* Since April 2012, Authorities automatically apply the small UBR to any hereditament below the threshold. However, where the property is unoccupied, or the ratepayer does not qualify for SBRR then they will not be entitled to the small UBR. **Estimate based on predicted Sept 2021 CPI.
City of London Supplement
Hereditaments located within the City of London will have an additional Supplement of 0.008p added to the Multipliers noted in the above table when their Business Rates are calculated.
Business Rates Supplement (BRS) ***
County Councils, Unitary District Councils and the Greater London Authority are entitled to levy a Business Rates Supplement (BRS) to fund additional projects that improve the economic development of their area. The ability to charge this additional levy was introduced on the 1st April 2010 and is subject to a maximum levy of 0.02p in every pound. To date, the only active scheme is in London to fund ‘Crossrail’, where a 2p levy on the UBR is charged to all businesses with assessments over RV 70,000.
The Transitional Relief Scheme phases in liabilities following a revaluation in order to ensure that ratepayers are not faced with significant changes at the start of the new rating list. The scheme works by taking the preceding year’s rate liability (excluding any exemptions, reliefs or supplements including BRS), adjusting for the RPI Sept/Sept and applying the appropriate cap set out below. The below table outlines the different ‘Levels’ and ‘Rates’ of Transition applicable across the ‘2017 Valuation List.’
*RV 28,000 in London ** RV 28,001 in London
No Guidance has been issues as to whether there will transitional arrangement applicable in the 2022/23 rate year.
SUPPORTING SMALL BUSINESS
The Transitional Relief Scheme does not provide support in respect of changes in reliefs. Therefore, those ratepayers who are losing some or all of their small business or rural rate relief may be facing very large percentage increases in bills. From the 1st April 2017, Central Government have introduced additional support for any small business that has a significant increase in their Rateable Value. To help these ratepayers, the supporting small businesses relief will ensure that the increase per year in the bills of these ratepayers is limited to the greater of:
- A cash value of £600 per year (£50 per month). This cash minimum increase ensures that those ratepayers currently paying nothing, or very small amounts are brought into paying something, or;
- The matching cap on increases for small properties in the transitional relief scheme as noted in the table below
Expanded Retail Discount 100% – 1st April 2020 – 31st March 2021
With effect from 1st April 2021 for a period of 12 months, 100% relief will be applicable to the following eligible occupied properties that are accessible to visiting members of the public are wholly or mainly being used as;
- Shops, Restaurants, Cafes, Drinking Establishments, Cinemas and Live Music Venues,
- For Assembly and Leisure;
- As Hotels, Guest & Boarding Premises and Self-Catering Accommodation.
- Estate Agents and Recruitment Agencies.
Expanded Retail Discount 100% – 1st April – 30th June 2021
Central Government have announced that the 100% Expanded Retail Discount will be extended for 3 months for the period 1st April – 30th June 2021, this period of relief will be uncapped.
Expanded Retail Discount 66% – 1st July 2021 – 31st March 2022
With effect from 1st July 2021 and through to the 31st March 2022, the relief applicable will reduce to 66%, this relief will be capped at the following levels; £2 Million for qualifying premises that were either mandated to closed on 5th January 2021 or had significant restrictions placed on their ability to trade, or; £105,000 for qualifying premises that did not need to close or restrict their trading ability with effect from 5th January 2021. In relation to the above caps, no ratepayer can in any circumstances exceed the £2 million cash cap across all their hereditaments in England. Where a ratepayer eligible for the closed cash cap also occupies hereditaments which do not meet the criteria for the closed cash cap and the value of the discount on the closed hereditaments is less than £2 million then they may also claim the discount on other eligible hereditaments but only up to the cap of £105,000 in respect of those other eligible hereditaments. For example, such a ratepayer whose rate bill from 1 July 2021 onwards on hereditaments eligible for the closed cash cap is £1 million and also occupies other eligible hereditaments with a rates bill of £3 million is able to claim up to £1,105,000 in discount from 1 July 2021 onwards (£1million on their closed hereditament and then up to the £105,000 cash cap on their other eligible hereditaments). Where a ratepayer has a qualifying connection with another ratepayer then those ratepayers should be considered as one ratepayer for the purposes of the cash caps. A ratepayer shall be treated as having a qualifying connection with another: a. where both ratepayers are companies, and i. one is a subsidiary of the other, or ii. both are subsidiaries of the same company; or b. where only one ratepayer is a company, the other ratepayer (the “second ratepayer”) has such an interest in that company as would, if the second ratepayer were a company, result in its being the holding company of the other. Hereditaments which have closed temporarily due to the government’s advice on Covid-19 are to be treated as occupied for the purposes of this relief.
