New business rate relief schemes announced

30 March 2017

In the Spring Budget the Chancellor announced three new business rate relief schemes. Our software supplier is currently waiting for legislation to be enacted before making system changes that will allow us to send revised bills to the effected businesses.

The details of the three schemes are as follows:

  • Supporting small businesses
  • New discretionary relief scheme
  • New business rate relief scheme for pubs

Supporting small businesses

In the Spring budget the Chancellor announced that a scheme of relief would be made available to those ratepayers facing large increases as a result of the loss of small business or rural rate relief.

The transitional relief scheme does not provide support in respect of changes in reliefs. Therefore, those ratepayers who are losing some or all of their small business or rural rate relief may be facing very large percentage increases in bills from 1 April 2017.

The supporting small businesses relief will help those ratepayers who as a result of the change in their rateable value at the revaluation are losing some or all of their small business or rural rate relief and, as a result, are facing large increases in their bills. To support these ratepayers, the supporting small businesses relief will ensure that the increase per year in the bills of these ratepayers is limited to the greater of:

  • a cash value of £600 per year (£50 per month). This cash minimum increase ensures that those ratepayers currently paying nothing or very small amounts are brought into paying something.
  • the matching cap on increases for small properties in the transitional relief schemes.

Discretionary relief scheme

At the Spring Budget the Government announced the establishment of a £300m discretionary fund over four years from 2017-18 to support those businesses that face the steepest increases in their business rates bills as a result of the 2017 revaluation. The intention is that every billing authority in England will be provided with a share of the £300m to support their local businesses.

Billing authorities will be expected to use their share of the funding to develop their own discretionary relief schemes to deliver targeted support to the most hard-pressed ratepayers. The £300m will cover the four years from 2017/18.

  • £175m in 2017/18
  • £85m in 2018/19
  • £35m in 2019/20
  • £5m in 2020/21

Support for pubs

The Government has also announced a new relief scheme for pubs that have a rateable value of below £100,000. Under the scheme, eligible pubs will receive a £1000 discount on their bill. DCLG plans to publish a consultation on the operation of the relief scheme for pubs shortly. The relief will have effect for 2017/18.

Local authorities will be expected to use their discretionary relief powers (under section 57 of the Local Government Finance Act 1988, as amended) to grant this new relief for pubs in line with the relevant eligibility criteria. They will be compensated for the cost of granting the relief through a Section 31 grant from the government. No new legislation will be required to deliver the scheme.

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