England
England
MULTIPLIERS
**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. With effect from 1st April 2024 this restriction will be removed and all properties with an RV of 50,999 or below will automatically have the charge calculated using the Small Multiplier.
City of London Supplement
Hereditaments located within the City of London will have an additional Supplement applied for assessments with an RV of <50,999 this will be £0.016p and for assessments with an RV of 51,000> this will be £0.018p. Confirmation of these figures should be announced in February 2025.
These supplements will be added to the multipliers noted in the above table when their Business Rates are calculated. This mean that from 1st April 2025 for any assessments located within the City of London the following multipliers will be relevant.
RV <51,000 - 0.515p,
RV 51,000 -74,999 – 0.573p
RV 75,000> - 0.593pp
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 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 75,000. (This is an increase with effect from 1st April 2023 from 70,000).
TRANSTIONAL RELIEF
The Transitional Relief Scheme phases in liabilities following a revaluation 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 ‘2023 Valuation List.’
*RV 28,000 in London ** RV 28,001 in London *** Plus inflation
The Transitional Relief Scheme introduced for the 2023 Valuation List only applies to hereditaments that have seen an increase in their Rateable Value. This is referred to ‘Upwards Phasing’. Central Government has removed ‘Downwards phasing, which mean any Ratepayer whose Rateable value has dropped will benefit from the decrease immediately with effect from 1st April 2023.
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 their small business or rural rate relief may be facing very large percentage increases in bills.
From 1st April 2023, Central Government have extended the additional support provided 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.
Supporting Small Business Relief should be automatically applied to by the relevant Local Council or Billing Authority.
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.
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.
EXPANDED RETAIL RELIEF & RETAIL, HOSPITALITY AND LESUIRE RELEIF
2020-21
Expanded Retail Discount 100% – 1st April 2020 – 31st March 2021.
With effect from 1st April 2021 for a period of 12 months, 100% relief was applicable to the eligible occupied properties that were accessible to visiting members and fell with the relevant qualifying criteria.
Applications for this relief closed with effect from 30th September 2021.
2021-22
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 31st March 2022, the relief applicable will reduce to 66%. This relief was 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.
Applications for this relief closed with effect from 30th September 2022.
2022/23+
Retail, Hospitality and Leisure Relief - 50% – 1st April 2022 – 31st March 2023.
The relief was extended at 50% for 12 months for the period 1st April 2022 – 31st March 2023.
This relief will subject to a cash cap of £110,000.
A ratepayer must not in any circumstances exceed the £110,000 cash cap across all their hereditaments in England.
Estate Agent and Recruitment Agencies have been removed from the criteria for qualifying for this relief.
2023/24 & 2024/25+
Retail, Hospitality and Leisure Relief 75% – 1st April 2023 – 31st March 2025.
Retail, Hospitality and Leisure has been extended at 75% for 24 months for the period 1st April 2024 – 31st March 2025.
This relief will subject to a cash cap of £110,000 per rate year 2023/24 & 2024/25.
A ratepayer must not in any circumstances exceed the £110,000 cash cap across all their hereditaments in England.
2025/26+
Retail, Hospitality and Leisure Relief 40% – 1st April 2025 – 31st March 2026.
Retail, Hospitality and Leisure has been extended for a further year, however, the relief available has been reduced from 75% to 40% for 12-month period 1st April 2025 – 31st March 2026.
This relief will subject to a cash cap of £110,000 per Business /Group of Companies.
A ratepayer must not in any circumstances exceed the £110,000 cash cap across all their hereditaments in England or where any Ratepayer has a qualifying link with another Ratepayer.
MCC (MATERIAL CHANGE OF CIRCUMSTANCES) APPEAL – EFFECTS OF COVID-19 – (CARF – COVID ADDITIONAL RELEF FUND+)
Central Government have introduced Legislation Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021, prohibited the ability to submit an MCC appeal in relation to the impact of Covid-19. The act has been introduced with retrospective effect.
To provide support for this Central Government have provided a £1.5 Billion fund to Billing Authorities to provide support to sectors who were affected by the governments response to Covid-19 but did not receive any support in the forms of relief or grants.
This fund was administered locally, and schemes and qualifying criteria will significantly vary across different Local Councils/Billing Authorities, therefore, it would be advisable to consult local council to see if any of the relief may be available.
Business may be able to get support under the COVID-19 additional relief fund if both of the following apply:
- The business was affected by coronavirus (COVID-19)
- The business was not eligible for any of the Retail Discount, Nurseries Discount or the Airport and Ground Operations Support Scheme (AGOSS) whether an application was made or not. CARF was administered locally, and schemes and qualifying criteria will significantly vary across different Local Councils/Billing Authorities, therefore, it would be advisable to consult local council to see if any of the relief may be available.
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.
CONSULTATION INTO BUSINESS RATES AVOIDANCE AND EVASION:
Central Government have published the outcome to the consultation into Business Rates Avoidance and Evasion Consultation.
The Government is extending the Empty Property Relief “reset period”, from six weeks to three months (13 weeks) from 1 April 2024 in England. This will reduce the financial incentive to avoid business rates on empty properties through various mitigations methods.
