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Business rates relief and reductions

How can I reduce my business rates?



Supporting Small Businesses Discretionary Relief


Supporting Small Businesses relief is to 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 relief and, as a result, are facing large increases in their bills.

 

The increase will be limited to the greater of:

a) a percentage increase p.a. of 5%, 7.5%, 10%, 15% and 15% 2017/18 to 2021/22 all plus inflation. Unlike the transitional relief scheme, for the first year of the scheme the percentage increase is taken against the bill for 31 March 2017 after small business rate relief or

 

b) a cash value of £600 per year (£50 per month). This cash minimum increase ensures that those ratepayers paying nothing or very small amounts in 2016/17 after small business rate relief are brought into paying something.

In the first year of the scheme, this means all ratepayers losing some or all of their small business rate relief will have the increase in their bill capped at £600. The cash minimum increase is £600 per year thereafter. This means that ratepayers who are currently paying nothing under small business rate relief and are losing all of their entitlement to relief (i.e. moving from £6,000 rateable value or less to more than £15,000) would under this scheme be paying £3,000 in year 5.

 

Those on the Supporting Small Businesses relief scheme whose 2017 rateable values are £51,000 or more will not be liable to pay the supplement (1.3p) to fund small business rate relief while they are eligible for the Supporting Small Businesses relief scheme.

 

Ratepayers remain in the Supporting Small Businesses relief scheme for either 5 years or until they reach the bill they would have paid without the scheme (this would be the charge payable as their true rates payable or the charge calculated under the Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2016).

 

A change of ratepayers will not affect eligibility for the Supporting Small Businesses relief scheme but eligibility will be lost if the hereditament (property) falls vacant or becomes occupied by a charity or Community Amateur Sports Club.

 

There is no 2nd property test for eligibility for the Supporting Small Businesses Relief scheme. However, those ratepayers who during 2016/17 lost entitlement to small business rate relief because they failed the 2nd property test but have, under the rules for small business rate relief, been given a 12 month period of grace before their relief ended can continue on the scheme for the remainder of their 12 month period of grace.

 

Other Reliefs


Properties eligible for Charity or Community Amateur Sports Club Relief or properties which are unoccupied are not eligible for Supporting Small Business Relief.  The presence of a Section 44a certificate will not further reduce the bill found under the Supporting Small Business scheme.


All other discretionary reliefs, will be considered after the application of Supporting Small Business Relief in accordance with Central Government guidelines.


Granting of the relief and State Aid


Relief will granted in accordance with Central Government guidelines .The relief will be subject to state aid regulations.


Recalculation of Relief


The amount of discretionary relief awarded may be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value of the hereditament, an adjustment to the liability or the awarding of another relief. This change of circumstances could arise during the year in question or during a later year.


In effect, the relief will be calculated on a daily basis taking into account the above


Backdating of Relief

Where applications are received after 30th September in any year, backdating of a claim is restricted to the 1st of April of that year. For applications received before 30th September then claims may be backdated to 1st April of the previous financial year if applicable. This is accordance with Regulation 47 of The Local Government Finance Act 1988.

How to Apply

If you wish to apply for supporting small business relief, please contact the business rates team on 023 9254 5470 – You will need your account number, we will be unable to discuss your account details without it. We are available between 9.00am and 5.00pm from Monday, Tuesday, Thursday,  Friday (closed Wednesdays and public holidays) or you can Email: businessrates@gosport.gov.uk


Empty Rates

Shops and offices are exempt from rates for the first three months after the property becomes empty. After this period full rates become payable.

Industrial properties are exempt from rates for the first six months after the property becomes empty. After this period full rates will become payable.

Some properties are exempt from empty property rates.

  • properties with a rateable value under £2,900* (*in 2010/11 the threshold was £18,000 and from 01/04/11 to 31/03/17 was £2,600)
  • empty properties of companies in administration or liquidation
  • listed buildings


Please note that the above is intended as a guide only, it is not a definitive statement of law. Further information is available from the council's Business Rates Team on 02392 545470 and the Valuation Office Agency's business rate pages.

 

Solent Enterprise Zone and Business Rate discounts


The Government introduced Enterprise Zones in the 2011 budget to stimulate business growth by providing financial incentives to businesses and to councils. The Solent Enterprise Zone is at the Daedalus Airfield in Lee-on-the-Solent. If you are a business already in the zone or moving into it between 1 April 2012 and 31 March 2018 you could receive a financial incentive as a discount in your business rates for up to five years. This complex area is covered by legislation and we suggest you read it and seek advice before submitting an application for business rates discount.

You can see more details about the Solent Enterprise Zone at www.solentez.co.uk


Mandatory and or Discretionary Reliefs for Charities and Organisations established as not for profit 


Charities are entitled to 80% relief (Mandatory) from the rates on properties that are wholly or mainly used for charitable purposes. Registered Community Amateur Sports Clubs are also eligible to claim mandatory relief of 80%. The council can grant the additional 20% at its discretion. Where relief is applied, then the charge is calculated on the standard multiplier.


The council can also grant up to 100% discretionary relief for a property if it is occupied by an organisation that is not established or conducted for profit.


