The Non-Domestic Rates, or Business Rates, collected by local councils is the way that businesses and others who occupy non-domestic property make a contribution towards the cost of local services. Under the business rates retention arrangements introduced on 1 April 2013, the Council keeps a proportion of the business rates paid locally. The money that is retained is apportioned between the District Council, the County Council and the Fire Authority. This provides a direct financial incentive for the District Council and the County Council to work with local businesses to create a favourable environment for growth as they will both benefit from growth in business rates revenue. This 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 council and other local authorities in your area. For more information on business rates and how they are spent, download our Explanatory Notes Leaflet.
Apart from properties that are exempt from Business Rates, each non-domestic property has a rateable value. This is set by the valuation officers of the Valuation Office Agency (VOA), an Agency of HM Revenues & Customs. The VOA draws up and maintains a full list of all rateable values, which are available at Valuation Office Agency website. The rateable value of your property is 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 comes into effect on 1 April 2017, this date was set as 1 April 2015.
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 if they believe it is wrong. Further information on the grounds for making an appeal, and on how to make one, can be found on the Valuation Office Agency website or from your local valuation office at Valuation Office Agency, Rosebery Court, Central Avenue, St Andrews Business Park, Norwich NR7 0HS. Telephone 03000 501 501. Billing authorities can only backdate any business rates rebate to the date from which any change to the list is to have effect.
The Valuation Office Agency will continue to fulfil their legal obligations to alter rating assessments if new information comes to light indicating the valuation is inaccurate.
National Non-Domestic Rating Multiplier
The local council works out the business rates bill by multiplying the rateable value of the property by the multiplier or "poundage". Central Government sets the multiplier from 1 April each year for the whole of England. The Government normally changes the multiplier every year in line with inflation. By law, the multiplier cannot go up by more than the rate of inflation, except in the year of a revaluation when it is 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. From 1st April 2018 the multiplier will be 49.3p with the Small Business Rate multiplier set at 48p.
Business Rates Instalments
Payment of business rate bills is automatically set on a 10-monthly cycle. However, the Government has put in place regulations that allow businesses to require their local authority to enable payments to be made through 12 monthly instalments. If you wish to take up this offer, you should contact the Business Rates Team as soon as possible. Contact details are shown on your bill.
Every five years the Valuation Office Agency (VOA) gives all non-domestic (business) properties new rateable values so local authorities can work out the business rates. The new rateable values will broadly reflect the yearly open-market rental value of each property. The purpose of the revaluation is not to change the amount of money collected in rates nationally, but to make sure that individual rateable values reflect the changes that have taken place in the property market since the last revaluation. The new rateable values for the 2017 revaluation come into effect on 1st April 2017 and are available on the Valuation Office Agency website.
Whilst the 2017 revaluation will not increase the amount of rates collected nationally, within this overall picture, over 7 out of 10 ratepayers will receive a reduction or no change in their bill and some ratepayers will see increases.
For those that would otherwise see significant increases in their rates liability, the Government has put in place a £3.6 billion transitional relief scheme to limit and phase in changes to rate bills as a result of the 2017 revaluation. To help pay for the limits on increases to 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 1st April 2017, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to your bill as a result of other reasons (such as changes to the amount of small business rate relief) are not covered by the transitional arrangements. The transitional arrangements are applied automatically and are shown on the front of your bill.
It is important to realise that any reduction in the gross charge arising from a successful appeal against your rateable value may lead to an equal loss in your transitional relief award. Consequently the amount you pay may remain the same until you no longer qualify for transitional relief
Further information about transitional arrangements may be obtained from the Business Rates Team or the Government's website.
Unoccupied Property Rates
Property that has been empty for more than three months, or in the case of industrial property, for more than six months, no longer receives relief from Business Rates.
Commercial property such as shops and offices are exempt from rates for up to 3 months if empty. After 3 months if they remain empty they are subject to 100% charge.
Industrial premises i.e warehouses, factories and stores are exempt for up to 6 months if empty and they are then subject to 100% charge.
From 01/04/2017 properties with a rateable value of less than £2,900 are not subject to an empty rate charge. This means that empty non domestic properties with a rateable value of £2,900 and above will be liable to a 100% charge after the empty period applicable to the type of property involved - see above.
Property held by a charity or a community amateur sports club are not subject to an empty rate charge if when next in use the property continues to be occupied by a charity or community amateur sports club.
Listed Buildings are not subject to an empty rate charge.
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 period of time the local authority has discretion in certain limited cases to award relief in respect of the unoccupied part. Full details can be obtained from the Business Rates team. There are details on s44a relief in our discretionary policy too.
