Reliefs

Page last updated at 17 November 2017 at 09:51

Empty Properties

If the whole property is empty and unused, no business rates are payable for three months from the date it became unoccupied. After the three month period, 100% of the charge becomes payable. Properties that are classed as industrial are entitled to six months exemption while empty. Properties with a Rateable Value of under £2600 (£2900 from 1 April 2017) are also exempt while empty. Other types of properties are also exempt from empty rate charge.

Whoever is entitled to occupy the property pays the unoccupied property rates. This might be the leaseholder or the owner.

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Partly occupied/unoccupied property (section 44a relief)

Where a property is partly occupied, the ratepayer has two options for the a non-domestic rate liability reduction. These options are:-

OPTION 1 – SPLIT THE PROPERTY IN THE RATING LIST
Where the unoccupied part is likely to remain empty for a considerable period of time (e.g. over one year), it may be possible for the ratepayer to apply to the Valuation Office Agency to split the rating assessment to create two or more separate assessments which will reduce the rating liability for the occupier.

OPTION 2 – MAKE APPLICATION FOR S44A RELIEF
If only part of the property is unoccupied for a short period of time, it is not always practical for the Valuation Officer to create two separate assessments in the Rating List. For example, where a company phases its removal from one property to another or renovation works are being carried out.

Section 44A applications will be dealt with in accordance with Government legislation and Council policy and it is at the discretion of the Council whether to ask the Valuation Office Agency to determine the rateable values of the occupied and unoccupied parts. If requested by the Council, the Valuation Office Agency will issue a Section 44A certificate detailing the apportioned rateable values. The unoccupied part of the property will then benefit from a three month exemption from rates, or in the case of certain industrial properties a six month exemption will apply. Following the expiry of this exemption period the occupied rates will again apply to the whole property.

Any ratepayer wishing to apply to the Council for S44a relief should do so in writing, either by a letter or email to revbens@eastleigh.gov.uk , as soon as the property becomes partly occupied or when work commences. Applications should be accompanied by a plan of the whole property with measurements and the occupied and unoccupied parts clearly marked. The Council’s Field Officer will need to visit to inspect the unoccupied element of the property to clarify that works have commenced.

Keeping us informed

We regularly inspect unoccupied properties. However you must still tell us when there is a change of circumstances, for instance if someone has occupied or you have sold the property.

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Charities and certain non-profit making organisations

Charities and certain non-profit making organisations are entitled to a rate reduction on non-domestic properties occupied for charitable purposes. There are two types of relief: mandatory and discretionary.

Your organisation must be a charity or trustees for a charity or a registered community amateur sports club, and the property must be wholly or mainly used for charitable purposes or for the purposes of the club or other registered clubs charity shops must be wholly or mainly used for the sale of goods donated to the charity and the proceeds (after deduction of expenses) must be applied for the purposes of the charity   If the property is unoccupied you may still qualify so long as it appears that when next used the property will be wholly or mainly for charitable purposes or for the purposes of the club or other registered clubs.  

Your organisation is eligible if you are registered under the Charities Act 2006.

All applications are dealt with in reference to the Councils Policy 

Provided you qualify, you are entitled to an 80% reduction off your rates bill.

The Council will consider granting discretionary relief of:

A further 20% for a ratepayer already entitled to mandatory relief for charitable organisations and registered Community Amateur Sports Clubs; or

A further 50% reduction for a ratepayer already entitled to mandatory relief as a village shop, post office or rural food shop; or

Up to 50% reduction for any other business located within a qualifying rural settlement but not included in the description listed directly above this one; or Up to 100% reduction to certain other non-profit-making organisations which do not qualify for Mandatory Relief but meets the following requirement:  

- a property where all or part is occupied for the purposes of one or more institutions or other organisations which are not established or conducted for profit and their main objects are charitable or are otherwise philanthropic or religious or concerned with education, social welfare, science, literature or the fine arts; or

- a property which is wholly or mainly used for purposes of recreation, and all or part of it is occupied for the purpose of a club, society or other organisation not established or conducted for profit.

Charitable rate relief application form  (Please note that the application form must be printed before completion and returned to the Revenue & Benefits Department.)
Charitable discretionary Rate Relief Policy 

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Small Business Rate Relief (SBRR) 2016/17

To qualify for the relief you must occupy either:
(a) one property or,
(b) one main property and other additional properties providing those additional properties each have a rateable value of less than £2,600.

The Rateable Value of the property mentioned in (a), or the aggregate Rateable Value of all properties mentioned in (b), must be under £18,000 on 1 April each year. After 01 April 2014 ratepayers that occupy an additional property which would normally have meant the loss of SBRR will be allowed to keep that relief for a period of up to 12 months. You must still inform the Revenues Department if you occupy an additional property, regardless of where that property is located.

Ratepayers who meet the above conditions will have their rates for single (a) or main property (b) calculated using the small business non-domestic rating multiplier. In addition, businesses with a Rateable Value of £6000 - £12,000 or less will receive a percentage reduction of up to 99%. Properties with a Rateable Value of £5999 or less, will receive a reduction of 100%.

Provided the ratepayer’s circumstances remain unchanged, the relief will remain in place up to 31 March 2016.

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Small Business Rate Relief (SBRR) 2017/18

  • If you qualify for small business rate relief and occupy only one property with a rateable value of £12,000 or below you will pay no rates at all for this period.
  • Those occupying only one property with a rateable value below £15,000 will benefit from a discount on their bill on a sliding scale (at a rate of 1 per cent relief for every £30 increase in rateable value above £12,000).

 If you subsequently occupy another property (in any local authority area) you will continue to qualify for this reduction on your existing property for up to a year.

