The Non-domestic (Chargeable Amounts) (England) Regulations 2016 – which implement the transitional scheme for the introduction on 1 April of the business rate revaluation – is one of five revaluation-related issues covered by the Dept for Communities and Local Government’s first Business Rates Information Letter of 2017 to local authority Chief Finance Officers.
Business rates are re-valued every five years and based on the rentable values that existed two years previously. Current business rates set in 2010 are therefore based on 2008 rentable values. The revaluations that come into effect on 1 April should have been introduced in 2015 but were delayed until 2017 because the government wanted to avoid ‘sharp changes’. They are based on 2013 rentable values.
Sharp rises in property values in London, the Home Counties and predominantly Conservative rural areas in southern England have resulted in dramatic increases in the 2017 revaluations. In West Somerset, for example, the increase is a swingeing 65%.
Decreasing values in less prosperous areas, such as the traditional Labour strongholds in the industrial North and Midlands, have resulted in corresponding falls in business rates.
A cap on how much business rates bills can rise or fall over the next few years will prevent rates changing too dramatically for some businesses. Nevertheless, there is ongoing criticism from the Conservatives in particular about the ways in which rates are calculated and concerns about their impact on rural businesses in particular.
‘1/2017: uprating of business rate relief thresholds‘ also covers
- up-rating of business rate relief thresholds
- Local Government Finance Bill
- update on better billing measures
- updates to Business Rate Explanatory Notes (Demand Notice Regulations) 2003
Online Aids
Some businesses are eligible for discounts on their business rates from their local council. ‘Business rates relief‘ explains that small business rate relief, rural rate relief, charitable rate relief and enterprise zone relief all have to be applied for, while exempted buildings and empty buildings relief are automatically applied.
Some local councils also give extra discounts, such as hardship relief or transitional rate relief, to businesses that meet certain criteria.
‘Estimate your business rates‘ is an online tool that enables businesses to search by postcode to find the rateable value of their premises, then calculate their business rates using a multiplier set by the government.
Any business rate relief entitlement is then deducted to arrive at the business rate that must be paid.