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Business rates discretionary relief options

Business rates discretionary relief options

The government announced a revaluation of all properties, this took effect from 1 April 2017 and has resulted in a substantial increase in the rateable values of properties and therefore an increase in business rates bills.

A system of transitional relief was introduced to make sure that businesses don’t face significant changes in any single financial year but are phased in as far as possible. However, many businesses are facing increases in their bills, even after transition relief is applied.

As part of the budget announcement in March 2017, the Chancellor announced that £300m will be allocated to local authorities in England over the next 5 years (£180m in 2017/18) to enable them to provide discretionary relief to businesses facing substantial increases in their bills.

Grant and Conditions

The amount allocated to the Council from the discretionary relief fund is as follows:

2017-18 Gross bill increase (£000s) Amount of discretionary pot awarded (£000s)
2017-18 2018-19 2019-20 2020-21
12,133 1428 694 286 41

The amount given to each local authority has been calculated by reviewing the number of businesses with a rateable value of less than £200k and facing a bill increase of more than 12.5% before any other relief is applied.

The amount allocated to an authority is the maximum amount that they will be compensated in each year for relief provided to businesses facing an increase in their bill as a result of the revaluation, which means that any relief provided to businesses in excess of this allocation will have to be funded by the authority.

The discretionary relief fund can only be used to support ratepayers facing an increase in their bills following revaluation.

Assistance under a “relief scheme” is regarded as State Aid. It will therefore be necessary to establish that an award under this scheme will not result in the business receiving more than €200,000 of this kind of aid in the last three years.

Options

Option 1

  • Rateable value of £200k or less
  • Excluding empty properties
  • Properties facing an increase of more 12.5% in their bill for 17/18 onwards before any reliefs and discounts applied and a net increase in their bill after reliefs and discounts when compared to 16/17
  • Less than €200,000 State Aid in the current & previous 2 financial years
  • Retaining a contingency of 5%

Any businesses meeting the above criteria would receive a discount towards the increase in their bill, the percentage discount that would be offered to businesses under this option is presented in the table below:

2017/18 2018/19 2019/20 2020/21
Grant amount 1,427,894 693,549 285,579 40,797
Amount allocated 1,356,274 658,552 271,055 37,939
Amount remaining 71,620 34,997 14,524 2,858
% discount* 28.75% 8.13% 2.59% 0.31%
Number of properties 2,137 2,044 2,122 2,206

* percentages quoted above are based on latest information available as at end of May 207, actual percentage awarded may vary.

Option 2

  • Rateable value of £100k or less
  • Excluding empty properties
  • Properties facing an increase of more 12.5% in their bill for 17/18 onwards before any reliefs and discounts applied and a net increase in their bill after reliefs and discounts when compared to 16/17
  • Less than €200,000 State Aid in the current & previous 2 financial years
  • Retaining a contingency of 5%

Any businesses meeting the above criteria would receive a discount towards the increase in their bill, the percentage discount that would be offered to businesses under this option is presented in the table below:

2017/18 2018/19 2019/20 2020/21
Grant amount 1,427,894 693,549 285,579 40,797
Amount allocated 1,356,383 658,793 271,143 38,083
Amount remaining 71,511 34,757 14,436 2,714
% discount* 65.49% 15.37% 4.48% 0.51%
Number of properties 1,967 1,869 1,943 2,019

* percentages quoted above are based on latest information available as at end of May 207, actual percentage awarded may vary.

Consultation

We have explored a number of options for distributing the allocated discretionary relief funds to local businesses and are proposing to adopt one of two schemes, which we believe will make the most effective use of the available funds and help the businesses that have been the hardest hit by the revaluation.

Prior to adopting a scheme, we would like to give businesses the opportunity to provide feedback and therefore will be holding two consultation sessions:

• Thursday, 3rd August – Chiswick Business Lunch – Clayton Hotel, 626 Chiswick High Road, London W4 5RY
• Wednesday, 9th August – Hounslow Business Lunch– Indian Gymkhana Club, Thornbury Avenue, Osterley TW7 4NQ

We look forward to hearing your opinions at one of the above sessions, if you are not able to attend the consultation sessions you can still provide feedback on the proposed schemes by sending an email to the following email address:
curevenues@hounslow.gov.uk

Feedback sent to the above email address along with feedback collected from the consultation sessions will be taken into account when deciding on which scheme to adopt.

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