Business Rate Reductions
Unoccupied Property Rating
In general, there will be no business rates to pay in the first three months that a property is empty. This is extended to six months in the case of certain industrial properties. After that, rates are payable in full unless the property is exempt from the unoccupied rates.
Exemptions include listed buildings, and small properties with rateable values below a certain threshold. These thresholds are:
Rateable Value Thresholds
| Year |
Rateable Value |
| 2008/09 |
£2200 RV |
| 2009/10 |
£15000 RV |
| 2010/11 |
£18000 RV |
| 2011/12 (to 2015) |
£2600 RV |
Are there any exemptions to this charge?
After the initial three or six month free period expires, the empty property will be liable for 100% of the basic occupied business rate unless:-
- It is held by a charity and appears likely to be next used for charitable purposes.
- It is held by a community amateur sports club and appears to be next used for the purpose of the club.
- The rateable value of the property is less than £2,600 (with effect from 1st April 2011)
- The owner is prohibited by law from occupying the property.
- The owner is prohibited by action taken by the crown, or any other local or public authority from accupying the premises.
- The property is included in the schedule of monuments compiled under s.1 to the ancient monuments and archaeological areas act 1979.
- The owner is entitled to possession only in his capacity as the personal representative of a deceased person.
If the following insolvency or debt administration situation exists:
- A bankruptcy order within parts 8 to 11 of the insolvency act 1986.
- The owner is a trustee under a deed of arrangement to which the deeds of arrangement act 1914 applies.
- The owner is a company subject to a winding up order made under the insolvency act 1986.
- The owner is entitled to possession of the property in his capacity as liquidator or administrator under s112 or s145 of the insolvency act 1986.
Partly Occupied Property Relief
A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time; e.g. where a company phases its removal from one property to another; Lancaster City Council has the discretion to award relief in respect of any unoccupied part.
To apply for this relief you must contact the Business Rate Section as soon as partial occupancy begins. An inspection of the premises will be arranged to confirm the partial occupancy. You may also be required to provide a plan of the premises so that the Valuation Office Agency can accurately apportion the rateable value between the occupied and unoccupied areas.
Charitable and Discretionary Relief
Charities are entitled to relief from rates on any non-domestic property that is wholly or mainly used for charitable purposes. Relief is given at 80% of the bill. Local councils have discretion to give further relief on the remaining bill.
Authorities also have discretion to give relief on all or part of any rate bill for property occupied by certain non-profit making bodies. They can also consider giving rate relief in cases of hardship or where part of a property is beyond use for a certain period.
Rate Relief for Community Amateur Sports Clubs
There are provisions allowing for 80% mandatory rate relief to be granted to sports clubs that have registered with the Inland Revenue as community amateur sports clubs (CASC). In addition CASCs benefit from a range of tax reliefs through HM Revenue and Customs.
You are likely to to be successful in applying for registration if you can answer "yes" to all of the following questions:
- is membership of the club open to the whole community?
- are all club facilities available to all members without discrimination?
- does the club's constitution prevent club profits being distributed amongst its members?
- does the club provide facilities for, and to encourage, participation in an eligible sport?
- does the club's constitution provide that on dissolution of the club, any net assets are to be applied for approved sporting or charitable purposes?
Further information on CASC registration and the relevant application forms can be viewed and downloaded at
http://www.hmrc.gov.uk/charities/casc/index.htm
or call the HM Revenue and Customs Sports Clubs Unit on 0845 3020203
Rate Relief for Businesses in Rural Areas
The scheme provides for rate relief for those businesses in small settlements in rural areas with a population below 3000, and consists of two elements:
50% Mandatory relief is applicable to:
- The sole general store, a food store and the sole post office in a qualifying settlement, whose rateable value is less than £8,500
- The sole public house and the sole petrol filling station in a qualifying settlement, whose rateable value is less than £12,500
Discretionary relief may be granted to any business in the settlement, whose rateable value is less than £16,500, which the authority believes is of benefit to the local community. However in exercising this discretion the council must have regard to the interests of its council tax payers as a whole.
