Business Rates Reductions

Reliefs

Discretionary revaluation relief scheme 2017

As part of his budget in April 2017, the Chancellor of the Exchequer announced a range of measures to support businesses which had suffered significant increases in their rates bills as a result of the 2017 Revaluation.  These measures were in addition to the Transitional Relief Scheme.

 

As part of these measures , Isle of Wight Council was allocated £864,000 over four years towards a local Discretionary Relief Scheme as detailed below:

  

Amount of discretionary fund awarded (£000s)

2017-18

2018-19

2019-20

2020-21

£504

£245

£101

£14

 

Relief will only be given to premises which are occupied and to ratepayers who are in occupation at 31 March 2017 and on 1 April 2017.  Any ratepayer taking up occupation on or after 1 April 2017 will not be eligible for relief as they would not have experienced rate increases due to a revaluation.

Relief will be targeted to local businesses and not those that are national or multi-national in nature.  Local businesses are, for the purpose of this scheme, those which have premises wholly in the Councils area.

Letters and application forms have been sent to those ratepayers that have been identified with information about the scheme.

For more information and details of the scheme please view the Discretionary Rate Relief Policy. (PDF, 244KB, 39 pages).

Supporting small businesses

The supporting small businesses relief will help those ratepayers who as a result of the change in their rateable value at the revaluation are losing some or all of their small business or rural rate relief and, as a result, are facing large increases in their bills. To support 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. 

 Retail Relief 2019/20 and 2020/21

In the Autumn Budget 2018 the Government introduced a new Retail Relief which will be available for the years 2019/20 and 2020/21  

Properties that will benefit from the relief will be occupied hereditaments with a rateable value of less than £51,000, that are wholly of mainly being used as shops, restaurants, cafés and drinking establishments.

The Government considers shops, restaurants, cafés and drinking establishments to mean:

1.    Hereditaments that are being used for the sale of goods to visiting members of the public:

    a. Shops (such as florists, bakers, butchers, off licence, stationers, jewellers, chemists, hardware stores, supermarkets etc.)

    b. Charity Shops

    c. Opticians

    d. Post offices

    e. Furnishing shops/ display rooms (such as carpet shops, double glazing, garage doors)

     f. Car / Caravan show rooms

    g. Second hand car lots

    h. Markets

    i. Petrol Stations

    j. Garden centres

    k. Art Galleries (where art is for sale/hire)

2.    Hereditaments that are being used for the provision of the following services to visiting members of the public:

    a. Hair and Beauty services (hair dressers, nail bars, tanning shops etc.)

    b. Shoe repairs/key cutting

    c. Travel agents

    d. Ticket offices (for example for a theatre)

    e. Dry cleaners

    f. Launderettes

   g. PC/TV/domestic appliance repairs

    h. Funeral directors

    i. Photo processing

    j. DVD/Video rentals

    k. Tool hire

    l. Car hire

3.    Hereditaments that are being used for the sale of food and/or drink to visiting members of the public:

    a. Restaurants

    b. Takeaways

    c. Sandwich shops

    d. Coffee shops

    e. Pubs

    f. Bars

To qualify the hereditament should be wholly or mainly used as shown above, this is a test on use rather than occupation. Therefore hereditaments which are occupied but not wholly or mainly used for a qualifying purpose will not qualify for the relief.

The list below shows some uses that are not considered to be retail use for the purposes of this relief.

1.    Hereditaments that are used for the provision of the following services to visiting members of the public:

    a. Financial services (banks, building societies, cash points, bureau de change, payday lenders, betting shops, pawn brokers)

    b. Other services (estate agents, letting agents, employment agencies)

    c. Medical services (vets, dentists, doctors, osteopaths, chiropractors etc.)

    d. Professional services (solicitors, accountants, insurance agents, financial advisors, tutors etc.)

    e. Post office sorting office

2.    Hereditaments that are not reasonably accessible to visiting members of the public.

The amount of relief available for each property is calculated as approximately 33% of the balance that you would otherwise have to pay. There is no relief available for properties with rateable value greater than or equal to 51,000 and empty properties do not qualify.  

