Agenda item

Purpose of Report

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

Decision

That the content of the report be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

The following updates were noted:

Expanded Retail Discount

In the budget on 29 October 2018, Government announced that it would provide Business Rates Retail Discount to apply in the years 2019/20 (33% discount) and 2020/21 (50%) discount.) This would be for businesses with a rateable value up to (but not including) 51,000. 

In response to Covid-19, in the Budget on 11 March 2020, Government announced that it would increase the discount for 2020/21 to 100% and extend it to include the leisure and hospitality sectors. On 23 March 2020, further measures were announced which resulted in the relief being applied to occupied retail, leisure and hospitality properties in the year 2020/21, as well as removing the rateable value limit.

As announced at the Budget on 3 March 2021 by the Chancellor, the government would continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021.  This would be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties.

Nursery Discount

In response to Covid-19 Government announced a business rates Nursery Discount on 18 March 2020.

As announced at the Budget on 3 March 2021 by the Chancellor, the government would continue to provide eligible nursery properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This would be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £105,000 per business for other eligible properties

Discount for businesses affected by Covid-19

On 25 March 2021, central government announced a £1.5 billion package for businesses affected by Covid-19.

The announcement included:

Ministers have today set out plans to provide an extra, targeted support package for businesses who have been unable to benefit from the existing £16 billion business rates relief for retail, hospitality and leisure businesses. Retail, hospitality and leisure businesses have not been paying any rates during the pandemic, as part of a 15 month-long relief which runs to the end of June this year.

Many of those ineligible for reliefs have been appealing for discounts on their rates bills, arguing the pandemic represented a ‘material change of circumstance’ (MCC).

The government is making clear today that market-wide economic changes to property values, such as from COVID-19, can only be properly considered at general rates revaluations, and will therefore be legislating to rule out COVID-19 related MCC appeals.

Instead the government would provide a £1.5 billion pot across the country that would be distributed according to which sectors had suffered most economically, rather than on the basis of falls in property values, ensuring the support is provided to businesses in England in the fastest and fairest way possible.

Allowing business rates appeals on the basis of a ‘material change in circumstances’ could have led to significant amounts of taxpayer support going to businesses who have been able to operate normally throughout the pandemic and disproportionately benefitting particular regions like London.

At the time of writing this report, the required detail regarding the relief nor the individual local funding allocations were available.

Fire Station Hospitals – potential reduction to rateable value

On 4 December 2020, the Valuation Office Agency (VOA) contacted all Local Authorities to advise they may start to see changes in rateable values of hospitals and fire stations. These categories had been in discussion under the VOA’S Group Pre-Challenge Review (GPCR) procedure.

Rating agents had requested GPCR discussions in early 2020 and submitted checks against representative sample properties within each class. The GPCR’S facilitated the provision and exchange of evidence culminating in agreed valuation schemes.

Public Toilet Relief

After a significant period of time since this relief was first brought forward the Bill allowing for relief to be awarded on public lavatories had finished its passage in Parliament and had received Royal assent. The Non-Domestic Rating (Public Lavatories) Act 2021 was enacted on the 29 April 2021 and made changes to the Local Government Finance Act 1988 . This relief applied retrospectively to 1st April 2020 and therefore refunds would be issued for the Non Domestic Rating Accounts pain in 2020/21.

100% mandatory business rates relief would be given to hereditaments that consisted wholly or mainly of public lavatories.