Budget Announcement: Further one-year increase of Small Business Rate Relief

The Chancellor announced at the budget on 23 March 2011 that the current temporary increase in small business rate relief, which started on 1 October 2010 and was due to end on 30 September 2011, will continue for a further year (1 October 2011 to 30 September 2012).

The measure doubles the usual rate of relief so that ratepayers with rateable values below £6,000 pay no rates at all for the period, while ratepayers with rateable values between £6,000 and not more than £12,000 receive tapered relief from 100% to 0%. There will be no adjustment to the multiplier.

The Government is aiming to make the necessary changes to the legislation by the summer and once in place, we will be able to adjust the bills of eligible ratepayers.   
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Non-Domestic Rates
Non-Domestic Rates are collected by billing authorities (district and London borough councils, the Common Council of the City of London, the Isle of Wight Council and the Council of the Isles of Scilly) are, subject to special arrangements for the City of London, paid into a central pool and redistributed to billing authorities and major precepting authorities. Your authority's share of
redistributed rate income, together with income from its council taxpayers, revenue support grant provided by the Government and certain other sums, is used to pay for the services provided by your authority and other local authorities in your area.

Rateable Value
The rateable value of non-domestic property is fixed in most cases by an independent valuation officer of the Valuation Office Agency. All non-domestic property is revalued every five years. From 1st April 2010, the rateable value of a property represents its annual open
market rental value as at 1st April 2008. The values of all property, in respect of which rates are payable to your authority, are shown in the local rating list, a copy of which may be inspected at the Valuation Office, 34 Southway, Colchester, CO2 7BB or on the Valuation Office Agency website or Braintree District Council.

The Valuation Officer may alter the value, if he believes that the circumstances of the property have changed. The ratepayer (and certain others, who have an interest in the property) may also in certain circumstances propose a change in value. If in any case the ratepayer and the Valuation Officer do not agree, the matter will be referred as an appeal to a valuation tribunal. The effect of successful proposals or appeals against new rateable values for 1st April 2000 will be backdated to 1st April 2000 only if they were made by 30th September 2000. Appeals made in the next six months will be backdated to no earlier than 1st October 2000. Appeals made in a subsequent financial year will be backdated to no earlier than the start of that year.

Information about the circumstances, in which a change in rateable value may be proposed and how such a proposal may be made, is available from the Valuation Office shown above. Further information about the new appeals arrangements may be obtained from Braintree District Council, or on the web at www.voa.gov.uk/

National Non-Domestic Rating Multiplier
The national non-domestic rating multiplier is the rate in the pound by which, outside the City of London where special arrangements apply, the rateable value is multiplied to produce the annual rate bill for a property. It is set annually by the Government and except in a revaluation year, cannot, by law, rise by more than the amount of the increase in the retail prices index. The national rate multipliers are set out below: 

1993/94 - 41.6p
1994/95 - 42.3p
1995/96 - 43.2p
1996/97 - 44.9p
1997/98 - 45.8p
1998/99 - 47.4p
1999/2000 - 48.9p
2000/2001 - 41.6p
2001/2002 - 43.0p
2002/2003 - 43.7p
2003/2004 - 44.4p
2004/2005 - 45.6p
2005/2006 - 42.2p (41.5p Small Business multiplier)
2006/2007 - 43.3p (42.6p Small Business Multiplier)
2007/2008 - 44.4p (44.1p Small Business Multiplier)
2008/2009 - 46.2p (45.8p Small Business Multiplier)
2009/2010 - 48.5 (48.1 Small Business Multiplier)
2010/2011 - 41.4 (40.7 Small Business Multiplier)
2011/2011 - 43.3 (42.6 Small Business Multiplier)

Transitional Arrangements
Transitional arrangements will phase in the effect of significant changes in liability, which arise from the 5 yearly revaluation of non-domestic property. Where appropriate, these arrangements will operate until March 2010 (when all non-domestic property will be revalued again). There are limits on the percentage by which bills may increase or decrease each year. Special rules deal with changes in rateable values and the merger or splitting of existing properties.

Further information about transitional arrangements may be obtained from the leaflet which will accompany your 2010/2011 annual bill, Braintree District Council Revenues Section or on the web at www.voa.gov.uk/

Small Business Rate Relief
This is a relief which was introduced by Government with effect from 1st April 2005.

From 1 April 2010 the thresholds for the relief increase as follows:

all eligible properties of up to £17,999 rateable value (RV) outside London, or £25,499 RV within London, will have their rates calculated using the Small Business Rate Relief (SBRR) multiplier;

additional properties of up to £2,599 RV will be ignored in considering entitlement to SBRR, as long as the combined rateable value of all properties falls below the threshold which applies to the property in respect of which relief is sought.

