR 800,000
More information can be found on the European Commission website.
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 and the Institute of Revenues, Rating and Valuation are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser or company you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.
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 must be occupied. An eligible ratepayer is entitled to relief at 100% of the full charge (50% being mandatory relief and 50% centrally funded discretionary relief).
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 www.rbwm.gov.uk.