With effect from 1st April 2020 for a period of 12 months, the Government have announced that hereditaments occupied by providers on Ofsted’s Early Years Register and wholly or mainly used for the provision of the Early Years Foundation Stage and which are subject to business rates in the year 2020/21, will receive 100% relief. For the 2021/22, the relief will be extended in line with the Expanded Retail Discount, 100% relief will be applicable for the period 1st April -30th June 2021, this will reduce to 66% relief for the period 1st July 2021 – 31st March 2022, capped at £105,000 per business for other eligible properties. For the period 1st April – 30th June 2021 and in relation to any property where an entitlement to either the Expanded Retail Relief or Nursery Discount applies, Billing Authorities have been advised that no instalments should be demanded, and demands for instalments should recommence with effect from July 2021. For the Expanded Retail Discount 2021/22 and Nursery Discount 2021/22, businesses may choose to opt out of support by providing billing authorities notification of their request to refuse support, per eligible hereditament.
State Aid - The Government’s assessment is that, given the impact of Covid-19 in the sectors receiving the relief, the business rates expanded retail, leisure and hospitality discount & nursery discount for 2020-21 & 2021-22 is not subject to state aid ‘De-Minimis’ rules which due to the United Kingdom leaving the EU has been replaced under the EU-UK Trade and Cooperation Agreement by Subsidy Control
COVID-19 RESTART GRANTS*
To assist business to ‘Restart’ and navigate their way in the reopening of the economy and the wider society. Central Government will provide additional funding to that provide in support of the enforced closures in November 2020 and January 2021. Restart grants are a one-off payment and will be effective from 1st April 2021, the grants are only payable to properties that are showing in the Valuation List on 1st April 2021. The ‘Restart Grants’ will fall into two strands – Strand 1 of the Restart Grant will support non-essential retail premises with one-off grants of up to £6,000 The following thresholds apply for these businesses: a. Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on 1 April 2021 will receive a payment of £2,667. b. Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on 1 April 2021 will receive a payment of £4,000. c. Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or over on 1 April 2021 will receive a payment of £6,000.
Strand 2 of the Restart Grant will also support hospitality, accommodation, leisure, personal care and gym business premises with one-off grants of up to £18,000. The following thresholds apply for these businesses: a. Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £15,000 or under on 1 April 2021 will receive a payment of £8,000. b. Businesses occupying hereditaments appearing on the local rating list with a rateable value over £15,000 and less than £51,000 on 1 April 2021 will receive a payment of £12,000. c. Businesses occupying hereditaments appearing on the local rating list with a rateable value of exactly £51,000 or over on 1 April 2021 will receive a payment of £18,000.
*The Restart Grants are subject to the following Subsidy Allowances:
- Small Amounts of Financial Assistance Allowance – you’re allowed up to £335,000 (subject to exchange rates) over any period of 3 years
- COVID-19 Business Grant Allowance – you’re allowed up to £1,600,000
- COVID-19 Business Grant Special Allowance - if you have reached your limits under the Small Amounts of Financial Assistance Allowance and COVID-19 Business Grant Allowance, you may be able to access a further allowance of funding under these scheme rules of up to £9,000,000, provided certain conditions are met
SUPPORT FOR AIRPORTS
The government is renewing the Airports and Ground Operations Support Scheme for a further six months from the start of 2021-22. This will provide support for eligible businesses in England up to the equivalent of half of their business rates liabilities during 2021-22, subject to certain conditions and a cap per claimant of £4 million.
MCC (MATERIAL CHANGE OF CIRCUMSTANCES) APPEAL – EFFECTS OF COVID-19
Central Government have announced that Legislation is to be introduced to outlaw MCC appeals in relation to the impact of Covid-19, primary legislation with retrospective effect, will be introduced, when parliamentary time allows, to ensure that the government’s response to the coronavirus is not considered relevant for MCC purposes from the start of the pandemic. The Government have announced a new Business Rates Relief fund of £1.5 Billion for business affected by Covid-19 outside the retail, hospitality and leisure sectors. The £1.5 Billion fund will be allocated to Billing Authorities to administer, at the time of writing, guidance is yet to be announced
SMALL BUSINESS RATES RELIEF (SBRR)
Small Business Rates Relief is still applicable if a ratepayer occupiers more than one property providing that all other properties except the one in receipt of the relief have a RV <2,900 and combined, these properties do not exceed RV <20,000 (RV <28,000 in London). With effect from 14th February 2015, any ratepayer receiving SBRR that takes on an additional hereditament, which would disqualify them from receiving the relief, will continue to receive the existing relief for 12 months from the start date of liability on the additional hereditament.
