Business rates relief and reductions

Partly Occupied Property Relief

A ratepayer is liable for the full non-domestic rate whether a propery 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.

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 case of certain industrial properties.  After this period, rates are payable in full unless the unoccupied property rate has been reduced by the Government by order.  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 empty property rate.  Full details on exemptions can be obtained from the local authority.  If the unoccupied property rate for the financial year has been reduced by order, it will be shown on the front of your bill.  

The assessment of rateable values is undertaken by your local valation officer (VO) who is independent of the council.  Rateable values represent rental values and demand levels at a set valuation date, currently 1 April 2003. Certain physical changes since that date can be taken into account in rateable value such as new building in the locality or alterations to the property.  Broadly speaking changes in demand for a property, it becoming empty or it being in disrepair are ignored in considering rateable value. If you consider that the rateable value of your property is excessive then you should contact the VO at www.voa.gov.uk/

Charities and discretionary relief

Under the provisions of Section 43 of the Local Government Finance Act 1988, where the occupiers of non-domestic property are registered charities or trustees for a charity they are entitled to mandatory relief of 80%, providing that the property is wholly or mainly used for charitable purposes (whether of that charity or of that and other charities). Occupiers of Community Amateur Sports Clubs are also entitled to 80% mandatory relief from 1/4/2004. 

Under the provisions of Section 47 of the Local Government Finance Act 1988 the council has power to grant up to a further 20% discretionary relief to those receiving mandatory relief. The Council also has power to grant up to 100% discretionary relief.<

NDR Discretionary Rate Relief Policy- 2009     

application-by-a-charity

Rural rate relief

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 £7,000, or the only public house or the only petrol station and have a rateable value of less than £10,500. 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 £14,000.

It is a statutory requirement of local authorities to compile and publish a Rural Settlement List.

Rural settlements are settlements with a population of less than 3,000 within the boundaries of a rural area as set out under the provisions of the Housing Act 1996.

Below is the draft Rural Settlement List for Shepway for the 2009/10 Financial Year for inspection. Any comments or questions regarding the Rural Settlement List should be directed to the Business Rates Team.

draft-sdc-rural-settlement-list-2009/10

Small business rate relief

This relief is only available to ratepayers who apply to their local authority and who occupy either-

• one property, or
• one main propertyand other additional properties providing those additional properties eachhave a rateable values less than £2,200.

The rateable value of the property mentioned in (1), or the aggregate rateable value of all properties mentioned in (2), must be under £15,000 outside London or £21,500 within London, including on the 1 April each year.

Ratepayers who satisfy these conditions will have the bill for their single or main property calculated using the lower small business non-domestic rating multiplier rather than the ordinary non-domestic rating multiplier that is used to calculate the liablity of other businesses.

In addition, if the single or main property is shown on the rating list with a rateable value of up to £10,000, the ratepayer will recieve 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 £5,000.

If an application for relief is granted, provided the ratepayer's circumstances do not change, the application will not need to be renewed until the next revaluation of non-domestic premises, which happens every five years. 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 didnot 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 relief.

Notification of these changes must be given to the local authority within 4 weeks of the day after the day the change happened. If this happens, there will be no interruption to the ratepayer's entitlement to the relief. However, failure to notify the authority within this timeframe will mean the ratepayer ceases to be entitled to the relief with effect from the day that the change happened. If they are still eligible, the ratepayer will be entitled to the relief again with effect from the day that they notify the local authority. A notification that the ratepayer has taken up occcupation 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.

small-business-rate-relief-application-form

BUDGET ANNOUNCEMENT MARCH 2010 - INCREASE IN LEVEL OF SMALL BUSINESS RELIEF

march-2010-budget-announcment

Hardship relief

Section 49 of the Local Government and Finance Act 1988 provides that a charging authority may reduce or remit the whole or part of the rates payable by a ratepayer provided:-

(a) the ratepayer would sustain hardship if the authority did not do so, and
(b) it is reasonable for the authority to do so, having regard to the interests of its local charge/taxpayers.

GUIDELINES FOR CONSIDERATION OF BUSINESS RATES HARDSHIP RELIEF

The following guidelines have been adopted as the general criteria against which applications for remission of business rates liability are judged subject to each application being considered on its own individual merits:-

• the application must provide three years audited accounts wherever possible together with such further financial information that is needed.
• there must be proof that hardship is sustained shown by the latest available accounts of the business.
• business rates must be put into context with the overall expenses of the business and the losses being incurred.
• it must be proved that it would be in the local charge/taxpayers interests to write off or remit part of the rates.
• the closure of the business would be detrimental to the neighbourhood community or the District as a whole.
• a general store located in a rural location, which is the only one of its type within that community, should be considered for a reduction of 80% of the net rate liability where the hardship can be proved.
• application will be effective from the start of the financial year in which the application is made and will be reviewed annually. Relief will be withdrawn on the sale of the business.

hardship-relief

Transitional arrangements

Property values normally change between each revaluation. Transitional arrangements help phase in the effects of these changes by limiting increases in bills. To help pay the limits on increases in bills, there also have to be 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 1 April 2005, transitional arrangements will not normally apply to the part of the bill that relates to any increase in rateable value to those changes. Any transitional adjustments are shown on the front of the bill.

Further information may be obtained from the Business Rates Team or the website http://www.mybusinessrates.gov.uk/