If you occupy more than one business property, the percentage reduction is only available if the rateable value of each of the other properties is not more than £2,899 (and the combined value is below £20,000).

You should notify the council if you take up occupation of an additional property or if there is an increase in the rateable value of a property that you occupy outside this Council’s area.

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Community Sports Clubs

Community sports clubs may also qualify for charitable rate relief provided membership is open to all sections of the Community (membership fees may be charged). The organisation must promote community participation in healthy recreation or the advancement of the physical education of young people not undergoing formal education.

If you have any queries or wish to apply for Small Business Rate Relief please contact the Business Rates department on 02380 688076.

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Reoccupation Relief

This relief is only applicable to empty properties that became re-occupied between 1 April 2014 and 31 March 2016 and had previous been empty for 12 months or more immediately before it became occupied.

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Discretionary Reduction in Liability

The local policy document Discretionary Reduction in Liability Policy details discretionary reduction in liability for commercial properties.

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 Public House Relief 2017/18

The Government announced a new relief scheme for pubs that have a rateable value of below £100,000 in the Spring Budget 2017. Under the scheme, eligible pubs will receive a £1000 discount on their 2017/18 bill. The relief is calculated on a daily basis and will be apportioned over the relevant period the business remains eligible for the discount. The amount of relief awarded may change on in the event of a change of circumstances, which could include, for example, a change of ownership, a change in the rateable value or the reoccupation of empty premises

You can apply for Public House Relief if your business meets the following requirements:

  • Property is occupied for a period between 01.04.2017 – 31.03.2018
  • Rateable Value is under £100,000
  • Open to the general public
  • Allows free entry other than when occasional entertainment is provided
  • Allows drinking without requiring food to be consumed
  • Permits drinks to be purchased at a bar

Where pubs are part of a chain, relief will be available for each eligible property in the change, subject to meeting State Aid Requirements.

The following are not eligible for this relief:

  • restaurants
  • cafes
  • nightclubs
  • hotels
  • snack bars
  • guesthouses
  • boarding houses
  • sporting venues
  • music venues
  • festival sites
  • theatres
  • museums
  • exhibition halls
  • cinemas 
  • concert halls
  • casino

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Supporting Small Business Scheme 2017 to 2022

The Supporting Small Businesses relief will help those ratepayers who, as a result of the change in their rateable value at the revaluation, are losing some or all of their small business and, as a result, are facing large increases in their bills. To support these ratepayers, the Supporting Small Businesses relief will ensure that the increase per year in the bills of these ratepayers is limited to the greater of:

a percentage increase per annum of:

5%    2017/2018

7.5%  2018/2019

10%   2019/2020

15%   2020/2021

15%   2021/2022

All the above percentages will include inflation.

Unlike the transitional relief scheme, for the first year of the scheme the percentage increase is taken against the bill for 31 March 2017 after small business rate relief.

OR

a cash value of £600 per year (£50 per month)

This cash minimum increase ensures that those ratepayers paying nothing or very small amounts in 2016/17 after small business rate relief are brought into paying something.

In the first year of the scheme, this means all ratepayers losing some or all of their small business rate relief will see the increase in their bill capped at £600. The cash minimum increase is £600 per year thereafter. This means that ratepayers who are currently paying nothing under small business rate relief and are losing all of their entitlement to relief (i.e. moving from £6,000 rateable value or less to more than £15,000) would under this scheme be paying £3,000 in year 5.

Those on the Supporting Small Businesses relief scheme whose 2017 rateable values are £51,000 or more will not be liable to pay the supplement (1.3p) to fund small business rate relief while they are eligible for the Supporting Small Businesses relief scheme.

Ratepayers remain in the Supporting Small Businesses relief scheme for either 5 years or until they reach the bill they would have paid without the scheme. A change of ratepayers will not affect eligibility for the Supporting Small Businesses relief scheme but eligibility will be lost if the property falls vacant or becomes occupied by a charity or Community Amateur Sports Club.

As with all reliefs, the amount of relief awarded under the Supporting Small Businesses relief scheme will be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value or the hereditament. This change of circumstances could arise during the year in question or during a later year.

Due to requirements for software changes there has been a delay in identifying eligible cases and applying the relief. It is however hoped that bills will be issued shortly.

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Local Discretionary Relief

The relief will assist ratepayers who have significant increases in rate liability due to the revaluation and the subsequent increase to their rateable value. For the first year of relief (2017/18)The council will compare the rate liability for OCCUPIED properties at 31 March 2017 and 01 April 2017 (after any reliefs and reductions).Relief will be awarded where the calculation would result in an increase of more than 3% up to a maximum of £5,000.

The amount of relief for subsequent years to 2020/21 will be determined by the Council.

No relief will not be awarded where:           

  • the rateable value exceeds £100k (where more than one premise in a business the cumulative rateable value exceeds £100k)
  • mandatory relief is granted
  • the property is unoccupied
  • ratepayers take up occupation after 1st April 2017
  • a Section 44a has been applied
  • the property has an increase in RV after 1April 2017 which increases the rate charge above the 1st April 2017 value
  • the ratepayer is a billing authority, any precepting authority, the NHS or a charity.
  • The property is used for the purposes of a public house, any club or society, surgery, clinic or educational establishment

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State Aid

State Aid law is the means by which the European Union regulates state funded support to businesses. Providing discretionary relief to ratepayers is likely to amount to State Aid. However the Supporting Small Businesses relief scheme will be State Aid compliant where it is provided in accordance with the De Minimis Regulations.

The De Minimis Regulations allow an undertaking to receive up to €200,000 of De Minimis aid in a rolling three year period (consisting of the current financial year and the two previous financial years).

In order to ensure that the threshold is not exceeded, qualifying businesses will be required to sign and return an application form.

For informetion about state aid can be found here.

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