Non-Domestic Rates
The non-domestic rates, or Business Rates, collected by local councils are the way that those who occupy non-domestic property make a contribution towards the cost of local services. Except in the City of London where special arrangements apply, the rates are pooled by central government and redistributed to local councils according to the number of people living in the area. This money, together with revenue from council taxpayers, revenue support grant provided by the Government and certain other sums, is used to pay for the services provided by your local council and other local authorities in your area.
Rateable Value
Apart from properties that are exempt from Business Rates, each non-domestic property has a rateable value which is normally set by the valuation officers of the Valuation Office Agency (VOA), an Agency of the Inland Revenue. It draws up and maintains a full list of all rateable values, which are available on the VOA website (external link).
The rateable value of your property is shown on the front of your bill. The rateable value 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 2005, this date was set as 1 April 2003.
The valuation officer has to maintain the list and may alter the value if the circumstances of the property have changed. The ratepayer (and certain others who have an interest in the property) can also appeal against the value shown in the list if they consider it is wrong. Further information on the grounds for making an appeal, and on how to make one, can be found on the VOA website (external link) or from your local valuation office.
Successful appeals against values shown in the rating list that came into force on 1 April 2005 will normally be backdated to the beginning of the financial year in which they are made, although there are exceptions to this. Further information about these arrangements may be obtained on the DCLG website (external link)
National Non-Domestic Rating Multiplier
The local council works out the Business Rates bill by multiplying the rateable value of the property by the multiplier or ‘poundage’ which the Government sets from 1 April each year for the whole of England. From the 1st April 2005 there are two multipliers; the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The former is higher to pay for small business rate relief.
The Government normally changes the multiplier every year to move in line with inflation. By law, the multiplier cannot go up by more than the rate of inflation apart from some minor adjustments to counteract losses from appeals and, in relation to the standard multiplier, to pay for small business rate relief. In the year of a revaluation it is set at a level which will keep the total amount raised in rates after the revaluation the same as before, plus inflation for that year.
Transitional Arrangements
Property values normally change a good deal between each revaluation. Transitional arrangements help to phase in the effects of these changes by limiting the amount by which a bill may rise following a revaluation. To help pay for the limits on increases in bills after a revaluation, there also have to be limits on reductions in bills. Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the multiplier).
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 the revaluation date, transitional arrangements will not normally apply to the part of a bill that applies to any increase in rateable value due to those changes. Further information about transitional arrangements may be obtained from Wigan Council or on the Business Link website (external link).
Any transitional adjustments will be shown on the front of your bill.
Partly Occupied Property Relief
A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or partly occupied.
Where a property is partly occupied for a short time, the council has the discretion to award relief in respect of the unoccupied part.
Small Business Rate Relief
The Government has introduced a new rate relief scheme to help small businesses.
This is available at 50% for ratepayers occupying single properties with a rateable value up to £5,000, with relief declining in percentage terms on a sliding scale until it is 0% at £10,000 rateable value.
The relief is only available to ratepayers with either
- one property; or
- one main property and other additional properties providing those additional properties have rateable values less than £2,200.
The rateable value of the property mentioned in (a), or the aggregate rateable value of all properties mentioned in (b), must be under £15,000 outside London or £21,500 within London.
The scheme is funded through a supplement on the rates bill of all businesses not eligible for the relief. The supplement is built into the standard non-domestic rating multiplier (rate in the pound). However, ratepayers of eligible business properties with rateable values between £10,000 and £15,000 (£21,500 within London) do not have to contribute towards the relief and will have their bills calculated using the lower small business non-domestic rating multiplier (rate in the pound).
If a ratepayer ceases to be eligible on a day during the year in question, the relief will cease on that day.
From 1st April 2007 ratepayers who meet the criteria can submit an application for the financial years 01/04/07 to 31/03/2010.
An application form must be submitted in writing to us within 6 months of the end of the valuation period to which it relates.
If the rateable value of a property is altered and the property subsequently meets with the small business rate relief criteria, an application for such relief can be submitted up to six months after the date of notification of the alteration.
Charity Relief
Charities and Registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the charity or club and is wholly or mainly used for charitable purposes or as a Registered Amateur Sports Club.
Local councils have discretion to give further relief on the remaining bill.
Non-Profit Making Organisations Relief
Authorities also have discretion to give relief on all or part of any rate bill for property occupied by certain non-profit making bodies.
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 – website (External link)) and the Institute of Revenues Rating and Valuation (IRRV – website (External link)) 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.
Hardship Relief
Local council's have discretion to give relief in special circumstances.
Rate relief for businesses in rural areas
Certain types of properties in a rural settlement with a population below 3000 - for example, the only general store, post office or food shop and with a rateable value of less than £7,000 or the only public house or petrol station and with a rateable value of less than £10,500 - may be entitled to relief. The property has to be occupied and an eligible ratepayer is entitled to relief at 50% of the full charge. Local council's have discretion to give further relief on the remaining bill.
In addition, the local council may decide to give relief on certain other occupied property in a rural settlement where the rateable value is less than £14,000.
