Business Rates: Reductions
Business owners may be eligible for reductions in their business rates. Examples of reductions are transitional relief, empty properties, charity relief and hardship 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 for 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.
Properties with a rateable value below £2,600 are exempt from empty property rates.
In addition, there are a number of exemptions from the unoccupied property rate. For further details about exemptions, please contact us using the details on the back of your bill. 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 Government is introducing a new temporary measure for unoccupied new builds from October 2013. Unoccupied new builds will be exempt from unoccupied property rates for up to 18 months (up to state aid limits) where the property comes on to the list between 1 October 2013 and 30 September 2016. The 18 month period includes the initial three or six month exemption and so properties may, if unoccupied, be exempt from non-domestic rates for up to an extra 15 or 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 to award relief on the unoccupied part. This relief will last either three or six months depending on the type of property.
Small business rate relief (occupied properties only)
Ratepayers who are not entitled to another mandatory relief, or are liable for unoccupied property rates and occupy a property with a rateable value which does not exceed £25,499, will have the bill for their 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. There is no need to make an application for this relief, it will be automatically applied to your account and will be shown on your bill.
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 100 per cent for a property with a rateable value of not more than £6,000.
This level of relief is a temporary increase for the financial year 2013/14 only
This percentage reduction (relief) is only available to ratepayers who occupy either (a) one property, or (b) 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 the properties mentioned in (b), must not exceed £25,499 in London on each 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.
An application for Small Business Rate Relief is not required. Where a ratepayer meets the eligibility criteria and has not received the relief they should contact their local authority. Provided the ratepayer continues to satisfy the conditions for relief, which apply at the relevant time as regards the property and the ratepayer, they will automatically continue to receive 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
Charity and Community Amateur Sports Club (CASC) relief
Registered charities and registered community amateur sports clubs are entitled to 80 per cent mandatory relief where the property is occupied by the charity or club and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or as a registered community amateur sports club. The Council also has the discretion to give further relief on the remaining bill.
If you wish to apply for Discretionary relief then you can download the application form here Mandatory Rate Relief application form
Non-profit making organisations
The Council has the discretion to give relief to non-profit making organisations who are not eligible for 80 per cent mandatory relief. If you would like further information, please contact us using the details on the back of your bill.
Hardship relief for non-domestic property is intended to assist a business recover from a temporary crisis, financial or otherwise, as a result of exceptional circumstances. We would normally require detailed information as to what has caused the hardship, what measures have been taken so far to rectify the position, and what plans are in place for the future.
What is meant by ‘hardship’?
There is no definition in the legislation for ‘hardship’ and as the scheme is aimed at covering unforeseen events, it is not possible for us to list precise criteria. However, a 'crisis' would have to result in a serious loss of trade or have a major effect on the services that can be provided.
'Exceptional circumstances' will usually be circumstances that are outside the control of the business or organisation and are beyond the normal risks faced by businesses. The effect of strikes within a business or organisation, increased running costs and increased competition would not be considered as 'exceptional circumstances' as they are normal business risks.
As a general rule, circumstances that would be covered by a commercial insurance policy or by compensation from public funding would not be considered as 'exceptional circumstances'. However, each case will be considered on its own merits.
What type of property does Hardship Relief apply to?
Most non-domestic properties, including those owned or used by voluntary organisations, will be eligible for hardship relief if they meet certain conditions. However, properties such as car parks, advertising hoardings, telecommunications masts and towers, and cash machines (ATMs) will not be eligible.
How do I apply?
You will need to supply the relevant business accounts along with an explanation as to the nature of the hardship. You should also provide a Business Recovery Plan to demonstrate how the business is to improve and the anticipated time frames involved. All applications must be in writing.
Cancellation of backdated rates liability
The Government has put in place regulations to allow for the cancellation of certain backdated business rates liabilities. The relevant regulations, the Non-Domestic Rating (Cancellation of Backdated Liabilities) Regulations 2012 (SI 2012/ 537), can be found online at www.legislation.gov.uk
Information on the type of backdated rates liability that can be cancelled is available here.
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 wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors
(www.rics.org) and the Institute of Revenues Rating and Valuation (www.irrv.org.uk) are qualified and regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser, you should check 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.
For further information relating to Business Rates, please see Business Rates: What you need to know.