Non-Domestic Rates
Non-Domestic Rates, or Business Rates, collected by local
authorities are the way that those who occupy non-domestic property
contribute 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 authorities as part
of the annual formula grant settlement. The money, together with
revenue from council tax payers, revenue support grant provided by
the Government and certain other sums, is used to pay for the
services provided by your local authority and other local
authorities in your area.
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, available on the
VOA website at
www.voa.gov.uk.
The rateable value of your property is shown on the front of this
bill. This 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 2005, this date was
set as 1st April 2003.
The valuation officer may alter the value if circumstances change.
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 about the grounds on
which appeals may be made and the process for doing so can be found
on the VOA website or from your local valuation office.
National Non-Domestic Rating
Multiplier
The local authority works out the Business Rates bill by
multiplying the rateable value of the property by the appropriate
multiplier. There are 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, except in the City of London where
special arrangements apply, according to formulae set by
legislation. The multipliers change each year in line with
inflation and to take account of the cost of small business rate
relief. In the year of a revaluation, the multipliers are set at a
level which will keep the total amount raised in rates after the
revaluation the same as before, plus inflation for that year. The
current multipliers are shown on the front of your bill.
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, limites 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 2005, 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.
Further information about transitional arrangements and other
reliefs may be obtained from [insert name of billing authority] or
the website
www.mybusinessrates.gov.uk.
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 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.
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 to award relief in respect of the
unoccupied part. Full details can be obtained from the local
authority.
Small Business Rate Relief
The relief is only available to ratepayers who apply to their local
authority and who occupy either -
(a) one property, or
(b) one main property and other additional properties providing
those additional properties each have a rateable value of less than
£2,200.
The rateable value of the property mentions in (a) or the aggregate
rateable value of all properties mentioned in (b), must be under
£15,000 outside London or £21,500 within London, including on 1st
April each year.
Ratepayers who satisfy these conditions will have the bill for
their single or main property calculated using the lower small
business no n-domestic rating multiplier rather than the ordinary
non-domestic rating multiplier that is used to calculate the
liability 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
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 £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 –
(a) the ratepayer taking up occupation of a property they did not
occupy at the time of making their application for relief;
and
(b) 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 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
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 Registered 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 Club and is wholly or mainly used for charitable
purposes or as a Registered Community Amateur Sports Club.
The local authority has discretion to give further relief to
Non-Profit Making Organisations. 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 3000 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.
Full details can be obtained from the local authority.
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.
Hardship Relief
The local authority has discretion to give relief in special
circumstances. Full details can be obtained from the local
authority.
Rating advisers
Ratepayers do not have to 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 represented should be aware that members
of the Royal Institution of Chartered Surveyors (RICS – website
www.irrv.org.uk) 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 , if
necessary, seek further advice before entering into any
contract.