The Government will legislate so that from 1 April 2024, properties that have already benefited from EPR will be required to be occupied for a minimum period of three months (thirteen weeks) before they can benefit from a further period of relief. Central Government have advised that the change will only have effect to properties that are occupied after 1st April 2024 and for any property that is occupied prior to this date will be subject to the previous 6-week rule for considering rateable occupation.
Further to the this the current labour Government have announce a publication of a discussion Paper, setting out other potential areas of business rates reform, including shorter revaluation cycles and/or a shorter gap between the valuation date and each new rating list. The Discussion Paper also raises the prospect of a further crackdown on business rates avoidance and evasion, following the previous budgets tightening of Empty Rate Mitigation (as outlined above).
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. (if the property has previously received any unoccupied exemption, from the 1st April 2024 the a period of ‘rateable occupation’ must exceed 13 weeks (3 months).
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.
FILM AND TELEVISION STUDIOS RELIEF
Film and TV studios saw a substantial increase in Rateable Value at the 2023 Revaluation. Following industry pressure, government has unveiled a 40% relief to be applied in England from 2024 to 2034. However, the relief will be applied to the gross charge. With most studios already benefitting from transitional relief, this new relief will have a limited impact in the short term. Furthermore, studios face having the relief removed if they successfully challenge their rateable values, punishing studios who seek to correct their level of assessment.
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. With effect from 1st April 2024, the time restriction of 6 months after end of the Rate Year on relief being claimed, awarded or withdrawn has been removed.
MANDATORY CHARITABLE RELIEF
Relief of 80% is applicable to properties that are occupied and wholly or mainly used for Charitable Purposes.
To be eligible the property must be used by -
· A Charity, or a trustee of a charity
· A community amateur sports club (CASC)
· If a Ratepayer is exempt from VAT for charity reason, they may also qualify for charitable Relief.
With effect form 1st April and to coincide with the removal of the relevant VAT Exemption, Independent Fee-Paying School and Education establishments will no longer be entitled to receive 80% Mandatory Relief.
Any Ratepayer who receives 80% Mandatory Relief, is excluded from claiming Small Business Rates Relief and any associated reduction in the base multiplier.
If a property is vacant and the legal owner is a Charity, Trustee of a Charity or a Community Amateur Sports club and it appears that when next in use the property will be used for charitable purposes, the continuous 100% exemption is applicable from Unoccupied Rates.
EN TERPRISE ZONES+
Since 1st April 2012, Billing Authorities can grant up to 100% relief to businesses located in a designated Enterprise Zone. 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. To encourage Billing Authorities to grant this relief the Government has agreed to fund 100% of the cost.
GREEN TECHNOLOGY EXEMPTION
Central Government have previously announced that from 1st April 2023 a new ‘Green Relief’ to support green investment and the decarbonisation of building would be applicable form 1st April 2023. This relief would fall into two measures. 1: An exemption on all eligible plant and machinery used in onsite renewable energy generation and storage. Plant and Machinery such as rooftop solar panels, wind turbines, and battery storage will be exempt along with storage used with electric vehicle storage points. 2: A 100% relief for eligible low carbon heat networks which have their own rating assessment and subsequent Business Rates Demands. To elevate the spiralling cost of energy, the Chancellor at his spring statement in March 2022 announced that he was bringing the introduction of the ‘Green Relief’ by one year to the 1st of April 2022. The green plant and machinery exemption will take effect once the regulations have come into force which will be as soon as possible after 1 April 2022. The VOA will work to implement this exemption over the coming months, and it will be backdated to the date the regulations came into force. Guidance for the heat networks relief will be published by Department for Levelling Up Housing and Communities during the Spring/Summer. The relief will be backdated to 1 April 2022. +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.
IMPROVEMENT RELIEF
With effect from the 1st April 2024, relief will be available for Ratepayers who complete improvements work on their properties which may cause an increase in the rateable value.
The relief will be for a maximum of 12 months and only applies to occupied properties, therefore, any change in occupation may result in a removal of the relief.
Examples of the type of works which may meet the definition of qualifying works for the relief:
• a business adds insulation or new lining to a previously uninsulated old industrial property resulting in an increase in value of the property,
• a business makes a physical extension to their property, like an extension to the rear,
• a shop removes a structural wall within its front part. This could increase the rateable value as the areas previously behind the wall are now able to be used for retail purposes rather than storage, or
• a business adds a structural mezzanine retail area at their retail warehouse.
Application for this relief should be made to the relevant Local Authority, who will request a certificate from the Valuation Office to apportion the RV to allow for the correct amount of Relief to be applied.
SELF-CATERING AND HOLIDAY LET ACCOMMODATION
Currently 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. However, from April 2023, owners of second home who claim to be using them as holiday lets will not only have to show that the property is available to let for 140 or more per year for short term lets but will also have to provide evidence that any property has been let out for 70 days a year to be eligible for Small Business Rates Relief where they meet all the other qualifying criteria. Acceptable evidence will be in the form of Websites (where bookings can be made), Brochures used to advertise the property and Lettings details including any receipts.