Charitable and Discretionary Relief
Registered Charities are entitled to relief from rates on any non-domestic property that is wholly or mainly used for charitable purposes. Relief is given at 80% of the bill. Local councils have discretion to give further relief on the remaining bill. Authorities also have discretion to give relief on all or part of any rate bill for property occupied by certain non-profit making bodies. They can also consider giving rate relief in cases of hardship or where part of a property is beyond use for a certain period.
Rate relief for community amateur sports clubs
Registered community amateur sports clubs (CASCs) can receive 80% rate relief.
To qualify as a CASC, a sports club must:
- be open to the whole community;
- be run as an amateur club;
- be a non-profit-making organisation
- aim to provide facilities for, and encourage people to take part in, eligible sport.
If you are a sports club which has not yet registered as a CASC and are interested in the registration process, please see www.inlandrevenue.gov.uk/casc/index.htm or call the Inland Revenue Sports Clubs Unit on 0300 123 1073.
Rate relief for businesses in rural areas
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 with a rateable value of less than £8,500 ("food shop" means a trade or business consisting wholly or mainly for the sale by retail of food for human consumption excluding confectionary and catering - in this context catering means any supply of food for consumption on the premises on which it is supplied and any supply of hot food for consumption off the premises) 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 council 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 1st April 2017. Local councils will be expected to use their local discount powers to grant 100% rural rate relief to eligible ratepayers from 1st April 2017.
The local council may decide to give up to 100% relief to any other business in such rural village, with a rateable value of up to £16,500, if it is satisfied that the business is of benefit to the community and having regard to the interests of its council taxpayers.
Small Business Rate Relief
With effect from 1st April 2017:
- Businesses who occupy one property in England which has a rateable value of less than £15,000.
- Businesses who occupy one main property in England with a rateable value of less than £15,000 and other additional properties provided that those properties have rateable values of less than £2,900 with the total rateable value of all properties being under £20,000.
- Businesses occupying only one property in England where the rateable value is above £14,999 but below £51,000 are not entitled to relief but the small business rate multiplier will automatically be used to calculate their liability.
- Ratepayers can only claim relief in respect of one property.
- Ratepayers can only claim relief in respect of an occupied property.
- Ratepayers must meet the criteria on every chargeable day for which they claim relief.
The Small Business Rates multiplier for 2017/18 is 46.6p.
Properties with a rateable value between £12,000 and £14,999 are entitled to relief which is on a sliding scale. The relief reduces by 1% for every £30 Rateable Value from 100% at £12,000 to 0% at £15,000.
With effect from the 14th February 2014 businesses that take on an additional property which would normally have meant the loss of Small Business Rate Relief will be allowed to keep the relief for a period of 12 months from the date of the change. The combined Rateable Value limit of 20,000 still applies.
Applying for Small Business Rate Relief.
Please contact the Council if you think that you qualify for this relief. You can call us on 01954 713112 / 713409 or email NNDR@scambs.gov.uk. We are able to consider backdated applications although these may, in some cases, be limited by legislation.
Changes in Circumstances.
If you qualify for and have been awarded Small Business Rate Relief certain changes in circumstances must be notified to the Council. The changes which must be notified are:
- the ratepayer takes up occupation of an additional property (relief will continue for 12 months after taking on an additional property which has a Rateable Value within existing relief criteria).
- An increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the Council which granted the relief.
Supporting Small Businesses (SSB) Relief
In the Spring Budget, the Chancellor announced a new relief scheme would be made available to those ratepayers facing large increases as a result of the loss of small business rate relief or rural rate relief.
The transitional relief scheme does not alter in light of changes in relief. As such, ratepayers losing some or all of their small business rate relief or rural rate relief may have large increases in their April 2017 bills.
Supporting small businesses relief has been introduced to assist those ratepayers who, after revaluation, find they have lost some or all of their small business or rural rate relief and have a large increase on their bill. To support these ratepayers, the supporting small businesses relief will ensure that the increase per year is limited to the greater of:
- a cash value of £600 per year (£50 per month). This cash increase ensures that ratepayers who for the 2016/17 liability period either paid nothing or very small amounts, are brought into paying something,
- the matching cap on increases for small properties in the transitional relief scheme.
The Council has already applied this relief to those that meet the criteria, in line with Government guidelines. If you feel that you qualify for this relief but it is not showing on your bill, please contact the Business Rates Team.
Revaluation Relief (Local Discretionary Scheme)
In the Spring Budget, the Chancellor announced that the Government would establish a £300m discretionary fund over four years from 2017/18 to support those businesses that face the steepest increases in their business rates bills as a result of the revaluation.
