As announced in the Government’s Autumn Statement on 17 November 2022, the 2023 Supporting Small Business scheme will cap bill increases at £600 per year for those businesses losing eligibility for some or all Small Business Rates Relief or Rural Rate Relief as a result of the 2023 Revaluation.
Supporting Small Business was first introduced at the 2017 Revaluation to support ratepayers facing bill increases greater than the Transitional Relief caps due to loss of Small Business Rates Relief or Rural Rate Relief. Those ratepayers losing some or all of their eligibility for Small Business Rates Relief or Rural Rate Relief will have their bill increase limited to £600.00 per year.
Those who lose entitlement to Small Business Rates Relief due to their rateable value increasing to 51,000 or more will not have to pay the additional Supporting Small Business Supplement (currently 1.3p multiplied by rateable value) while they are entitled to the 2023 Supporting Small Business scheme.
The 2017 Supporting Small Business scheme was provided to support small to medium businesses who had seen large increases in their bills as a result of the 2017 Revaluation. They have therefore had six years of support to allow them to adjust to their full 2017 List bills. Those ratepayers receiving relief under the 2017 Supporting Small Business scheme in 2022-23 will therefore only be entitled to relief under the 2023 Supporting Small Business scheme until 31st March 2024.
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.
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 is less than £2,900 (with effect from 1 April 2017)
- 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 occupying the premises
- If the property is the subject of a building preservation notice within the meaning of the Planning (Listed Buildings and Conservation Areas) Act 1990, or is in a list under section 1 of that act
- 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
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 we have the discretion to award relief in respect of any unoccupied part subject to subsidy control limits. For further guidance on subsidy control see: UK subsidy control regime - GOV.UK (www.gov.uk)
To apply for this relief you must contact us 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 rate 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 subject to subsidy control limits.
Authorities also have discretion to give relief on all or part of any rate bill for properties occupied by certain non-profit making bodies subject to subsidy control limits.
Discretionary rate relief
The council has discretion to grant relief of up to 100% of the rates on properties occupied by certain non-profit making bodies, or in the case of registered charities entitled to 80% mandatory relief, to top the relief up to 100%. From 1 April 2012 the council may grant up to 100% relief to any ratepayer.
In deciding whether to grant discretionary relief, the council will look at the contribution that the organisation makes to the area. Consideration will also be given to whether services provided replace, enhance or supplement current council facilities and priority will be given to those organisations that benefit the local community specifically. The council must also have regard to the interests of its council tax payers when making its decision.
In making a judgement, officers will balance the interests of the individual ratepayer or small community against that of council tax payers in general, taking into consideration local factors, and whether the council’s financial position allows for a reduction to be made.
Examples of these factors would be:
- the impact on local employment of the potential decline or loss of existing business
- opportunities for local development and regeneration
- increased employment by encouraging businesses into the area
Central government initiatives
Following the enactment of the Localism Act 2011 which gave local authorities wider powers under s.47 of the Local Government Finance Act 1988 to grant relief, central government announced a number of relief initiatives to assist ratepayers using s.47 powers, with a view to reimbursing local authorities in full via Section 31 grants under the Local Government Act 2003.
The council will award relief to qualifying ratepayers in these circumstances in line with DCLG guidance, unless to do so would go against the council’s wider objectives for the local area.
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.
You are likely 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?
For further information see the GOV.UK CASC website.
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
From 1 April 2017 the 50% award is doubled to 100% by local authorities using their local discount powers.
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 31 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.
Can other businesses apply for discretionary relief?
Yes, discretionary relief can be claimed up to the amount of the actual rate charge subject to subsidy control limits.
Pure discretionary relief for other businesses in a rural settlement will be considered where there is a proven need for financial assistance. In such cases the business must benefit the local community, taking into account the financial impact on Council Tax payers.
The council at its discretion, can award up to 100% relief from business rates to ratepayers who are experiencing hardship subject to subsidy control limits. 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.
A £1,500 rates discount is available for office space occupied by local newspapers. This will be for a maximum of one discount per local newspaper and per hereditament from 1 April 2017 to 31 March 2025 subject to subsidy control limits. For further guidance on subsidy control see UK subsidy control regime - GOV.UK (www.gov.uk)
The government announced in the Budget on 17 November 2022 that it will provide a Business Rates Retail Discount to apply in the year 2023/2024 to all occupied retail, hospitality and leisure properties. The discount is 75% of the charge after mandatory and non-locally funded discretionary reliefs are applied and up to a cash cap limit of £110,000 per business. The discount is to be applied to properties that are wholly or mainly used as shops, restaurants, cafes, drinking establishments, cinemas or live music venues, for assembly and leisure or as hotels, guest and boarding premises or self-catering accommodation.
The discount is awarded under section 47 of the Local Government Finance Act 1988 (as amended) and is subject to subsidy control limits. In line with the conditions set by the government, a ratepayer may only claim up to £110,000 of support under the 2023/24 Retail, Hospitality and Leisure Relief Scheme for all of their eligible hereditaments. This cash cap applies at a Group company level (so holding companies and subsidiaries cannot claim up to the cash cap for each company) and also to organisations which, although not a company, have such an interest in a company that they would, if they were a company, result in its being the holding company.
Furthermore, the Retail, Hospitality and Leisure Relief Scheme is subject to the Minimal Financial Assistance limits under the Subsidy Control Act. This means no recipient can receive over £315,000 over a 3-year period (consisting of the current financial year and the 2 previous financial years). Extended Retail Discounts granted in 2021/22 do not count towards the limit. Covid business grants received from local government and any other subsidy claimed under the Minimal Financial Assistance or Small Amounts of Financial Assistance limit over the 3-year period should be counted.
Therefore, to claim the Retail, Hospitality and Leisure relief you must not have exceeded either the £110,000 cash cap for 2023/24 or the Minimal Financial Assistance limit of £315,000 over 3 years (including 2023/24).
For further guidance on subsidy control see UK subsidy control regime - GOV.UK (www.gov.uk)
Last updated: 12 May 2023