Consultation on Business Rates Relief - Revaluation Support
We are consulting with local businesses and organisations on a draft proposal for a ‘discretionary business rates relief scheme’
The Government has undertaken a national revaluation of all commercial premises. From 1 April 2017, these premises have been assigned a new ‘rateable value’, which is used to calculate business rates bills.
The Government’s Budget (8 March 2017) announced £300m of extra funding over four years for local councils to provide discretionary relief for businesses and organisations facing higher bills as a result of this revaluation. This is called ‘revaluation support’. Although revaluation support schemes will be funded by the Government, local councils have the discretion to design their own schemes within Government guidelines. The Government has confirmed that Basingstoke and Deane Borough Council can claim the following grant funding for 2017 revaluation support:
The council’s proposal is to offer revaluation support relief to those businesses or organisations with a rateable value of under £200,000 as follows:
Businesses or organisations – with a rateable value of £20,000 and under
- Receive a 5% reduction on their business rate bills for those businesses deemed eligible
- These would be automatically applied and deducted from future instalments of business rate bills for those businesses and organisations deemed eligible.
Retail businesses and organisations with a rateable value of £20,001 to £199,999
- Receive a 12% reduction on their business rate bills for those businesses deemed eligible;
- Application must be made to apply for this relief (this is due to state aid limits):
- Only retail businesses can apply whose premises are wholly or mainly being used as shops, restaurants, cafes and drinking establishments.
Small business and organisations with a rateable value of £20,000* and under can be of any commercial type. Those with a rateable value of between £20,001 to £199,999 must be retail only.
*The '£20,000 and under' rateable value is used to define a small business as this is the same as the Governments small hereditament transition relief scheme.
The financial breakdown of the proposed scheme would be as follows:
2017/18 – Total revaluation support available is £495,000
|Small businesses or organisations with a rateable value of £20,000 and under|
|Estimated relief amount 2017/18||£126,000|
|Estimated number of businesses and organisations eligible for relief||659|
|Percentage discount from bill for each eligible premises||5%|
|Medium retail businesses and organisations with a rateable value between £20,001 to £199,999|
|Estimated relief amount in 2017/18||£369,000|
|Estimated number of businesses and organisations eligible for relief||130|
|Percentage discount from bill for each eligible retail premises||12%|
During the development of the council's proposed scheme, a range of other possible options were considered. They included
- Excluding businesses with rateable values under £20,001 as their increases are limited to 5% due to the Government transition relief limits. This was rejected as it would exclude small businesses, which the council wants to help and are encouraged by the Government in its guidance notes.
- Limiting the rateable value of businesses to £100,000, to remove the higher rated properties and only give it to smaller businesses. This option was rejected as the Government allocation of grant funding was calculated using a limit of £200,000 rateable value and many businesses with rateable values in the £100,000 to £200,000 band will have experienced significant increases in rates (as transition only provides protection for increases above 42%).
- Providing 'banded' relief at different fixed amounts rather than a constant percentage above £20,000 rateable value. This was rejected as it was felt a percentage would be fairer and easier to understand, without a requirement for judgement on bandings or fixed amounts.
- Giving relief to all business types in the rateable value band £20,001 to £199,999, however this was rejected as the council priority is for retail type businesses in the Basingstoke and Deane area.
- Varying the percentage discounts for each band. This was rejected because, due to transitional relief arrangements, the maximum increase for any business with a rateable value £20,000 and under is 5% and £20,001 to £99,999 is 12.5%.
Have your say
We are looking for your views on this scheme to shape the council’s final proposal about the allocation of revaluation support.
The consultation period runs from: 9 August 2017 to 30 August 2017, and the results will be available here as soon as possible after the consultation has closed.
If you have an enquiry about council tax, send a message to the Local Tax Team.