What are Business Rates?

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. Under the business rates retention arrangements introduced from 01 April 2013, authorities keep a proportion of the business rates paid locally.

This provides a direct financial incentive for authorities to work with local businesses to create a favourable local environment for growth since authorities will benefit from growth in business rates revenues. The money, together with revenue from council tax payers and certain other sums, is used to pay for the services provided by local authorities in your area. Further information about the business rates system, including transitional and other reliefs, may be obtained at www.gov.uk.

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. They draw up and maintain a full list of all rateable values, available at www.gov.uk/government/organisations/valuation-office-agency. The rateable value of your property is shown on the front of your 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 2017, this date was set as 1st 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 request a change to the value shown in the list if they believe it is wrong, through the reformed Check, Challenge, Appeal (CCA) process introduced in April 2017. Full details on the CCA process are available from the VOA or from www.gov.uk. Your billing authority can only backdate any business rates rebate to the date from which any change to the list is to have effect.

Further information about the grounds on which appeals may be made and the process for doing so can be found on the www.gov.uk website.

You can find and review your rateable value on the VOA's website. If you have reason to believe that your 2017 rateable value is not correct, follow the instructions provided on the site. You will need to do the following (available from 1 April 2017):

• CHECK - review and confirm the facts about your property held by the VOA
• CHALLENGE - once the facts are established, explain why you believe your valuation is wrong.

An appeal on your 2017 rateable value is not possible, and may not be necessary, until you have completed CHECK and CHALLENGE.

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. The current multipliers are shown on the front of your bill.

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. Similarly, the change in the revaluation date to 2017 has no effect on the total amount of revenue raised from business rates. The current multipliers are shown on the front of your bill.

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, please contact us.

2017 Revaluation and Transitional Arrangements

All rateable values are reassessed at a general revaluation. The most recent revaluation took effect from 1st April 2017. 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.

A £3.6 billion transitional relief scheme limits changes in rate bills as a result of the 2017 revaluation. To help pay for the limits on increases in bills, there are also 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.

More information on the 2017 revaluation can be found at www.gov.uk/introduction-to-business-rates/revaluation.

Unoccupied Property Rating: about empty property and Business Rates

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. 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 unoccupied property rate. Full details on exemptions can be obtained from the local authority.

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:

1. The rateable value of the property is less than £2,900.  From 01 April 2017 the rateable value of the empty property must be less than £2,900 to be exempt
2. The owner is prohibited by law from occupying the property or allowing it to be occupied
3. 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
4. The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979
5. 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
6. The owner is entitled to possession only in his capacity as the personal representative of a deceased person
7. 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

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. Full details can be obtained from the local authority.

Small Business Rate Relief (SBRR)

Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to other mandatory relief or are liable for unoccupied property rates) will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.

In addition, generally, if the sole or main property is shown on the rating list with a rateable value which does not exceed £15,000, the ratepayer will receive a percentage reduction in their rates bill for this property of up to a maximum of 100% for a property with a rateable value of not more than £12,000, the ratepayer will receive a 100% reduction in their rates bill.

Generally, 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 £2,899

The aggregate rateable value of all the properties mentioned in (b) must not exceed £19,999 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. 

The Government has introduced additional support to small businesses. For businesses that take on an additional property which would normally have meant the loss of the Small Business Rate Relief, the Government has confirmed that they will be allowed to keep that relief for a period of 12 months.

Where a ratepayer meets the eligibility criteria and has not received the relief they should contact us. 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 Hastings Borough Council by the 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.

Discretionary Rate Relief: new policy from 2013/14

The Council has reviewed its policy and procedures for awarding Discretionary Rate Relief to Charitable and non-profit organisations. At the Cabinet meeting on 04 February 2013 it was agreed to make revisions to the policy.

Charities:

• Relief to be granted at 10% instead of 20% (80% Mandatory relief still applies)
• No relief for shops - except where the profits generated can be shown to be used mainly for the benefit of Hastings residents
• No relief for premises used for warehouse/storage purposes

Community Amateur Sports Clubs:

• Relief to be granted at 10% instead of the 20% (80% Mandatory relief still applies)

Other premises:

• Relief to be granted at 50%
• In addition the Council will provide 100% to those organisations in receipt of Community Partnership Funding and where organisations directly save the Council money (but not in respect of a charity shop or warehouse)

Principles

The following principles and criteria have been adopted in order to guide the determination of all discretionary rate relief applications from 01 April 2013. Applicants also need to show how their current activities meet the corporate objectives. For the purposes of this policy the council's corporate objectives have been summarised as:

1. Employment, Economic Growth, Economic Inclusion - services that seek to overcome the barriers that prevent people from participating fully in the workplace. Providing services to people in most need of support to access work and training
2. Equality and an Inclusive Supportive Community - Organisations, clubs and societies which provide services and facilities, those which target low income families; work in areas of disadvantage; and demonstrate inclusive practice

Applications must provide details of their activities within the relevant areas and the level of this service provision that directly benefits Hastings residents so that full consideration to the application can be given.

