Business Rates Revaluation Relief

Closed 1 Sep 2017

Opened 7 Aug 2017

Overview

National Non-Domestic Rates (NNDR), known as business rates, are charged on most business properties.

Each business property has a rateable value and we use this to calculate the amount of business rates payable.

From 1 April 2017, all commercial properties were given a new rateable value following a revaluation carried out by central government. The consequence of this was that many businesses faced a large increase in their NNDR bills.

In the spring 2017 budget the government announced an extra £300 million for councils to pay for relief for businesses whose bills have gone up following the 2017 revaluation.

We have been allocated £6.9 million over the next 4 years. Councils are responsible for allocating their share of this money to local businesses.

Why We Are Consulting

Southwark’s share of the new funding is:

  • 2017/18 - £4.02m
  • 2018/19 - £1.95m
  • 2019/20 - £0.8m
  • 2020/21 - £0.11m



We would like to hear what local businesses and residents think about our proposed scheme to pay out this money.

Southwark’s proposed ‘revaluation’ scheme

Our proposed scheme is designed to support and provide longer term help from the  impact of revaluation for small and medium size businesses that have had a big increase in their business rates bills.

Relief will be limited to businesses that on 1 April 2017:

  • had a rateable value under £200,000
  • had an increase in their bill of more than 3% after all reliefs have been applied

Businesses won’t qualify if:

  • the property is unoccupied
  • the property was occupied after 1 April 2017
  • the property is occupied by Southwark Council
  • the business occupies more than one property within Southwark

We will not be asking businesses to complete an application form. The relief will be awarded automatically once the scheme is finalised.

The amount of relief a business receives will be linked to how much your bill has increased.

  1. The increase is calculated by the difference between the 2016 and 2017 bill after all reliefs and exemptions have been applied.

Size of business (Rateable Value)

Size of increase

Increase reduced by

Small (0 – 28,000)

3-15%

100%

 

15-50%

100%

 

50%+

100%

Medium (28,001 – 100,000)

3-15%

26%

 

15-50%

42%

 

50%+

55%

Large (100,001 – 200,000)

3-15%

10%

 

15-50%

15%

 

50%+

20%

We understand that some businesses will be experiencing hardship because of the revaluation but might not qualify for this scheme.

  • We will keep back some of our funding to help businesses who can show more evidence of hardship because of the revaluation. In the first year, this fund will be £200,000

Under current funding rules the amount of money we can give through relief awards is restricted.

  • We will review the level of support each year to make sure we are not overspending and still helping those businesses the scheme is intended to help.

Additional Option

The government have given us £6.9million to award to businesses. They have also told us that we should award the funding as follows:

  • 2017/18 - £4.02m
  • 2018/19 - £1.95m
  • 2019/20 - £0.8m
  • 2020/21 - £0.11m

The businesses we believe would benefit most from relief under the new council scheme are already receiving Transitional Relief provided by the government.

The amount of Transitional Relief provided by the government decreases every year so that by the end of the 5th year the business is paying the full bill. This helps businesses transition from their old rates to their new, higher rates.

For this reason we would like more flexibility in how we spread the money over the next 4 years.  We are therefore asking the government if we can have more flexibility as we make our own local policy.

We believe that this alternative funding option can help businesses in most need of relief more effectively, and for a longer period.

  • We would like flexibility to offer more relief as the government’s Transitional Relief is withdrawn.
  • This would help businesses (especially small businesses) cope better and not be in a position where they will receive big increases in their rates bills at any time in the next four years.

We have written to the government to ask them if we can have more flexibility. If the government agrees to recommendations we will still use a similar banded scheme as outlined above.

  • What will change is that the amount of relief available will be reduced this year. Businesses will then receive more relief in year 2, 3 and 4.
  • We expect that this scheme would allow us to reduce increases by around 35% each year.

What Happens Next

What happens next

The responses to the questionnaire will be analysed and taken into account in the final design of the policy. As you will appreciate, Southwark Council receives many comments from consultations and therefore are unable to respond personally to specific issues raised. However all comments and suggestions will be taken into consideration before a decision is made. The consultation results and recommended policy will be presented at a local community council meeting in September 2017.

If the scheme is agreed then we aim to award the relief by the middle of October 2017.

Should you require any further information regarding the proposed scheme please contact ID@southwark.gov.uk.

Areas

  • All Areas

Audiences

  • Anyone from any background

Interests

  • Local Economy and Business