Business rates explanatory notes 2017/18

Changes to business rates announced in the March 2017 Budget

The chancellor has announced some changes to business rates from 1 April 2017 which will provide further support for businesses facing significant increases in bills following the 2017 revaluation. We have not yet implemented these changes and they will not show on your 2017/18 business rates bill.

The following changes were announced:

  • support for small businesses losing small business rate relief to limit increases in their bills
  • funding will be given to local authorities to provide support to individual hard cases in our local area
  • the introduction of a £1,000 business rate discount for public houses with a rateable value of up to £100,000, subject to state aid limits for businesses with multiple properties, for one year from 1 April 2017.

If you are eligible for the business rate discount for public houses, or additional support following the loss of small business rate relief we will send you a new business rates bill once this has been applied to your account.

We will publish further details on the additional help available to businesses following the revaluation as they become available.

Explanatory notes for your business rates bill 2017/18

Non-Domestic Rates (business rates)

Business rates are collected by local authorities. This money, together with revenue from Council Tax payers, revenue support grant provided by the government and certain other sums is used to pay for local services.

From 1 April 2013, local authorities keep a proportion of the business rates paid locally which provides an incentive for them to work with local businesses to create a favourable local environment for growth.

You can find further information about the business rates system, including transitional and other reliefs on the GOV.UK website

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 Office Agency (VOA). The VOA draws up and maintains a full list of all rateable values.

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 1 April 2017, this date was set as 1 April 2015. All rateable values are calculated using this date so each assessment is considered fair.

The valuation officer may change the rateable value if circumstances change. The ratepayer and certain others who have an interest in the property can appeal against the rateable value shown in the list if they believe it is wrong. Full details of your rights of appeal are available from the Valuation Office Agency. We can only backdate any business rates rebate to the date from which the list is changed.

The Valuation Office Agency will alter rating assessments if new information comes to light indicating the valuation is wrong.

Further information about the grounds on which appeals may be made and the process for doing so can be found on the VOA section of the GOV.UK website or from your local valuation office.

Business rates multiplier

We work out your business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers: the standard business rates multiplier and the small business rates multiplier.

The standard multiplier is higher to pay for the cost of 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. The current multipliers are shown on the front of your bill.

Business rates instalments

Payment of business rate bills is automatically set to 10-monthly instalments. However, you are able to make payments in 12-monthly instalments if you so wish. If you wish to do this you should contact us as soon as possible.

Revaluation 2017 and transitional arrangements

All rateable values are reassessed at a general revaluation to ensure that business rate bills reflect changes over time in the value of property relative to others. This helps maintain fairness in the rating system by updating valuations in line with changes in the property market. Revaluation does not raise extra money for government.

The 2017 revaluation takes effect from 1 April 2017. Whilst the 2017 revaluation will not increase the amount of rates collected nationally, over 7 out of 10 ratepayers will receive a reduction or no change in their bill and some ratepayers will see increases.

The government has put in place a £3.6 billion transitional relief scheme to limit and phase in changes in business rate bills as a result of the 2017 revaluation.

Transitional relief limits the percentage your business rates bill can be increased or decreased each year following revaluation. The transitional relief will apply each year until the full amount is due and your bill reaches what your full bill should be.

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 1 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.

The transitional arrangements are applied automatically and are shown on the front of your bill. 

Find out more about the 2017 revaluation on the GOV.UK website.        

Unoccupied property rating

You don’t have to pay business rates 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 business rates are payable in full unless the unoccupied property rate has been reduced by the government by order. If the unoccupied property rate for the financial year has been reduced by order, it will be shown on the front of your bill.

In most cases properties owned by charities and community amateur sports clubs do not have to pay business rates whilst they are empty. Details of all properties that are exempt from business rates whilst empty.

The government has introduced a temporary measure for unoccupied new-builds from October 2013. Unoccupied new-builds will not have to pay business rates for up to 18 months (up to state aid limits) where the property comes on to the valuation list between 1 October 2013 and 30 September 2016. The 18-month period includes the initial 3 or 6 month exemption and so these properties may be exempt from business rates for up to an extra 15 or 12 months if unoccupied.

Partly occupied property relief

You are liable for the full business rate bill whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time we can award relief in certain cases in respect of the unoccupied part. If this applies to you please complete partly occupied online form.

Small business rate relief

You can get small business rate relief If you:

  • only use one property, and its rateable value is less than £15,000.
  • use more than one property, and the rateable value of each of your other properties is £2,899 or below, with the rateable value of all these properties combined being £19,999 or less.

You can only get small business rate relief on one property.

The rateable values of the properties are added together and the relief applied to the main property.

Amount of relief

  • For properties with rateable value £12,000 or below, small business rate relief will be given at 100%.
  • For properties with rateable value between £12,001 and £14,999, small business rate relief will be given on a sliding scale – from 100% at the bottom of the range to 0% at the top.
  • For properties with rateable value £50,999 or less, the small business rate multiplier is used only (even if you have more than one property).  

For the small business rate multiplier to be used, you must not be entitled to:

  • other mandatory relief for the property, or
  • an unoccupied exemption for the property.

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

If you believe you meet eligibility criteria and have not received small business rate relief please complete the small business rate relief online form.

Provided you continue to satisfy the conditions for relief which apply at the relevant time for the property and the ratepayer, you will automatically continue to receive relief in each new valuation period.

If you get small business rate relief, you need to tell us about the following changes in circumstances (we will pick up on all other changes):

  • if you take up occupation of an additional property
  • an increase in the rateable value of a property you occupy in an area other than the area of the local authority which granted 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).

We have discretion to give further relief on the remaining bill. If this applies to you please complete the charities and non-profit organisations online form.

Relief for local newspapers

The government is providing funding to local authorities so that we can provide a discount worth up to £1,500 a year for two years from 1 April 2017, to office space occupied by local newspapers.

This is up to a maximum of one discount per local newspaper title and per property, and up to state aid limits. The relief will be delivered through our discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988).

See the eligibility criteria for this relief in the guidance note.

Rural rate relief 

The government intends to increase the amount of mandatory relief available to rural businesses from 50% to 100% during 2017. Because of this change, if you qualify for 50% mandatory relief from 1 April 2017, we will automatically award 100% relief. This will be shown on your bill as 50% mandatory relief and 50% discretionary relief.  

Local discounts

We have a general power to grant discretionary local discounts.

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 EUR 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 contact us immediately including details of the aid received.

Hardship relief

We have discretion to give hardship relief in specific circumstances.

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 (RICS) and the Institute 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.

Information supplied with demand notices

Information relating to the relevant and previous financial years in regard to the gross expenditure of the local authority is available on the Council Tax pages