General criteria

• The organisation must encourage membership from the sections of the community where participation is disproportionately low, (e.g. older people, people with disabilities, unemployed people, black and minority ethnic communities etc.), or the purpose of the organisation being to assist such groups
• In respect of clubs and accessibility, membership must generally be open to all Hastings residents
• Priority for relief will to be given to those organisations where the granting of relief directly saves the Council money, thus freeing up resources to spend elsewhere
• Priority for relief will be given to those organisations or services which provide or enable care and assistance to those in priority need
• The Council will generally only consider providing discretionary rate relief to sports clubs that do not have paid staff (other than coaching staff), and which would not be viable without the relief being granted by the Council. The Council will generally not award relief where there is a bar and staff are paid either in money or kind

The Council will generally not award relief to the following types of organisations:

• Charity shops and shops operated by trading arms of charities - except where the profits generated can be shown to be used mainly for the benefit of the residents of Hastings (in which case discretionary relief will be awarded at 50%)
• Premises mainly used for storage
• Premises used mainly for religious worship
• Overseas Aid organisations
• Administration offices for national charities
• Social Clubs
• Private nurseries, schools, academies, colleges and other educational establishments

New applications for Discretionary Rate Relief

Use this form for new applications for Discretionary Rate Relief:

• Discretionary Rate Relief (.pdf 90KB)

Charity and Registered Community Amateur Sports Club Relief (CASC)

Charities and registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the charity or the club, 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 club (or of that and other clubs). Hastings Borough Council has discretion to give further relief on the remaining bill.

Relief for Local Newspapers

The Government is providing funding to local authorities so that they can provide a discount worth up to £1,500 a year on office space occupied by local newspapers. This was due to run for 2 years from 1st April 2017. At Autumn Budget 2018, the Government extended the scheme for an additional year (2019/20). This scheme provides 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 a business rates relief for local newspapers.

Spring Budget 2017 Relief Scheme: Supporting Small Business

Ratepayers losing Small Business or Rural Rate Relief as a result of the 2017 revaluation will have their increases limited to the greater of either (i) a cash value of £600 per year, or
(ii) the matching cap on increases for small properties in the transitional relief scheme. This relief will run for 5 years to 31st March 2022 and ratepayers will receive the relief until this date or they reach what their bill would have been within the relief scheme, whichever is first.

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Further information can be obtained from your local authority.

Spring Budget 2017 Relief Scheme: Discretionary Scheme

The Government is providing £300 million of funding to local authorities over 4 years to 31st March 2021 to provide discounts to ratepayers in their area on a discretionary basis. Each authority has been allocated a share with which to design and implement a scheme to deliver targeted support to ratepayers. The £300m will cover the 4 years from 2017/18: £175m in 2017/18; £85m in 2018/19; £35m in 2019/20 and £5m in 2020/21.

Local authority allocations can be found at:
https://www.gov.uk/government/consultations/discretionary-business-rates-relief-scheme

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Further information can be obtained from your local authority.

Retail Discount

At Autumn Budget 2018, the Government announced a one-third discount for eligible retail businesses with a rateable value of less than £51,000, up to state aid limits. This scheme will run for two years from April 2019. This discount will be applied to the bill after the application of any reliefs, excluding any local discounts.

The Government has issued guidance on the operation of the scheme, which can be found at: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance.

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Further information can be obtained from the local authority.

Local discounts

Local authorities have a general power to grant discretionary local discounts. Please contact us for further information.

State aid

The award of such discounts 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 'de minimis' aid 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 local authority immediately with details of the aid received.

Hardship Relief

Hastings Borough Council has discretion to give relief in special circumstances.  

Rating Advisers

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) and the Institue of Revenues, Rating and Valuation (IRRV) 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.

Visit www.rics.org and www.irrv.org.uk for further information.

Information supplied with Demand Letters

Information relating to the relevant and previous financial years in regard to the gross expenditure of Hastings Borough Council is available on our Budgets and Finance page. A hard copy is available on request by writing to the council or calling 01424 451081.