In addition:

eligible properties of £6,000 (RV) or below will receive 100% relief, and;

eligible properties with an RV which is more than £6,000 but not more than £12,000 RV will receive relief on a sliding scale with each extra £120 of rateable value over £6,000 equating to 1% less relief.

The occupied property you claim for must appear in the local rating list as at 1st April. If you occupy a property that was formed for example following a merger or split from another property after 1st April in any financial year you would not be eligible to claim relief until April the following year. The exception to this is from 1st April 2009 when an otherwise eligible occupier of a property comes onto the rating list after 1st April will now be able to claim SBRR from the date of first occupation rather than having to wait for 1st April in the following financial year.

Relief is available to ratepayers who occupy one property within England or one main property and other additional properties, providing the additional properties do not have rateable values of more than £2,200 (£2,599 from 1 April 2010) and the combined rateable values of all the properties is under £15,000 (£18,000 from 1 April 2010).

The threshold for the combined rateable value is dependent on the location of the main property.  The main property is the only one that will have relief applied to it.  The additional properties will have their charges calculated using the standard multiplier.

The Small Business Rate Relief scheme is funded by a supplement on the rate bill of those businesses not eligible for the relief. This supplement is built in to the standard multiplier.

Eligible ratepayers can apply for the relief , including those with rateable values between £12,000 and £18,000 from 1 April 2010. If your business ceases to be eligible during the financial year, relief will cease on that day.  You must submit your application for relief to the Council within six months of the end of current rating list i.e..e. you can apply for relief up to 30/9/2010 backdated to the 2007/2008 financial year. For more information and an application form, please telephone the Revenues team on 01376 557755 in the first instance or email busrates@braintree.gov.uk

An application form can be found under Useful Links

Alternatively you can go to www.sbrr.co.uk. Please note this is not a Council web page and the Council takes no responsibility for its content.

You must notify the council of any change in circumstances which may affect your claim for small business rate relief within 4 weeks starting on the day after the change occurred. 

These changes are:

1. increases in the rateable value of a property occupied by the ratepayer which is not in the area of the billing authority granting SBRR. These changes must be notified in writing.

2. the ratepayer coming into occupation of any property which is not mentioned in their application for relief - these changes will have to be notified through a fresh application for SBRR.

As notifying the billing authority of these changes, within 4 weeks starting on the day of the change, will be a condition of entitlement, failure to notify the authority will mean that the ratepayer would no longer be entitled to the relief. If the ratepayer notifies the authority after the 4 week period, the ratepayer will lose relief from the day after the date of change until the day on which the authority is notified in accordance with the amended 2004 Order.

If the change of circumstances is such that the ratepayer will no longer be eligible for the relief, e.g. because the ratepayer occupies a new hereditament with a rateable value above £2,600 from 1 April 2010, relief would end from the date of change.

Important changes to the Small Business Rate Relief Scheme from 1st October 2010.

Following the recent budget the Government announced it will temporarily increase the level of Small Business Rate Relief (SBRR) so that eligible ratepayers will receive relief at 100% 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 £12,000. The new levels of relief will be available for 12 months from 1 October 2010 to 30 September 2011. The eligibility criteria will remain the same.

Rating of Unoccupied Non-Domestic Properties

The owner of a non-domestic property becomes liable to unoccupied rates when the whole hereditament has been unoccupied for a continuous period of 3 months, or in the case of industrial property, 6 months.

The unoccupied charge is currently 50% of the occupied charge but from 1st April 2008 a 100% charge will apply.

There are exemptions from the unoccupied rate, including:-

1.      its owner is prohibited by law from occupying it or allowing it to be occupied;

2.      it is kept vacant by reason of action taken by or on behalf of the Crown or any local or public authority with a view to prohibiting the  occupation of the hereditament or to acquiring it;

3.      it is the subject of a building preservation notice as defined by section 58 of the Town and Country Planning Act 1971 or is  included in a list compiled under section 54 of that Act;

4.      it is included in the Schedule of monuments compiled under section 1 of the Ancient Monuments and Archaeological Areas Act 1979;

5.      its rateable value is less than £1,000 in the 1990 rating list, or less than £1,500 in the 1995 rating list, or less than £1,900 in the 2000 rating list; or less than £2,200 in the 2005 rating list or less than £2,600 in the 2010 rating list.

6.      the owner is entitled to possession only in his capacity as the personal representative of a deceased person;

7.      there subsists in respect of the owner’s estate a bankruptcy order within the meaning of parts 8 to 11 of the Insolvency Act 1986;

8.      the owner is entitled to possession of the hereditament in his capacity as trustee under a deed or arrangement to which the Deeds of Arrangement Act 1914 applies;

9.  the owner is a company which is subject to a winding-up order made under the Insolvency Act 1986 or which is wound up voluntarily under that Act;

10.  the owner is entitled to possession of the hereditament in his capacity as liquidator by virtue of an order made under section 112 or section 145 of the Insolvency Act 1986.

Definitions

In ascertaining whether an hereditament has been continuously unoccupied for a period of 3 months, or in the case of industrial properties, 6 months, periods of occupation of less than 6 weeks will not be taken into account (although any occupied periods will be charged for)

‘Qualifying industrial hereditament means any hereditament other than a retail hereditament in relation to which all buildings comprised in the hereditament are-

1.      constructed or adapted for use in the course of a trade or business; and

2.      constructed or adapted for use for one or more of the following purposes, or one or more such purposes and one or more purposes ancillary thereto;

(a)    the manufacture, repair or adaptation of goods or materials, or the subjection of goods or materials to any process;

(b)   storage (including the storage or handling of goods in the course of their distribution);

(c)    the working or processing of minerals;

(d)   the generation of electricity; and “retail hereditament” means any hereditament where any building or part of a building comprised in the hereditament is constructed or adapted for the purpose of the retail provision of-

1.      goods, or services, other than storage for distribution services, on or from the hereditament.

Important Information for Owners / Leaseholders Concerning the Rating of Empty Non-Domestic Property – The Rating (Empty Property) Act 2007

With effect from 1 April 2008 the Government changed entitlement to relief from rates for empty non-domestic property. 

If you are responsible for rates in respect of an empty non-domestic property it is likely you will be  affected by the changes.  The following questions and answers are intended to explain how and allow you to plan accordingly.

What changes are being made?

The principle changes are as follows:

empty property rate relief will be reduced from 50% to 0% exemption from rates for empty industrial property will no longer be open ended but limited to 6 months. 

Why are the changes being made?

The changes are being made to provide a strong incentive to bring empty property back into use and in particular are intended to:

help increase the supply of premises to let reduce business rents and improve competitiveness encourage re-development of brown field sites so reducing the need for development on green field land. What will it mean for my rate liability? 

Currently, most empty property is liable to rates at 50% of the full occupied rate after an initial exemption period of 3 months, while empty industrial property is exempt altogether.

The changes will mean that, as of 1 April 2008, most property that has been empty for more than 3 months - or, in the case of industrial property, for more than 6 months - will no longer receive any relief from rates and the full amount will become payable.

Are all empty properties affected?

Some non-domestic properties will still be exempt from rates after 1st April 2008 including:

any small property with a rateable value below £2,200 (£2,600 from 1 April 2010) where liability falls on a charity or community amateur sports club listed buildings and properties subject to insolvency / administration.  

Can I appeal against the change in my rates liability?

The changes in rates liability arising from the reforms to empty property relief are not in themselves grounds for appeal.  However, if you disagree with the rateable value that appears in the current rating list for your property, under existing arrangements you may challenge it by making a `proposal’ against it to your local Valuation Office.  Your rights of appeal are not affected by the reforms to empty property relief and you can contact the local Valuation Office for further information about making proposals.

Can I get my property taken out of rating?

If your property is not capable of beneficial occupation – for instance, if it is in poor condition and cannot be economically repaired – the Valuation Office may judge it should be taken out of rating altogether.  However, if a property is damaged for the purposes of avoiding rates, under new anti-avoidance legislation introduced by the Government the Valuation Office will be required to disregard the change in the property’s state when assessing its rateable value. 

Where can I find out the rateable value of a property?

The quickest and easiest way to find the rateable value of any non-domestic property in England is through the website of the Valuation Office Agency,www.voa.gov.uk

Where can I get further information on these changes or anything else to do with non-domestic rates?

More information about non-domestic rates can be found on the following websites -

- http://www.voa.gov.uk/ 
- http://www.mybusinessrates.gov.uk/ 
- http://www.communities.gov.uk/

Changes to empty property relief

Secondary legislation to implement the temporary increase in the threshold at which an empty property becomes liable for business rates to a rateable value of £15,000 was laid before parliament and came into effect on 1st April 2009.  From 1 April 2010 the threshold changes to £18,000 and this new temporary arrangement exists until 31 March 2011.

From 1 April 2011 the empty property rate relief threshold below which empty properties are exempt from rates will revert to £2,600 rateable value. The threshold was £2,200, before it was temporarily increased in 2009-10 and 2010-11. However, it has now been up rated to £2,600 in line with the general movement of property values at revaluation.

