Consultation on business rates relief - Revaluation Support

Bassetlaw District Council wants to consult with ratepayers on developing a new business rates relief scheme for revaluation support.

This document:

  • explains business rates and business rates relief for revaluation support  
  • explains why we want to develop a new relief scheme for revaluation support
  • sets out options, proposals and questions for the new scheme

We would like your views on these proposals.

Please consider the proposal and answer the questions relating to the relief scheme suggested.

The consultation period will run from 8 August 2017 to 27 August 2017.

How to respond

Please answer the questions at the end of this page

Responses should be received by close of business on 27 August 2017.

Enquiries

During the consultation, if you have any enquiries, please contact:

Email: andrew.bayliss@bassetlaw.gov.uk

Telephone: 01909 535592

Background

Business rates (also known as non-domestic rates) are a tax on organisations and companies that are using a building or office space for business purposes.

From 1st April 2017, all commercial buildings and offices in the district have been given a new ‘rateable value’ used to calculate the amount of business rates a business occupying that space has to pay.  This process is known as the ‘revaluation’ and is controlled by the Government.

In this year’s Budget, the Government announced £300 million for local councils to finance business rates relief for revaluation support.  The Government’s extra funding will only support relief schemes targeted at businesses facing an increase in their business rate bills following the 2017 revaluation. 

The Government’s draft allocation of funding for Bassetlaw is set out below.

 

Amount of discretionary pot awarded (£000s)

 

LA

2017-18

2018-19

2019-20

2020-21

Total

Bassetlaw

281

137

56

8

482

These figures are allocations for Bassetlaw District Council which were initially announced as part of a Government consultation on 9th March 2017: https://www.gov.uk/government/consultations/discretionary-business-rates-relief-scheme

This consultation is about options for Bassetlaw District Council to design a business rates relief scheme for‘revaluation support’ using the Government’s allocation of funding for the District.

Scheme Proposals

Bassetlaw’s proposed scheme is designed to mirror the criteria used by the government when allocating the available national “pot” between local authorities, the details of which are shown below:-

  • Revaluation support is available for those businesses and organisations that are facing an increase of more than 12.5% (following the April 2017 revaluation) compared to the 2016/17 bill.
  • There has been an increase in the 2017/18 business rates bill compared to the 2016/17 business rates bill after all other reliefs are applied of more than £499.99.
  • The rateable value of the property is less than £200,000.
  • Revaluation support will not be available to properties where the liable party to business rates is Bassetlaw District Council, and precepting organisations.

Based on available funding revaluation support at the following percentages of the net increase for 2017/18 would be granted.

Financial Year

Percentage revaluation support

2017/18

18

2018/19

8.5

2019/20

3.5

2020/21

0.5

The table below illustrates how much extra relief businesses would receive under this proposal, depending on the amount by which their business rate bill has increased by between 2016-17 and 2017-18:

Increase in business rate bills following the revaluation, comparing 2016-17 bill to 2017-18 bill

Amount of extra relief they would receive for ‘revaluation support’ under the proposed scheme, set at 18% discount on their year on year business rate bill increase

£20,000 bill increase

£3600

£10,000 bill increase

£1800

£5000 bill increase

£900

£2500 bill increase

£450

£1000 bill increase

£180

£500 bill increase

£90

We believe that this method would be the fairest way of distributing Bassetlaw’s allocation of Government funding for extra business rates relief for ‘revaluation support’ because:

  • It would ensure that the value of the extra relief given out is proportional to the amount that a businesses’ bill has increased by. Those local businesses facing the most significant increases in their bills following the revaluation, would receive the most support under the proposed scheme.
  • It would ensure that the extra relief available supports different types and sizes of business across the whole district, rather than just being concentrated on a very small number of businesses or any one particular sector.
  • It provides for a consistent method of calculating how much relief to award any one business, ensuring that the relief scheme is transparent and that businesses are treated fairly against clear criteria

We propose that only businesses that have seen their business rate bills increase by £500 or more would be eligible for the relief scheme. This is because the value of any extra relief applied under this threshold would be negligible, and this needs to be balanced against the high administrative burden and cost for the Council to apply relief to every business with a minor bill increase.

Where a qualifying ratepayer’s 2017/18 and, or 2016/17 rates bill is reduced for any of the following reasons, the amount of their revaluation support will be reduced or removed accordingly:

  • A reduction in rateable value in the 2010 and, or 2017 rating lists.
  • The provision of a certified value for the 2010 rating list or historical change.
  • The application of any additional rate relief or exemption.
  • Vacation and reoccupation of the property.

State Aid 

The provisions that govern this relief come under Section 69 of the Localism Act which amended Section 47 Local Government Finance Act 1988.

The support offered under this policy is given under the State Aid Regulations (1407/2013).  This allows an undertaking to receive up to €200,000 of De Minimis aid in a three-year period (consisting of the current financial year and the two previous years).

There will be a requirement for ratepayers receiving revaluation support to confirm that they have not received any other State Aid that together exceeds in total €200,000 in accordance with the above.

Survey

Published: Monday 07 August 2017
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