The eligibility for the relief and the relief itself is assessed and calculated on a daily basis. The retail relief will be applied against the net bill after all other reliefs have been applied. 

You can have this relief on more than one property, subject to State Aid De Minimis Regulations. Further information on State Aid law can be found at https://www.gov.uk/state-aid

 

Charitable Discretionary Relief

Charities are entitled to relief from Business Rates on any non-domestic property, which is wholly, or mainly, used for charitable purposes.  Where 80% Mandatory Relief has been granted, the Council has the discretion to remit all or part of the remaining 20% of a Charity’s bill.

The Council has discretion to remit all or part of the bill for certain non-profit making bodies that are not entitled to Mandatory Relief.  The Council’s discretionary rate relief policy has been reviewed due to changes in legislation under the Local Government Finance Bill and the Business Rate Retention Scheme which comes into effect from 1st April 2013. 

Community amateur sports club

With effect from 1 April 2004 the Charity Commissioners now also recognise most community amateur sports clubs as charitable.  Sports clubs will need to be registered with the Inland Revenue and make their facilities available to all members of the public for improving health and fitness.  Guidance notes can be viewed on the Charity Commission website  or by telephoning 0870 333 0123.

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 £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. The 2016 Autumn Statement confirmed the doubling of rural rate relief from 50% to 100% from 1 April 2017. Local authorities will be expected to use their local discount powers to grant 100% rural rate relief to eligible ratepayers from 1 April 2017.

Section 44A Relief

Where part of a property is unoccupied for a short time, the Council can ask the Valuation Officer to apportion the Rateable Value of the property between the occupied and unoccupied parts.  The empty part will receive complete exemption for three months (or six for an industrial property).  After the initial rate-free period expires the occupied business rate will apply to the whole property.  If you wish to apply for part unoccupied rates please send an A4 plan of the property as soon as the area has been cleared highlighting the “empty” areas for which relief is requested to the Non-Domestic Rates (Business Rates)

State Aid guidance

Visit the links below for information on guidance:

 

Hardship

In very exceptional circumstances the council may remit payment of rates where it is satisfied that the ratepayer would sustain hardship if it did not do so and it is reasonable for it to do so having regard to the interests of its council taxpayers.

Qualifying criteria for Hardship Relief

Hardship Relief may be awarded to a limited company as well as to an individual, or groups of individuals in the case of partnerships. A ratepayer may make application for Hardship Relief whether they are subject to either occupied rates or empty property rates.

All relevant factors affecting the ability of a business to meet its liability for rates should be taken into account. The 'interests' of council tax payers may go wider than direct financial interests. For example, where employment prospects in the area would be badly affected by a company going out of business, or where the amenities of an area would be severely affected, for instance, by the closure of the only shop in a village. In order for the council to consider granting hardship relief, an application must be made in writing, including copies of fully audited accounts.

View the Discretionary Rate Relief Policy. (PDF, 491KB, 8 pages)

 

To view  and download application forms please click on the relevant links below:   

 

Properties in disrepair

Generally disrepair does not affect the rateable value of properties.  The rating system normally treats properties as being in a reasonable state of repair, however there are exceptions.

A property might be in disrepair because;

  • It has fallen into disrepair over time;
  • It has been damaged 
  • It has been vandalised 
  • &There has been a fire or a flood.

If work is being undertaken to repair a property and it would be considered economically reasonable then the property is treated as already being in reasonable repair for rating purposes.

Depending on the extent of the work being undertaken to improve, extend or enhance a property, it may be that the valuation can be reduced to nil, whilst the works are underway, however the work must be much more than repairs.  A reduction will usually be appropriate only when the works are to create a materially different property to the one that currently exists and at the point where the cost to restore the property to its original use is no longer economic in relation to its rateable value.  You should contact the Valuation Office as soon as possible and provide all the evidence which supports your view that the property is in a state of substantial disrepair so that the valuation officer can investigate the situation.  An inspection by the valuation officer may be required.  

For further information visit the VOA website or Tel: 03000 501501 or email: ratingsouthwest@voa.gsi.gov.uk.