Charitable and Discretionary Relief

Charities and registered Community Amateur Sports Clubs (CASC) are entitled to 80% mandatory relief where the property is occupied by the charity or a CASC. Please visit the Inland Revenue's web site at http://www.hmrc.gov.uk/index.htm or www.cascinfo.co.uk or email to helpline@cascinfo.co.uk or telephone 0845 3020203.

Braintree Council has discretion to give further discretionary relief up to 20% on top of the 80% mandatory relief.

The Council is also able to grant discretionary charity relief to non-profit making organisations and clubs.

For more details please contact the Revenues Section of the Council on 01376 557755 or email busrates@braintree.gov.uk

Hardship relief

The Council has discretion to give relief in special circumstances. Full details can be obtained from the Revenues Section on 01376 557755.

Rural rate relief
The occupier of a general store or post office may be entitled to rate relief if the rateable value is £7,000 or less (£8,500 from 1 April 2010), and the settlement has less than 3000 people.

Occupiers of the sole public house or filling station with rateable values of £10,500 (£12,500 from 1 April 2010) or less could be entitled to rate relief. Relief is given at 50% of the full charge, or of the transitional bill.  The Council have discretion to remit all or part of the remaining 50%. The Council also have discretion to remit part or all of the rate bill on other properties in a qualifying rural settlement of 3,000 people or fewer, if the rateable value is £14,000 (£16,500 from 1 April 2010) or less and the authority is satisfied that the property is used for a purpose which benefits the local community.

Click here for a list of qualifying rural settlements.

Please contact the Revenues Section for further details and an application form.

What to do, if you think your rateable value is too high. If you think that your rateable value is too high, you may wish to make an appeal to have it reduced, or if the reason that you think that it is too high is due to having had a 'material decrease' you may wish to propose a change. Alternatively, you may wish to contact a rating advisor. Members of the Royal Institution of Chartered Surveyors (RICS) and the Institute of Revenues, Rating and Valuation (IRRV) are regulated by rules of professional conduct designed to protect the public from misconduct.

Business Rates Deferral Scheme

Ratepayers in 2009/10 were able to defer payment of 3% of their 2009/10 rates bill and, where applicable, 60% of the increase in that bill due to the ending of the 2005 rating list transitional relief scheme. The right to apply for deferral has now ended. For those ratepayers who applied for this scheme, the deferred amount to be collected in 2011/12 will be shown on the bill for that year.

Making Payments
Many people would like an easier way to pay their Council Tax or Business Rate bill. As these bills are payable monthly, but we do not issue reminders each month, many people face recovery action when they have forgotten to send their cheque each month or can't get into the Council offices. The easiest way to avoid these problems is to use DIRECT DEBIT.

If you do not already pay by direct debit and wish to take up this option you can set this up over the telephone on 01376 557755. Alternatively you can print a Direct Debit Mandate Form (PDF document - print & return by post).

If your bank account requires two or more authorised signatures, you may need to submit a paper mandate. You can download and print a copy from the Useful Links.

If you already pay by Direct Debit, you do not have to complete a new instruction. Your Direct Debit will carry over to the new year, or new property, if you move.

DIRECT DEBIT is safe and convenient and you are covered by the Direct Debit Guarantee.  This guarantee is offered by all banks and building societies that take part in the Direct Debit Scheme. The efficiency and security of the scheme is monitored and protected by your own bank or building society.

As part of the guarantee, if the amounts to be paid or the payment dates change, Braintree Council will notify you 10 days in advance of your account being debited or as otherwise agreed.

If an error is made by Braintree Council or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid.

You can cancel a Direct Debit at any time by contacting your bank or building society. Please also inform Braintree Council Revenues Section.

PLEASE REMEMBER
If you do not make payments by the due dates, the Council will issue a reminder notice. The maximum number of reminders you may receive is 2; the minimum is 1, in any financial year. You will not receive a reminder every month. So, if any of your payments are irregular after receiving a reminder, the next notification that you will receive will be a pre-summons notice.

Further information about how to pay your bill is printed on the reverse of your bill, or, you can contact the Revenues section of Braintree District Council.

For further information on Recovery of Non Domestic Rates please see the Recovery Pages.

 You can now make payments via the internet using E-Payments.

PLEASE NOTE...

Payment of your Business Rates must continue whilst you are awaiting a decision regarding any discount, exemption or appeal.

If your claim is successful we will write to you and send you a revised bill taking into account payments already made .  If you overpay you will be entitled to a refund.