National Non-Domestic Rates Explanatory Notes 2021/22
National 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 1 April 2013, authorities keep a proportion of the business rates paid locally. The money, together with revenue from council taxpayers, locally generated income and grants from central government, is used to pay for the services provided by local authorities in your area. See further information about the business rates system on GOV.UK, and at www.selby.gov.uk
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 ratepayers 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 your local authority as soon as possible.
National Non-Domestic Rating Multiplier
The local authority works out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier. There are two multipliers: the national non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year, except in the City of London where special arrangements apply. Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to certain other mandatory relief[s] 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. The multiplier for a financial year is based on the previous year’s multiplier adjusted to reflect the Consumer Price Index (CPI) inflation figure for the September prior to the billing year. The current multipliers are shown on the front of your bill.
Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs. They compile and maintain a full list of all rateable values, available at www.gov.uk/voa. 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 specified in legislation. For the current rating list, this date was set as 1 April 2015. The Valuation Office Agency may alter the valuation if circumstances change. The ratepayer (and certain others who have an interest in the property) can also check and challenge the valuation shown in the list if they believe it is wrong. Further information about the grounds on which challenges may be made and the process for doing so can be found on the VOA website: www.gov.uk/guidance/how-to-check-your-rateable-value-is-correct.
All non-domestic property rateable values are reassessed at revaluations. The most recent revaluation took effect from 1 April 2017. Revaluations ensure that business rates bills are up-to-date, more accurately reflect current rental values and relative changes in rents. Frequent revaluations ensure the system continues to be responsive to changing economic conditions. Business Rate Reliefs Depending on individual circumstances, a ratepayer may be eligible for a rate relief (i.e. a reduction in your business rates bill). There are a range of available reliefs. Some of the permanent reliefs are set out below but temporary reliefs are often introduced by the Government at Budgets. You should contact your local authority for details on the latest availability of business rates reliefs and advice on whether you may qualify. Further detail on reliefs is also provided at www.gov.uk/introduction-to-business-rates or see details of business rates reliefs on the councils website www.selby.gov.uk
Business Rates Reliefs
Small Business Rates Relief If a ratepayer’s sole or main property has a rateable value which does not exceed an amount set out in regulations, the ratepayer may receive a percentage reduction in their rates bill for this property of up to a maximum of 100%. The level of reduction will depend on the rateable value of the property – for example eligible properties below a specified lower threshold will receive 100% relief, and you may receive partial tapered relief up to a specified upper threshold. The relevant thresholds for relief are set out in regulations and can be obtained from www.gov.uk/introduction-to-business-rates. 3 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 the limit set in regulations. The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set in regulations. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a fixed additional period. Full details on the relevant limits in relation to second properties and the current period for which a ratepayer may continue to receive relief after taking on an additional property can be obtained from www.selby.gov.uk/small-business-rate-relief
Certain changes in circumstances will need to be notified to the local authority 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 property falls vacant, (b) the ratepayer taking up occupation of an additional property, and (c) 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.
Expanded Retail Discount 2021 to 2022
The government’s Budget announcement on 3 March 2021 included support for businesses most affected by the COVID-19 pandemic through Business Rate Reliefs. This relief will apply to occupied retail, leisure and hospitality properties in the year 2021/22. A subsidy ‘Cash Cap’ is applied to this relief. Eligible properties will therefore receive: • 100% relief from 1 April 2021 to 30 June 2021. No ‘Cash Cap’ applies for this period. • 66% relief from 1 July 2021 to 31 March 2022, up to a value of £2,000,000 per business for properties that were required to be closed on the 5 January 2021. Where a business was not required to close on 5 January 2021, a £105,000 per business ‘cash cap’ will apply. There will be no rateable value limit on the relief.
1. Hereditaments that meet the eligibility for Expanded Retail Discount will be occupied hereditaments which meet all of the following conditions for the chargeable day: (a) they are wholly or mainly being used: i. as shops, restaurants, cafes, drinking establishments, cinemas and live music venues, ii. for assembly and leisure; or iii. as hotels, guest & boarding premises and self-catering accommodation,
2. The government consider shops, restaurants, cafes, drinking establishments, cinemas and live music venues to mean:4 i. Hereditaments that are being used for the sale of goods to visiting members of the public: • Shops (such as: florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets, etc.) • Charity shops • Opticians • Post offices • Furnishing shops/ display rooms (such as: carpet shops, double glazing, garage doors) • Car/caravan show rooms • Second-hand car lots • Markets • Petrol stations • Garden centres • Art galleries (where art is for sale/hire) ii. Hereditaments that are being used for the provision of the following services to visiting members of the public: • Hair and beauty services (such as: hairdressers, nail bars, beauty salons, tanning shops, etc.) • Shoe repairs/key cutting • Travel agents • Ticket offices e.g. for theatre • Dry cleaners • Launderettes • PC/TV/domestic appliance repair • Funeral directors • Photo processing • Tool hire • Car hire • Employment agencies • Estate agents and letting agents • Betting shops iii. Hereditaments that are being used for the sale of food and/or drink to visiting members of the public: • Restaurants • Takeaways • Sandwich shops • Coffee shops • Pubs • Bars iv. Hereditaments which are being used as cinemas v. Hereditaments that are being used as live music venues: • Live music venues are hereditaments wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Hereditaments cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or a theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987 (as amended). • Hereditaments can be a live music venue even if used for other activities, but only if those other activities (i) are merely ancillary or incidental to the performance of live music (e.g. the sale/supply of alcohol to audience members) or (ii) do not affect the fact that the primary activity for the premises is the performance of live music (e.g. because those other activities are insufficiently regular or frequent, such as a polling station or a fortnightly community event). • There may be circumstances in which it is difficult to tell whether an activity is a performance of live music or, instead, the playing of recorded music. Although we would expect this would be clear in most circumstances, guidance on this may be 5 found in Chapter 16 of the statutory guidance issued in April 2018 under section 182 of the Licensing Act 2003.
