Agenda item

Business Rates Update


Purpose of Report


To provide the Joint Committee with an update on current issues within non-domestic rates.



That the report be noted.


Alternative Options Considered and Rejected




Reason for Decision


The following updates were noted:


Supporting Small Business Relief Scheme 2017/18-2020/21


This relief was made available to those ratepayers who faced a large increase as a result of the loss of small business or rural rate relief. The transitional relief scheme did not provide support in respect of changes in reliefs, therefore, those ratepayers who lost some or all of their small business or rural rate relief may have faced very large percentage increases in bills from April 2017. Further details relating to the support provided as part of this scheme were set out in paragraph 4.1 of the report.


The number of hereditaments that had been identified for 2018/19 and 2019/20 and had benefitted from the scheme as at 30 April 2019 for the City of Lincoln, North Kesteven and West Lindsey were set out in the tables at paragraph 4.1 of the report.


Once this relief had been announced, officers manually adjusted accounts – this had ensured those ratepayers who faced large increases as a result of the loss of small business or rural rate relief, were not left waiting for relief to be awarded. This was a mandatory relief for which the local authority was compensated for.


Officers noted that although the number of businesses awarded relief has reduced, the total award had increased. This was due to the increase in rateable value for 2019/20 – as a result of the annual uprating and reduction of transitional relief in year.


Discretionary Relief Scheme


The table at paragraph 4.2 of the report showed the number of accounts identified and the total cost of relief for the years 2017/18 to 2019/20 for comparison purposes. A review of awards for 2019/20 would take place in November 2019 and the initial banding scheme would be adjusted to allow for further relief to be awarded.


It was noted that this was a discretionary relief which the local authority was compensated for.


Retail Discount - Autumn Budget 2018


One of the announcements affecting Business Rates as part of the Autumn Budget 2018 related to high streets, recognised as crucial parts of communities and local economies. High street businesses were already benefitting from recent reforms and reductions to business rates announced since Budget 2016 worth more than £12 billion over the next five years. To provide upfront support through the business rates system, the Government was cutting bills by one third for retail properties with a rateable value below £51,000, benefitting up to 90% of retail properties for two years from April 2019, subject to aid status.


With regards to the High Streets, Retail Guidance was issued in November 2018. The guidance confirmed this measure was for 2019/20 and 2020/21 only. Eligibility criteria had been provided and local authorities would be reimbursed using a grant under Section 31 of the Local Government Act 2003


Retail discount awarded for 2019/20 was set out in the table at paragraph 4.3 of the report.


It was noted that this was a discretionary relief which the local authority was compensated for.


Recent Court of Appeal Decision – Automated Transaction Machines


Further to previous reports to this Committee on the Count of Appeal Decision regarding Automated Transaction Machines built into the front of a shop or petrol station no longer being given separate business rates bill, with a final appeal decision awaited by the Supreme Court, it was noted that this continued to have implications for local authorities. Automated Transaction Machines were now included as an appeal threat and provision would need to be made for potential refunds. The potential impact for the City of Lincoln, North Kesteven and West Lindsey was noted as £498,739, £236,530 and £132,851 respectively.


City of Lincoln Business Rates Growth Policy - Awards


The City of Lincoln Council implemented its Business Rates Growth Policy from 1 April 2019 which aimed to a time-limited rate relief discount to new and extended business premises within the city in the interests of building the Business Rate base, supporting economic growth and job creation. This policy supported the Council’s open and partnership focussed approach to delivering growth as set out in the Vision 2020 Strategic Plan, particularly the objectives and ambitions relating to economic growth and reducing inequality.


Since the introduction of the Policy, four businesses had been awarded this relief totalling £55,123.


North Kesteven Business Rates Growth Policy - Awards


North Kesteven District Council implemented its Business Rates Growth Policy in 2016. The rationale for offering businesses incentives to grow and locate in North Kesteven was derived from the ‘Our Economy’ priority published in the Council’s Corporate Plan 2017-2020.


Since the introduction of the Policy, six businesses had been awarded this relief, totalling £411,230.


Non-Domestic Rates Legislation Changes-2019 and Beyond


There had been a number of changes to Non-Domestic Rates legislation due to the introduction of new reliefs to be awarded to businesses. In addition to this, there were significant legislation changes which were to be in place from 1 April 2020 and beyond. These legislation changes had formed part of the one-to-one process with the Non-Domestic Rates Team Leader, ensuring the Shared Service was prepared and proactive in undertaking the required work to introduce the new legislation. This would include system changes, training of staff and communication to businesses.


It was noted that some of the legislation was still in the early stages of conception, with requirements for Ministry of Housing, Communities and Local Government to engage with billing authorities. Details of all legislation was included in Appendix 1 of the report.

Supporting documents: