Business rates
- What are business rates?
- Rateable value
- Exemptions and reliefs
- Transitional arrangements
- Appeals
- Use of rating advisers for appeals
- What happens if I can't or don't pay?
- What action can the Council take?
- Help with business rates bill
What Are Business Rates?
Business rates, (also known as non-domestic rates) are collected by local councils and are the means by which businesses and other occupiers of non-domestic property make a contribution towards the cost of local services.
Except in the City of London where special arrangements apply, the rates are pooled by Central Government and redistributed to local councils according to the number of people living in the area.
This money, together with revenue from council taxpayers, revenue support grant provided by the Government and certain other sums, is used to pay for the services provided by your local council and other local authorities in your area.
Business rates are based on property valuations made for these purposes by a separate body - the Valuation Office Agency.
The annual business rate for a property is worked out by multiplying the rateable value by the appropriate multiplier (rate in the pound).
Since 1st April 2005 there have been two multipliers; the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The former is higher to pay for small business rate relief.
The Government sets the multipliers for each financial year for the whole of England and normally changes both multipliers each year in line with inflation.
There are reductions available in certain circumstances.
Rateable Value
Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the valuation officers of the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs.
It draws up and maintains a full list of all rateable values which are available on their website at www.voa.gov.uk.
The Valuation Office Agency re-values all non-domestic properties every five years. The rateable value of your property will be shown on the front of your bill. The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation that came into effect on 1st April 2010, this date was set at 1st April 2008.
Any enquiries regarding the rateable value of a property should be made directly to the Valuation Office Agency:
The Valuation Officer
Forest Court
Forest Road
Tunbridge Wells
Kent
TN2 5FE
Helpdesk Telephone Number 0845 6021507
Exemptions and Reliefs
Charitable and Discretionary Relief
Charities and Registered Community Amateur Sports Clubs are entitled to 80% relief from rates where the property is occupied by the charity or club and is wholly or mainly used for charitable purposes or as a Registered Community Amateur Sports Club. Authorities have discretion to give further relief on the remaining 20% of the bill.
Authorities also have discretion to give relief to non profit-making organisations.
The Council will review your entitlement to relief on a regular basis and you will be asked to re-apply. For further information, or if you wish to apply for this relief, please contact the business rates team.
Small Business Rate Relief
This is available at 50% for ratepayers occupying single properties with a rateable value of up to £6,000, with relief declining in percentage terms on a sliding scale until it is 0% at £12,000.
- Small Business Rate Relief - to be used before October 2007
- Small Business Rate Relief - 2008
- Small Business Rate Relief - 2010
The relief is only available to ratepayers with either
- (a) One occupied property, or
- (b) One main occupied property and other additional occupied properties, providing those additional properties have rateable values less than £2,600.
The rateable value of the property mentioned in (a), or the aggregate rateable value of all properties mentioned in (b), must be under £18,000 outside London or £25,500 within London. If the rateable value, or aggregate rateable value, increases above those levels relief will cease from the day of the increase.
The scheme is funded through a supplement on the rate bills of those businesses not eligible for the relief. The supplement is built into the standard non-domestic rating multiplier.
However, ratepayers of eligible business properties with rateable values between £12,000 and £18,000 (£25,500 within London) do not have to contribute towards the relief and will have their bills calculated using the lower small business non-domestic rating multiplier.
If an application for relief is granted, provided the ratepayer continues to satisfy the conditions for relief, they will not need to re-apply for relief in each new valuation period.
Ratepayers need to notify certain changes in circumstances to the Council within four weeks of the date that the changes happened as below:
(a) the ratepayer takes up occupation of a property they did not occupy at the time of applying for relief, and
(b) an increase in the rateable value of a property occupied by a ratepayer in an area other than the area of the authority which granted relief.
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 the case of certain industrial properties. After this period, rates are payable in full unless the Government has ordered otherwise. In most cases, the unoccupied property rate is zero for properties owned by charities and Community Amateur Sports Clubs. A full exemption from empty rate applies if the property falls under one of the following categories:
- Unoccupied for a period of less than three/six months
- Occupation prohibited by law
- Kept vacant by reason of action taken by Crown or any local authority or public body
- Listed buildings
- Ancient monuments
- Property with a rateable value of less than £2,600 (£18,000 for 2010/11 only).
- Property for which the person entitled to possession does so as a personal representative of a deceased person, a liquidator or trustee or where the owner is subject to bankruptcy proceedings.
Reductions for partly occupied property And Businesses in Rural Areas
Generally rates are payable on a property whilst any part of the property included in the rating assessment is occupied. The Council may consider applications for a reduction in the amount of rates payable if part of the property is unoccupied and will remain so for a short time only. Such circumstances may apply where there are practical difficulties in occupying or vacating a property in one operation e.g. where new accommodation is not fully completed and occupation is to be phased over a number of weeks or months. Applications must be made in writing, together with a plan of the property. Before any reduction can apply the Council must obtain a certificate from the Valuation Office, apportioning the rateable value between the occupied and unoccupied parts.
The occupier of the sole general store, sole post office or any food shop appearing in a Billing Authority's rural settlement list will be entitled to rate relief if it is the only such store or post office in that area with a rateable value of £8,500 or less. The occupier of a Public House or petrol filling station will also be entitled to relief if it is the only such premises in the area that has a rateable value of £12,500 or less.
Mandatory relief is given at 50% of the rates bill with each Billing Authority having the discretion to remit all or part of the remaining 50%. Properties with a rateable value of £16,500 or less appearing on the rural settlement list may qualify for relief if the Billing Authority is satisfied that the property is used for a purpose which benefits the local community.
Crown Properties
Since 1st April 2000 most Crown properties have appeared in the local Rating Lists and have to pay Business Rates. This is due to the abolition of Crown exemption.
Transitional Arrangements
Property values normally change a good deal between each revaluation. Transitional arrangements help to phase in the effects of these changes by limiting increases in bills. To help pay for the limits on increases in bills, there also have to be limits on reductions in bills. Under the transition 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 1st April 2010, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Any transitional adjustments are shown on the front of this bill.
For further information about transitional arrangements and other reliefs contact the business rates team or visit the website www.businesslink.gov.uk
Appeals
The Valuation Officer has to maintain the list and may alter the value if he or she believes that the circumstances of the property have changed. The ratepayer (and certain others who have an interest in the property) can also appeal against the value shown in the list if they believe it is wrong.
Further information on the grounds for making an appeal, and how to make one, can be found on the VOA website at www.voa.gov.uk or from your local valuation office.
The effect of successful appeals against values shown in the rating list that came into force on 1 April 2005 will normally be backdated to the beginning of the financial year in which they are made, although there are exceptions to this. Further information about these arrangements may be obtained from your local valuation office.
Use Of Rating Advisers For Appeals
Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. Appeals against rateable values can be made free of charge. However, ratepayers who do wish to be represented should be aware that members of the Royal Institute of Chartered Surveyors (RICS – website www.rics.org) and the Institute of Revenues Rating and Valuation (IRRV – website www.irrv.org.uk) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser, you should check that they have the necessary knowledge and expertise as well as appropriate indemnity insurance.
Take great care and seek further advice before entering into any contract.
What Happens If I Can't Or Don't Pay?
The Council is required to collect business rates. If you have any difficulty paying your business rates, please contact us immediately.
Do not wait until you receive a summons, as this will result in you paying additional costs. If possible we will make an alternative payment arrangement with you and avoid formal recovery action.
If you miss a business rates installment you will receive a reminder giving you seven working days to pay the missing installment. If you do not do so, you will receive a summons.
What action can the Council take?
The Council can apply to the Magistrates' Court for a Liability Order.
You will be sent a summons telling you when the Court will consider the application and how much the Council is seeking to recover. This will include the cost to the Council of making the application.
You may attend Court if you feel that the order should not be made.
If you receive a business rates summons, you must contact us immediately in order to make an arrangement. Failure to do so may result in the debt being passed to an external bailiff or the commencement of legal proceedings to file for bankruptcy or liquidation.
Help with Business Rates Bills
2009/10 Business Rates Deferral Scheme
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 the deferral ended on 31 March 2010. For those ratepayers who applied for this scheme, the deferred amoount to be collected in 2010/11 and 2011/12 will be included in the bills for each of those years respectively.
If you have any queries please contact the business rates team on 01322 343008.