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.
PAYMENT OF INTEREST (AFTER RATEABLE VALUE REDUCTION)
Since 2009 the payment of interest on Business Rates overpayments made has not been relevant due to Interest Rates running unusually low (for most of the period between 2009 and 2022, this was as between 0%-1%). However, with the current uncertain financial circumstances, interest rates have risen rapidly over the last 12 months, therefore effective from 1st April 2023, interest on Business Rates overpayments may now be relevant. Separate rates of interest may be applicable for each year where any overpayment has occurred, and interest is calculated at 1% less than the ‘Standard Rate’ (Bank of England Base Rate) on 15th March preceding the financial year concerned. Interest on overpayments of Business Rates is subject to several criteria, however, the two main ones are – 1. An overpayment of Business Rates within the relevant period must have been made and 2. This overpayment can only have been because of an Alteration to the Rateable Value shown within the Rating List. The payment of interest compensates Ratepayers for the obligation to pay in accordance with the entry in the Rating List regardless of whether that entry is later to be found to have been incorrect. Therefore, if enforcement action has reached the liability order stage in relation to any Rates in the relevant period and an overpayment is created after the Rateable Value is amended, no interest is payable in respect of any part of that year.
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
Public Toilet Relief 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.
STUD FARMS
The stud farms Rateable Value discount has increased from 4,200 to 4,700. This is applied by the VOA at source.
2017 VALUATION LIST 'ENDING OF APPEAL RIGHTS'
The 2017 valuation list closes on the 31st March 2023. Central Government have decided that in line with previous valuation list the last day on which ratepayers will be able to initiate the appeal process on the 2017 rating list will be the last day of the list – 31 March 2023 (subject to the exceptions below). To have initiated the appeal process a ratepayer must have reached the stage of confirmation of check – the first stage of Check Challenge Appeal (CCA). As noted above there are exceptions to this rule: the VOA have amended the 2017 list in which case the ratepayer will have 6 months from the VOA alteration: or where the ratepayer believes their assessment is wrong due to a relevant court decision, in which case they will have 6 months from 31 March 2023.
2023 REVALUATION 'DECAPITALISATION RATE'
Decapitalisation rates are part of the rating valuations for certain specialist properties for which rental data is not available and which are instead valued based on construction costs – known as the contractor’s basis of valuation. Unlike other aspects of valuations which are done independently by the Valuation Office Agency (VOA), these decapitalisation rates are set by Ministers. The current decapitalisation rates were set in 2016 for all future rating lists by The Non-Domestic Rating (Miscellaneous Provisions) (No. 2) Regulations 1989 (Amendment) (England) Regulations 2016 SI 2016 No. 777 at 2.6% for education healthcare and defence properties and 4.4% for other properties valued on the contractor’s basis. Therefore, for the 2023 revaluation the decapitalisation rates will remain at the level set in 2016 of 2.6% and 4.4%.
CENTRAL RATING LIST (CUMULO HEREDITAMENTS)
Central Government have published a consultation document regarding proposed changes to the Central Rating for the 2023 Revaluation. The government have announced that the following will be relevant from 1st April 2023:
- Certain large telecom networks and the Channel Tunnel Rail Link will be moved from local lists to the central rating list. Final decisions on whether to move individual networks will be made in consultation with the ratepayers concerned on a case-by-case basis. The valuation office will make contact with those networks, and
- That for the 2023 revaluation the mobile telecom sector should continue to be assessed on local rating lists in the normal way. The government have advised that they will continue to keep this matter under review and look again at the evidence ahead of the 2026 revaluation.
COMPLETION NOTICE – AMENDMENTS.
With effect from 26th December 2023 The Non-Domestic Rating Act, amends the completion notice regulations to allow for notices to be issued on any hereditament (or part thereof) that has previously been shown in the valuation list, but as a result of works of alteration has been deleted. Prior to this amendment, only properties that had undergone substantial works to the extent that they would be classified as new properties would fall under the completion notice provisions.
In simple terms this means that Local Councils / Billing Authorities will be able to issue completion notices for properties that are not regarded as new structures. For example, a refurbished property brought back to CAT A condition would now fall under these new provisions.
The below table outlines in brief the before and after position of the amended regulations.
*Property incapable of beneficial occupation (John Laing & Son Ltd v Kingswood Area Assessment Committee [1949] 1 All ER 224 CA)
** Assuming the property can reasonably be expected to be completed to CAT B and be ready for occupation within 3 months.
NEW OBLIGATIONS ON RATEPAYERS TO SUPPLY INFORMATION TO THE VALUATION OFFICE AGENCY.
The Business Rates Revaluation came into force on 1st April 2023 and will herald several changes which are being introduced as part of the Governments fundamental reform of the system.
The current Labour Government has confirmed that Duty to Notify will be rolled out on a phased basis commencing in April 2026 and will be fully mandated by April 2029, substantially increasing the administrative burden on all Ratepayers. Duty to Notify will place several new mandatory obligations on all businesses even for those who currently pay no business rates. These measures come with strict penalties for non-compliance.
To assist we set out the current proposed measures on the table below.