Changes To Business Rates From 1 April 2015
The Government announced at 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;
- A £1,000 business rates discount for shops, food and drink businesses who occupy properties with a rateable value less than £50,000 was introduced. The discount will apply for 2 years between 2014/15 - 2015/16 and is subject to state aid limits. Please click on the links below for more information and the Form;
Retail Relief Application/Declaration
- Allow businesses to pay their business rates over 12 monthly instalments, from April to March;
- Introduced a temporary 50 per cent relief on business rates bills for new occupants of retail premises that have been empty for a year or more at the point of occupation. The maximum duration of the relief for the new occupant is 18 months. The relief is available to businesses which move into empty retail properties on or after 1 April 2014 and on or before 31 March 2016;
- 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.
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.
Qualifying Criteria
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.
Download the Business Rate Rural Settlement List for Erewash Borough Council 2015/16
Deferred payment of rates liabilities
Ratepayers in 2009/10 were able to defer payment of 3% of their 2009/10 rates bill and, where applicable, 60% of the increase in that bill due to the ending of the 2005 rating list transitional relief scheme. The right to apply for deferral has now ended. For those ratepayers who applied for this scheme, the deferred amount to be collected in 2010/2011 and 2011/2012 was included in the bills for each of those years respectively.
There was also be a Deferral Scheme for 2012/13 for 60% of the RPI increase (5.6%) which was 3.2%, with payments deferred until 2014/15, however, the Government have not introduced a scheme for 2015/16.