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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.
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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. The rateable value of your property 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 01 April 2010, this date was set as 01 April 2008.
The valuation officer may alter the value if circumstances change. The ratepayer (and certain others who have an interest in the property) can appeal against the value if they believe it is wrong. Information about the grounds on which appeals may be made and the process for doing so can be found on the VOA website or contact us for further information.
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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. Except in the City of London where special arrangements apply, the Government sets the multipliers for each financial year for the whole of England according to formulae set by legislation. Between revaluations 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 revaluation the multipliers are rebased to account for overall changes to total rateable value and to ensure that the revaluation does not raise extra money for Government. The current multipliers are shown on your bill.
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Revaluation 2010 and Transitional Arrangements
All rateable values are reassessed every five years at a general revaluation. The current rating list is based on the 2010 revaluation.
Five-yearly revaluations make sure each ratepayer pays their fair contribution and no more, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others. Revaluation does not raise extra money for Government.
Whilst the 2010 revaluation will not increase the amount of rates collected nationally, within this overall picture, over a million properties will see their business rate liabilities reduced 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 £2 billion transitional relief scheme to limit and phase in changes in rate bills as a result of the 2010 revaluation. 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 01 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.
Changes to your bill as a result of other reasons (such as because of 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.
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Unoccupied Property Rating: About empty property and Business Rates
Bringing vacant properties back into use
For the first three months that a business property is empty, we do not charge business rates for the property. For industrial and warehouse property the rate-free period is six months.
After this, a 100% business rate charge applies to most properties that have been empty for three months or more, or six months or more in the case of industrial and warehouse property.
This is to bring vacant shops, offices, factories and warehouses back into use. The idea is to encourage owners to re-let, redevelop or sell unused property; improving access to premises and reducing rents for businesses, as well as reducing the need for development on greenfield land.
Are there any exemptions from this charge?
After the initial three or six month rate free period expires, empty property is liable for 100% of the basic occupied business rate unless:
- The rateable value of the property is less than £18,000. From 01 April 2011 the rateable value of the empty property must be less than £2,600 to be exempt
- The owner is prohibited by law from occupying the property or allowing it to be occupied
- The property is kept vacant because of action taken by or on behalf of the Crown, or any other local or public authority, to prohibit occupation of the premises or acquisition of them
- The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979
- The property is the subject of a building preservation notice within the meaning of the Planning (Listed Buildings and Conservation Areas) Act 1990 or is included in a list compiled under section 1 of that Act
- The owner is entitled to possession only in his capacity as the personal representative of a deceased person
- One of the following insolvency or debt administration situations exists:
- A bankruptcy order within the meaning of section 381 (2) of the Insolvency Act 1986
- The owner is entitled to possession of the property in his capacity as trustee under a deed of arrangement to which the Deeds of Arrangement Act 1914 applies
- The owner is a company subject to a winding-up order made under the Insolvency Act 1986 or which is being wound up voluntarily under that Act
- The owner is entitled to possession of the property in his capacity as liquidator under s112 or s145 of the Insolvency Act 1986
- The owner is a company in administration under the Insolvency Act 1986 or is subject to an administration order
There are also no business rates to pay on an empty property if:
- It is held by a charity and appears likely to be next used for charitable purposes
- It is held by a community amateur sports club and appears likely to be next used for the purposes of the club
Can I have my property removed from the rating list?
If your property is in poor condition and cannot be economically repaired, the Valuation Officer may decide that it should be taken out of the rating list altogether.
You can contact the Valuation Officer via the Valuation Office Agency website or telephone 03000 5000 50.
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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 in certain cases to award relief in respect of the unoccupied part.
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Small Business Rate Relief (SBRR)
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 £17,999 outside London or £25,499 in London will have their bill calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.
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 50% for a property with a rateable value of not more than £6,000. 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 £17,999 outside London or £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 elief in each new valuation period.
Certain changes in circumstances will need to be notified to the local authority by a ratepayer who is in receipt of relief (other changes will be picked up by the local authority). The changes which should be notified are:
- (a) the ratepayer taking up occupation of an additional property, 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
Temporary increase in Small Business Rate Relief
The Government has temporarily increased the level of relief so that eligible ratepayers will pay no rates on properties with rateable values up to £6,000, with a tapered relief of between 100%and 0% for properties with rateable values between £6,001 and up to £12,000. The new levels of relief which were due to end on 30 September 2011 have now been extended to 31 March 2013. If relief is granted, 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 not need to reapply for relief in each new valuation period.
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Charity and Registered Community Amateur Sports Club Relief
Charities and registered CASCs are entitled to 80% relief where the property is occupied by the charity or the CASC, and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the CASC (or of that and other CASCs). Hastings Borough Council also has discretion to give further relief on the remaining bill.
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Non-Profit Making Organisation Relief
The local authority has discretion to give relief to Non-Profit Making Organisations.
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Hardship Relief
Hastings Borough Council has discretion to give relief in special circumstances.
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Rating Advisers
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 Institution of Chartered Surveyors and the Institute and Revenues and Rating 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.
