Agenda item

Context:

To provide an update regarding business rate revaluation from 1^st April 2017.

Key Issues:

·         The revised rateable values come into force on 1st April 2017.

·         The Council uses the rateable value to calculate business rate bills by multiplying it by a rate poundage set annually by the Welsh Government.

·         For 2017/18 that poundage is 0.499. New rates bills show the revised rateable value and the amount payable for the 2017/18 financial year.

·         The revaluation exercise has resulted in significant changes in rateable value for some businesses and Welsh Government recognises that businesses need time to adjust to an increase in their rate liability and so have introduced new regulations to provide a transitional relief scheme. No application is required – The Council will automatically apply this relief to eligible businesses as follows:

-       2017/18 75% of the increase in charge.

-       2018/19 50% of the increase in charge.

-       2019/20 25% of the increase in charge.

Qualification for Transitional Relief

•        Ratepayers in receipt of Small Business Rate Relief (SBRR) on 31^st March 2017 which is either reduced or removed as a result of an increase in rateable value following the revaluation.

•        The business premises must be shown in the Rating List on 31^st March 2017.

•        There must be an increase in rate liability greater than £100.

•        The property must be occupied.

•        The ratepayer must continue to be the same as the one liable on 31st March 2017.

•        The ratepayer must not be in receipt of relief under S44A (applies to property which is partially unoccupied for a short time only).

·         If someone qualifies for transitional relief it will be shown on their rates bill.

Small Business Rate Relief (SBRR)

The SBRR scheme will continue into 2017/18. Properties with a rateable value up to £6,000 pay nothing. Properties with a rateable value between £6,001 and £12,000 receive tapered relief. Businesses in receipt of SBRR may also benefit from the transitional relief scheme.

If someone qualifies for small business relief it will be shown on their rates bill.

Targeted High Street Rate Relief Scheme

Welsh Government has recently announced funding of £10 million to be distributed between the 22 local authorities in Wales to provide further assistance to certain retail businesses including those which have seen their rates increase significantly as a result of the revaluation. The scheme is based on the previous Wales Retail Relief Scheme, using broadly the same exceptions and eligibility criteria to define what constitutes a retail property.

Some details of the scheme have only just been finalised but it will provide two tiers of relief. Up to £500 (tier 1) and £1,500 (tier 2) to qualifying properties with a rateable value of £50,000 or less in the financial year 2017/18.

This new High Street relief can be given in addition to SBRR and transitional relief and will be applied to the net bill after all other reliefs have been applied. Relief is given based on the circumstances of the property and the ratepayer on 1^st April 2017. Changes that occur after that date have no impact on eligibility for relief.

Businesses not entitled to the targeted High Street relief include:

•        Properties with rateable value greater than £50,000.

•        Properties not reasonably accessible to the public.

•        Properties situated in out of town retail parks or on industrial estates.

•        Properties that are not occupied.

•        Those in receipt of mandatory charitable rate relief.

Member Scrutiny:

·         Some businesses in Monmouthshire are experiencing business rates increases of up to 585%.

·         The Cabinet Member has written to Mark Drakeford, Cabinet Secretary, Welsh Government, to make him aware of the issues Monmouthshire is experiencing at a local level.

·         Monmouthshire is experiencing an average increase of 7% whilst Cardiff is receiving a decrease of 5%.

·         In England, where there have been business rates increases for small businesses and public houses, these have been capped at an increase of £50 per month and then graduated over a period of time to allow businesses to get used to the increases.  This scheme is not being operated in Wales.

·         There is concern that businesses are not being protected against these large increases in business rates which could lead to disaster for some businesses in Monmouthshire.

·         There is an appeals process which is free.  In the interim, businesses will be required to pay any increases during the appeal process but the money will be reimbursed if the appeal is won.  Appeals will be expedited where there are hardship cases.

·         Bills have now gone out to businesses for their business rates. These bills take account of any small business rates relief that a business might be eligible for and transitional relief but the high street rate relief scheme had not been finalised in time to be incorporated into business rates bills.  Therefore, bills will need to be re-issued in due course to reflect any high street rates relief that businesses might be eligible for.

·         Concern was expressed that hospitality businesses were being targeted with regard to their rateable values.

·         Moderation across Wales has not been applied.