UNOCCUPIED AND VACANT PROPERTIES
Since 1st April 2011, the threshold at which Unoccupied and Vacant properties become liable to pay rates dropped from RV 18,000 to RV 2,600. As part of the 2017 revaluation this figure has been uprated to RV 2,899.
EMPTY PROPERTY: RELIEF AND EXEMPTIONS
* Exemption applies when a property is newly assessed for rates or when it is vacated provided a period of “rateable occupation” exceeding 42 days has occurred. ** Exemption applies where Local Authority are of the view that the property will next be occupied by a Charity.
PARTIALLY EMPTY PROPERTIES
When a property is partially vacant for a short period, the ratepayer can apply to the Billing Authority for relief under Section 44A of the Local Government Finance Act 1988. The relief will apply to the vacant part in accordance with the previously noted ‘Empty Property; Relief and Exemptions’ table. Granting of this relief is discretionary and the final decision rests with the Billing Authority. There are no provisions within Section 44A of the Local Government Finance Act 1988, to appeal any decision made by the Billing Authority, the only legal route to have the decision reviewed is by way of ‘Judicial Review’. However, it is good practice for all Billing Authorities to have an internal appeals procedure to reconsider any decision made at the request of the ‘Ratepayer’’.
FREEPORTS TAX RELIEF
Relief will be available to all new businesses, and certain existing businesses where they expand and locate to one of the newly created freeports, this is valid until 30 September 2026. Relief will apply for five years from the point at which each beneficiary first receives relief.
RURAL RATE RELIEF
Since 1st April 2017, the percentage relief awarded under Rural Rate Relief has doubled from 50% to 100%. Rural Rate Relief is available to the following businesses in designated rural settlements:
- A small food shop, general store or post office with a rateable value of up to 8,500.
- The sole public house or petrol station with a rateable value of up to £12,500.
DISCRETIONARY RELIEF AND LOCALISED DISCOUNT*
Since 1st April 2012, the discretionary relief regulations were amended to allow Billing Authorities to remit any liability or grant rate relief to any ratepayer. For any application made, the Council must consider that any award or remittance of rates is in the interest of the local ‘Council Taxpayer’. This is because the Billing Authority is required to fund 50% of this relief from their own budget, with Central Government funding the remainder.
Since 1st April 2012, Billing Authorities can grant up to 100% relief to businesses located in a designated Enterprise Zone. In order to qualify, a business must have been located in the Zone or move in prior to 1st April 2018. The relief can also apply to empty properties and Small Business. The relief lasts for five years with a maximum grant of £275,000. In order to encourage Billing Authorities to grant this relief the Government has agreed to fund 100% of the cost.
SELF-CATERING AND HOLIDAY LET ACCOMMODATION
In England, if your property is available to let for 140 days or more per year for short term lets, it will be treated as commercial rather than domestic and be rated as a self-catering property and valued for Business Rates instead of being valued and banded for Council Tax. In March 2021 The government has announced it wants to stop property owners from reducing their tax liability by declaring a property is for rent, while making little effort to rent it out. Legislation will be bought forward to change the criteria for determining whether a holiday let is valued for business rates by asking owners to account for actual days it was rented.
The stud farms Rateable Value discount has increased from 4,200 to 4,700. This is applied by the VOA at source.
LOCAL NEWSPAPER DISCOUNT*
Since 1st April 2017, for a period of two years, a discount of £1,500 will be available to office space occupied by Local Newspapers. This is restricted to one discount per Local Newspaper title and per hereditament. This was extended for an additional year and will be available through until 31st March 2020. A further extension of 5 Years has been announced and the relief will now apply through until 31st March 2025.
PUBLIC TOILET RELIEF
The Non-Domestic Rating (Public Toilets) Act received Royal Assent on 29 April. This Act provides a 100% business rates relief for separately assessed public toilets in England and Wales, including those being operated by local authorities. This relief applies retrospectively from 1 April 2020.
RIGHT TO INCREASE INSTALMENTS
Since 1st April 2014, all ratepayers are entitled to pay their Business Rates over a 12-month instalment plan as opposed to the previous 10. To benefit in full, any application for this must be made in writing before 14th April in the relevant year. Once applied for, this must carry forward to all subsequent years’ liability.
*Relief is subject to Subsidy Allowances under Article 3.2(4) EU-UK Trade and Cooperation Agreement by Subsidy Control, This allowance is 325,000 Special Drawing Rights, to a single economic actor over any period of three fiscal years, which is the equivalent of £335,000 as at 2 March 2021.