What are rural areas and qualifying settlements?
Rural areas are defined by legislation and for this council include all parishes with the exception of Bolton le Sands, Carnforth and Slyne with Hest.
Qualifying settlements must be within a designated rural area and have a population of no more than 3,000 on the prior 31st December. These are reviewed where necessary.
For the purposes of this relief, as all the rural parishes have a population of no more than 3,000, it is proposed that they all be treated as rural settlements with the exception of the following:
Caton with Littledale be split between Caton and Brookhouse (including Littledale).
Ellel be split between Dolphinholme, Galgate (to the West of the railway line and North of Salford Road) and the remainder.
What are the qualifying criteria?
A general store must be a business consisting wholly or mainly of the retail sale of both food for human consumption (excluding confectionery) and general household goods, and no other such business is carried on in the settlement. Confectionery does not count as food for the purpose of deciding whether a shop is general store.
When deciding whether a business is a general store, food and general household goods are considered as a single unit and together they must form the majority of the goods on sale.
A food store must be a business consisting wholly or mainly of the sale by retail of food for human consumption (excluding confectionery and excluding the supply of food in the course of catering).
The supply of food in the course of catering includes any supply of food for consumption on the premises on which it is supplied; and any supply of hot food for consumption off those premises.
A post office must be used for the purposes within the meaning of the Post Office Act 1953, and no other property in the settlement is used as such.
A public house means premises for which a justices’ on-licence, within the meaning of the Licensing Act 1964 (other than under Part IV of that Act) is in force.
Petrol filling station means premises where petrol or other automotive fuels are sold retail to the general public for fuelling motor vehicles intended or adapted for use on roads.
What if there are two such premises in the settlement?
With the exception of food stores, unfortunately neither can qualify for mandatory relief on that basis, although if either functions as a post office then relief may be claimed on that ground.
If I get 50% mandatory relief, can I also claim discretionary relief?
Yes, additional discretionary relief can be claimed, to take the total relief up to the actual rate charge.
Can other businesses apply for discretionary relief?
Yes, discretionary relief can be claimed up to the amount of the actual rate charge.
The council has a limited budget from which awards of discretionary rate relief can be made and whilst willing to accept any application for discretionary rate relief under this scheme, it will particularly welcome applications which meet the following criteria.
- The business is a small business
- Accounts for the accounting year ending in the preceding business rate year (preferably certified) show that the ‘value added per full-time equivalent employee’ is less than £6,660 per annum
- The business had employed the full-time equivalent of five or less persons in the accounting year ending in the preceding business rate year and had not reduced its employment levels in the six months following the end of that financial year.
Search rural areas and business premises
View an interactive map of rural areas and qualifying premises
• On the map you can search for a specific address, or drag, scroll and zoom to an area.
• Tick the relevant boxes on the right hand side to view food shops, petrol stations and pubs.
• Click on points on the map to bring up further information.
Hardship Relief
The council at its discretion, can award up to 100% relief from business rates to ratepayers who are experiencing hardship. However, as the council funds a significant part of the relief itself, cases will only be considered if they are in the interest of the community. Each case will be considered on its own merits but any reduction is the exception rather than the rule. The test of 'hardship' is not confined strictly to financial hardship - all relevant factors affecting a ratepayer's ability to meet its liability are taken into account.
Also, the council must bear in mind the fact that the government has modernised empty property relief because it is committed to promoting the efficient use of land and property and provide a positive incentive to bring vacant shops, offices, workshops and warehouses back into use. These reforms are intended to encourage owners to re-let, re-develop or sell unused property, thus, improving access to premises and reducing rents for businesses, as well as reducing the need for development on greenfield land.
Small Business Rate Relief
See: Small Business Rate Relief
How do I apply?
Contact the Business Rates team at the address below.