Who is liable for business rates?
Who pays Business Rates?
The person or company who actually occupies a non-domestic property usually pays the rates. Often this will also be the owner or leaseholder of the property.
What properties count as non-domestic?
Any property that is not intended for use as somebody’s residence will be liable for Non Domestic Rates. Shops, offices, factories and warehouses are obvious examples. Holiday homes that are available for commercial letting for 140 days a year or more will be charged non-domestic rates. If you offer bed and breakfast to six people or less within your own home, you will not pay business rates.
Some non-domestic properties are exempt from rates. The most common types are farmland and buildings, churches, sewers and public parks.
How is it worked out?
Each non domestic property has a rateable value, which is set by the valuation officers of the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs.
The local authority works out the Business Rates bill by multiplying the rateable value of the property by the appropriate multiplier.
What are multipliers?
From 1 April 2005 there are two multipliers; the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year for the whole of England. The Government normally changes both multipliers every year in line with inflation.
- The Non-Domestic Multiplier for 2015/2016 is 49.3p
- The Small Business Non-Domestic Multiplier for 2015/2016 is 48.0p
- The Non-domestic multiplier for 2016/2017 is 49.7p
- The Small business non-domestic multiplier for 2016/2017 is 48.4p
- The Non-domestic multiplier for 2017/2018 is 47.9p
- The Small business non-domestic multiplier for 2017/2018 is 46.6p
Changes to business rates from 1 April 2017:
Chancellors Spring Statement
In his Budget Statement to Parliament on 8th March 2017 the chancellor announced some additional measures to assist businesses most adversely affected by the 2017 re-valuation. All the specific details of these additional measures and how they are to be applied are not yet known. Further details will be made available as soon as possible and amended rate demands will be issued to those properties eligible for relief once the application process has been established
The measures announced are:-
- An additional £1000 discount for local pubs with a rateable value of less than £100,000. This will be for one year only.
- Any business no longer eligible for SBRR to have increases capped at no more than £600 in the first year.
- A £300m Discretionary fund to be made available to Council’s to assist businesses hardest hit by the revaluation. The Government have yet to announce details of how this funding will be shared amongst LA’s.
- All rateable values are reassessed by the Valuation Office Agency at a general revaluation to ensure bills paid by any one ratepayer reflect changes over time in the value of their property relative to others. The 2017 revaluation takes effect from 1st April 2017 and the new values will be used to calculate business rate bills from that date. Further information can be found at www.gov.uk/introduction-to-business-rates/revaluation
Transitional scheme for the 2017 rating list
- For those ratepayers that would otherwise see significant increases in their rates liability, the Government has put in place a transitional relief scheme to limit and phase in changes in rate bills as a result of the 2017 revaluation. To help pay for the limits on increases in bills, there also have to be limits on reductions in bills.
- Under the transitional relief scheme, limits continue to apply to yearly increases and decreases until the full amount is due. The scheme applies only to the bill based on a property at the time of the revaluation. The transitional arrangements are applied automatically, you do not have to apply for them and will be shown on the front of your bill.
- The provisional 2017/18 standard non-domestic rating multiplier from 1 April 2017 is 47.9p and the small non-domestic standard rating multiplier is 46.6p. The multipliers will be confirmed after either the Local Government Finance Report for 2017-18 has been approved by the House of Commons or 1 March 2017, whichever is earlier.
Small Business Rate Relief
- The doubling of the Small Business Rate Relief from 50% to 100% will be made permanent from 1 April 2017. The £6,000 and £12,000 thresholds will increase to £12,000 and £15,000 respectively. The threshold for the standard business rates multiplier will also increase from a rateable value of £18,000 (£25,500 in London) to £51,000.
Rural rate relief
- The Autumn Statement confirmed that the Government will double rural rate relief to 100% from 1 April 2017.
- The Government will provide a new 100% business rates relief for new full fibre infrastructure for a five year period from 1 April 2017 to support the rollout of new full-fibre broadband infrastructure and future 5G communications to homes and businesses.
- £1,500 business rates discount for office space occupied by local newspapers, up to a maximum of one discount per local newspaper title and per hereditament, and up to state aid limits, for 2 years from 1 April 2017.
Empty property rates
- From 1st April 2017 the government has announced that it intends to increase the rateable value threshold below which buildings are exempt until they become occupied again from £2,600 to £2,900