Issue - meetings

Purpose of Report

To provide the Shared Revenues and Benefits Joint Committee with an update on current issues within non-domestic rates, related to City of Lincoln Council, North Kesteven District Council and West Lindsey District Council. The report was not intended to include non-domestic rate performance matters, as this was covered within the Performance Update reported to Joint Committee today.

Decision

That the content of the report be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

The report included some of the changes announced as a result of the Government’s financial support provided to businesses in the form of NDR relief, as well as forthcoming changes to the NDR system.

The following updates were noted:

NDR Changes and Significant Reliefs/Discounts

At the Autumn Statement on 30 October 2024, the Chancellor announced that the Government would continue to provide a package of NDR measures to support businesses in England.

• The retail, hospitality and leisure relief (RHL) would continue for 2025/26 at 40% up to £110,000 per business. Although this relief was to continue, the reduction from 75% to 40% would be significant for a lot of businesses.
• The multipliers were announced for 2025/26 – the small business multiplier would be frozen at 49.9p again. The standard multiplier would be uprated by the September 2024 CPI rate to 55.5p (2024/25 54.6p)
• Going forward from 2026/27 the Government intended to introduce two permanently lower multipliers for retail, hospitality and leisure properties. This would be paid for by a higher multiplier for properties with a rateable value (RV) of above £500,000. This meant that overall, there would be 5 different multipliers depending on the rateable value of the hereditament and the activities carried out at the hereditament. The details of these multipliers were not expected to be announced until the 2025 budget.
• Private schools were to lose their mandatory charity relief (80%) with effect from 1^st April 2025, subject to Parliamentary process. Private schools which were ‘wholly or mainly’ concerned with providing full time education to pupils with an Education, Health and Care plan would remain eligible for the relief.

Retail, Hospitality and Leisure Relief

Eligibility criteria for the Retail, Hospitality and Leisure Relief was set out by the Department for Levelling Up, Housing and Communities (DLUHC), now called Ministry of Housing, Communities and Local Government (MHCLG) and issued to Local Authorities on 20 December 2021. No changes were made to the qualifying criteria for the year 2024/25.

This relief had been extended for the year 2025/26 –whether there were any changes to the currently eligibility was pending the details being released by Government.

This was expected to end on 31 March 2026, with the introduction of the Retail, Hospitality and Leisure (RHL) multipliers.

The table at paragraph 4.5 of the officer’s report reflected the significant reduction in the amounts awarded in the last three years (previously known as the Expanded Retail Discount (ERD) scheme), with an estimate on the award to be granted in 2024/25.

Multipliers from 2026

The most  ...  view the full minutes text for item 49

Purpose of Report

To provide the Shared Revenues and Benefits Joint Committee with an update on current issues within non-domestic rates, related to City of Lincoln Council, North Kesteven District Council and West Lindsey District Council. The report was not intended to include non-domestic rate performance matters, as this was covered within the Performance Update reported to Joint Committee today.

Decision

That the content of the report be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

The report included some of the changes announced as a result of the Government’s financial support provided to businesses in the form of business rates relief. The report also focused on the financial impact of recent appeals and reductions to rateable values.

The following updates were noted:

NDR Changes and Significant Reliefs/Discounts

At the Autumn Statement on 22 November 2023, the Chancellor of the Exchequer announced a continued Government package of business rate measures to support businesses in England:

• Retail, hospitality and leisure relief would continue for 2024/25 at 75% up to £110,000 per business

• A freezing of the small multipliers for a further year at 49.9p an increase in the standard multiplier from 51.2p to 54.6p.

Retail, Hospitality and Leisure Relief 2023-24

Eligibility criteria for the Retail, Hospitality and Leisure Relief was set out by the Department for Levelling Up, Housing and Communities (DLUHC) and issued to Local Authorities on 20 December 2021, with no changes to the qualifying criteria for the year 2023/24. This relief had been extended for the year 2024/25. The table at paragraph 5.5 of the officer’s report reflected the significant reduction in the amounts awarded in the last three years (previously known as the Expanded Retail Discount (ERD) scheme), with an estimate on the award to be granted in 2024/25.

Potential reductions to rateable values were contained within paragraph 6, which included hotels occupied by asylum seekers.

Under Section 66(1) of the Local Government Finance Act 1988, a property was domestic if used for living accommodation with the only exception being in Section 66(2) which stated that a property was not domestic if being used in the course of a business providing short-stay accommodation to individuals whose sole or main residence was somewhere else.

Where a hotel was used as accommodation for refugees/asylum seekers, the occupants did not have a sole or main residence elsewhere. Therefore, the hotel should be brought into the Council Tax listings with the maximum charge being a Band H property.

The Valuation Office had recently removed a hotel from the Non Domestic Rating list and brought this into the Council Tax listings as a Band H Council Tax dwelling.(not in our districts) The result of this was a loss of Non Domestic Rating income to the authority which was not offset by the amount of a Council Tax paid for a Band H dwelling.

The Valuation Office were making changes to properties that they knew about, but as the Home Office would likely have a register of the properties being used  ...  view the full minutes text for item 42