The total amount of funding to be allocated to South Cambridgeshire District Council's ratepayers is £894,000 over four years, in the following proportions: 2017/18 - £495,000, 2018/19 - £241,000, 2019/20 - £99,000, 2020/21 - £14,000
In what circumstances might relief be awarded?
Ratepayers are invited to apply for relief where they have experienced an increase in RV due to revaluation, subject to the following criteria.
- The ratepayer must have had a rates liability on or before 31st March 2017
- The property RV, or a combined total of all property RVs in the district, must be less than £200,000
- The 2017/18 charge must have increased by more than 10% due to revaluation.
Relief will generally not be awarded in the following circumstances:
- National chains, groups, franchises, multi-nationals or any business operating over more than 5 hereditaments.
- Those already in receipt of mandatory or discretionary rate relief.
- Empty properties, unless exceptional circumstances apply.
- State funded organisations such as schools, hospitals etc.
Ratepayers that find themselves in hardship due to Revaluation but do not meet the criteria may still be able to apply for some additional support. An allocation of £50,000 has been put aside in 2017/18 for this purpose. Any applications for this relief must be able to demonstrate the negative impact of revaluation, any applications would be considered on a case by case basis.
Amount of award
The amount awarded will depend on the individual circumstances. However as a guide, the following principles will apply:
A) Where the 2017/18 net rates increase is between 10 - 20% compared to the previous year, the total amount awarded will not normally exceed 5% of the net charge.
B) Where the 2017/18 net rates increase is greater than 20% compared to the previous year, the total amount awarded will not normally exceed 10% of the net charge.
The relief is subject to the State Aid De Minimis levels and a signed declaration will be required on all applications.
How will a decision be made?
Every application will be considered on its merits and will need to be submitted in writing using the Council's application form. All decisions for Revaluation Relief and Revaluation Hardship Relief will be made by the Finance and Staffing Portfolio Holder.
Relief for Public Houses
At Spring Budget 2017, the Chancellor announced a £1,000 business rate discount for public houses with a rateable value of up to 100,000. The relief is for one year from 1 April 2017 and will end on 31 March 2019.
Who qualifies for the relief?
To be eligible for this relief the pub should:
- be open to the general public
- allow free entry other than when occasional entertainment is provided
- allow drinking without requiring food to be consumed
- permit drinks to be purchased at a bar
For the purpose of this relief pubs are not any of the following:
Restaurants, Cafes, Nightclubs, Hotels, Snack Bars, Guesthouses, Boarding Houses, Sporting Venues, Music Venues, Festival Sites, Theatres, Museums, Exhibition Halls, Cinemas, Concert Halls and Casinos.
Please contact the Business rates team at email@example.com if you feel you meet the criteria and have yet to receive an application form.
Relief for Local Newspapers
The Government is providing funding to local councils so that they can provide a discount worth up to £1,500 a year for 2 years from 1st April 2017, to office space occupied by local newspapers. This is up to a maximum of one discount per local newspaper title and per hereditament, and up to state aid limits. The relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988) Eligibility criteria for this relief is set out in a guidance note: "The case for business rates relief for local newspapers", which can be obtained at: https://www.gov.uk/government/consultations/the-case-for-a-business-rates-relief-for-local-newspapers
The award of Discretionary Relief is considered likely to amount to state aid. However it will be state aid compliant where it is provided in accordance with the De Minimis Regulations EC 1407 / 2013. The De Minimis Regulations allow an undertaking to receive up to 200,000 Euros over a rolling three year period. If you are receiving, or have received, any 'de minimis' aid granted during the current or two previous financial years (from any source), you should inform the council immediately with details of the aid received.
Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. However, ratepayers who do wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors (RICS - www.rics.org) and the Institute of Revenues Rating and Valuation (IRRV - www.irrv.net) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct. Before you employ a rating advisor, 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.
If you appeal against your rateable value
Until your appeal is settled you should pay the full amount shown on your rate demand notice. Any overpayment resulting from a subsequent reduction will be refunded and interest may be added to the refund but only if payments have been made strictly in accordance with the regulations for the payment of Non-Domestic Rates.
Any reduction in your gross charge resulting from a successful appeal against your rateable value may lead to an equal loss in transitional relief. The amount you are required to pay therefore may not change until you no longer qualify for transitional relief.
If you require any additional explanation regarding how your Annual Charge has been calculated, including any Transitional Adjustment, please contact us 01954 713112 or 713409 or 713114