3. The Government considers assembly and leisure to mean: i. Hereditaments that are being used for the provision of sport, leisure and facilities to visiting members of the public (including for the viewing of such activities). • Sports grounds and clubs • Tourist attractions • Museums and art galleries • Gyms • Nightclubs • Wellness centres, spas, massage • Sport and leisure facilities parlours • Stately homes and historic houses • Casinos, gambling clubs and bingo • Theatres halls ii. Hereditaments that are being used for the assembly of visiting members of the public. • Public halls • Clubhouses, clubs and institutions
4. We consider hotels, guest & boarding premises and self-catering accommodation to mean: i. Hereditaments where the non-domestic part is being used for the provision of living accommodation as a business: • Hotels, Guest and Boarding Houses • Holiday homes • Caravan parks and sites 5. To qualify for the discount the hereditament should be wholly or mainly being used for the above qualifying purposes. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief. For the avoidance of doubt, hereditaments which have closed due to the government’s advice on COVID19 should be treated as occupied for the purposes of this relief.
This discount is for business properties occupied by providers on Ofsted’s Early Years Register and which are wholly or mainly used for the provision of the Early Years Foundation Stage and which are subject to business rates. A ‘Cash Cap’ applied to this relief. Qualifying properties will receive: • 100% rate relief for the period 1 April – 30 June 2021. There is no ‘Cash Cap’ for this period. • 66% rate relief for the period 1 July – 31 March 2021. A ‘Cash Cap’ of £105,000 will apply from 1 July 2021, therefore relief will be capped at £105,000 per business.
We have a list of Ofsted registered premises and will automatically apply the relief to eligible properties, where it is clear that the whole or main activity is early years education. Where we believe the ‘Cash Cap’ will be breached, we will withhold the relief.
Charity and Community Amateur Sports Club Relief
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). The local authority has discretion to give further relief on the remaining bill. Full details can be obtained from the local authority.
Unoccupied Property Rate Relief
Business rates are generally payable in respect of unoccupied non-domestic property. However, they are generally not payable for the first three months that a property is empty. This is extended to six months in the case of certain other properties (for example industrial premises). Full details on exemptions can be obtained from www.selby.gov.uk/other-relief-grants-and-funding your or from gov.uk at https://www.gov.uk/apply-for-business-rate-relief.
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 www.selby.gov.uk/other-relief-grants-and-funding
Transitional Rate Relief
At a revaluation, some ratepayers will see reductions or no change in their bill whereas some ratepayers will see increases. Transitional relief schemes are introduced at each revaluation to help those facing increases. This relief has been funded by limiting the reduction in bills for those who have benefited from the revaluation. Transitional relief is applied automatically to bills. Further information about transitional arrangements and other reliefs may be obtained from www.selby.gov.uk/other-relief-grants-and-funding or the www.gov.uk/introduction-to-business-rates.
Local authorities have a general power to grant discretionary local discounts and to give hardship relief in specific circumstances. Full details can be obtained from wwww.selby.gov.uk/other-relief-grants-and-funding.
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 scheme provides up to a maximum of one discount per local newspaper title and per hereditament, and up to subsidy limits. The relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). In a Written Ministerial Statement on 27th January 2020 the Government announced that the extension of the £1,500 business rates discount for office space occupied by local newspapers, will apply for an additional 5 years until 31st March 2025. An eligibility criterion for this relief is set out in a guidance note: “The case for a business rates relief for local newspapers”, which can be obtained at https://www.gov.uk/government/consultations/the-case-for-a-business-rate....
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 and have a rateable value of less than £8,500, 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 100% of the full charge (50% being mandatory relief and 50% centrally funded discretionary relief). Subsidy (formerly State Aid) Following the UK withdrawal from the European Union, the Brexit transition period has ended and new rules on subsidy control now apply. Subsidies have replace State Aid. A subsidy: • is given by a public authority. This can be at any level – central, devolved, regional or local government or a public body • makes a contribution (this could be a financial or an in kind contribution) to an enterprise, conferring an economic advantage that is not available on market terms. Examples of a contribution are grants, loans at below market rate, or a loan guarantee at below market rate or allowing a company to use publicly owned office space rent free. An enterprise is anyone who puts goods or services on a market. An enterprise could be a government department or a charity if they are acting commercially • affects international trade. This can be trade with any World Trade Organisation member or, more specifically, between the UK and a country with whom it has a Free Trade Agreement. For example, if the subsidy is going towards a good which is traded between the UK and the EU this could affect trade between the EU and the UK. Please note that you are not being asked whether the subsidy could harm trade but merely whether there could be some sort of effect. Subsidies to very local companies or a small tourist attraction are unlikely to be caught as this is unlikely to affect international trade. See further information regarding Subsidies at (GOV.UK).
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 - website www.rics.org) and the Institute of Revenues, Rating and Valuation (IRRV - website www.irrv.org.uk) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct. Before you employ a rating adviser or company 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.
Information Supplied with Demand Notices
Information relating to the relevant and previous financial years in regard to the gross expenditure of Selby District Council is available at www.selby.gov.uk/council-tax-and-national-non-domestic-rates. A hard copy is available on request by writing to us or by calling us on 01757 705101.