Discretionary Rate Relief Policy Guidelines


1.  Conditions for Granting 20% Discretionary Relief for charitable organisations in receipt of Mandatory Relief:


 i)          
The premises are not occupied for administrative purposes only.
 ii)  
The property involved is not a shop
 iii) The organisation involved does not operate a bar on the premises
 iv) 
There is reasonable access by all sections of the community to membership (if applicable)
 v) 
The property is not a voluntary –aided school or similar educational organisation entitled to Mandatory relief
 vi) 
Meets local needs in the borough and benefits local people


2. Conditions for granting up to 100% Discretionary Relief for organisations not established or conducted for profit:


 i)           
The premises are not occupied for administrative purposes only.
 ii) 
The property involved is not a shop
 iii)
The organisation involved does not operate a bar on the premises (the operation of a bar will limit the maximum relief to 50%)
 iv)  
Membership is open to all relevant sections of the community
 v)  
Membership cannot be excluded by the votes of existing members
 vi) 
Meets Local needs in the borough and benefits local people


Recalculation of Relief


The amount of discretionary relief awarded may be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value of the hereditament, an adjustment to the liability or the awarding of another relief. This change of circumstances could arise during the year in question or during a later year.


In effect, the relief will be calculated on a daily basis taking into account the above


Backdating of Relief
Where applications are received after 30th September in any year, backdating of a claim is restricted to the 1st of April of that year. For applications received before 30th September then claims may be backdated to 1st April of the previous financial year if applicable. This is accordance with Regulation 47 of The Local Government Finance Act 1988.

State Aid

The relief will be subject to state aid regulations.


How to apply

Click here for the application form.

 

3. Conditions for applications for discretionary relief for all other types of organisation or for discretionary hardship relief


i)             Meets Local needs in the borough and provide significant benefit to local people.

ii)            Its activities are supporting or complimentary to the strategic objectives of the council.

iii)           Must be considered to be in the interest of the local council tax payers to grant the relief

 

Applications  under 3 above will require a separate application to be completed and will considered by The Policy and Organisation Board of Gosport Borough Council which is a public meeting and therefore information provided in your application may be placed in the public domain.


The following information will be required in support of applications for relief under 3:-


a) Completed Application Form 

b) Past two years audited accounts or, in the case of a new business, an estimate of annual income and expenditure.

c) A comprehensive Business Plan incorporating a brief history of the business.

d) Cash flow forecast for a minimum of the next twelve months.

e) Any other information that may be required in individual cases.


Where other reliefs may be available the council reserves the right to require the ratepayer to make application for the other relief(s) first.


Recalculation of Relief


The amount of discretionary relief awarded may be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value of the hereditament, an adjustment to the liability or the awarding of another relief. This change of circumstances could arise during the year in question or during a later year.


In effect, the relief will be calculated on a daily basis taking into account the above


Backdating of Relief

Where applications are received after 30th September in any year, backdating of a claim is restricted to the 1st of April of that year. For applications received before 30th September then claims may be backdated to 1st April of the previous financial year if applicable. This is accordance with Regulation 47 of The Local Government Finance Act 1988.

State Aid

The relief will be subject to state aid regulations.


How to apply

Click here for the Discretionary application form
Click here for the Hardship Relief application form

For further details please contact the Business Rates team on 02392 545470.


Partly Occupied Property Relief - Section 44(A) Relief


Ratepayers are liable for the full non-domestic rate whether the property is fully or only partly occupied. However, in certain circumstances, where a property is partly occupied for a short time, the Council has discretion to award relief for the unoccupied part. As examples, relief may be appropriate if part of your premises can not be occupied following a fire, or if parts are being refurbished.


To apply for Section 44A Relief we request that you send in details of the part occupation and how long it is anticipated that the partial occupation will last.

If we consider that this relief is merited, we will then get back to you requesting detailed plans of the occupied/unoccupied parts.  We will also need to inspect the property to verify the details.  We will send details to the Valuation Office Agency and ask them to apportion the Rateable Value between the occupied and unoccupied parts.


Please note backdated requests are usually refused, as we are unable to verify the details.

 

Public House Relief


Eligibility Criteria


The scheme will provide up to £1,000 relief each year for two years only (1st April 2017 to 31st March 2019) for all eligible public houses who have a rateable value of less than £100,000 on 1st April 2017 subject to state aid limits.


Public House


The definition of a “Public House” means any premises as defined in the Licensing Act 2003, which has a premises license authorising sale by retail of alcohol for consumption on the premises. In addition, the premises must be used principally for retail sales of alcohol to members of the public for consumption on the premises, and sales must not be subject to the condition that buyers reside at or consume food on the premises.  No relief will be given where the premises are unoccupied.


A Public House for the purposes of this relief will exclude:

 

  • restaurants
  • cafes
  • nightclubs
  • hotels
  • snack bars
  • guesthouses
  • boarding houses
  • sporting venues
  • music venues
  • festival sites
  • theatres
  • museums
  • exhibition halls
  • cinemas
  • concert halls
  • casinos


This list is not exhaustive and the Council will decide whether any premise falls within the above definition.

 

Enterprise Zones


Where an eligible property is also eligible for Enterprise Zone relief, then Enterprise Zone relief should be granted and this will be funded under the rates retention scheme by a deduction from the central share. Local authorities should not provide pub relief to properties which would otherwise qualify for Enterprise Zone Government funded relief.

 

Other Reliefs


Public House relief will be granted after applying any other mandatory reliefs and  reductions.


State Aid


Pubs are within the scope of State Aid law as companies within the hospitality sector can and do set up business in other Member States as they trade on a market. Linked enterprises are considered as one single undertaking for the application of the de minimis rule, therefore can receive €200,000 de minimis aid (including that outside of business rates relief) over three years.

 

Recalculation of Relief


The amount of discretionary relief awarded may be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value of the hereditament, an adjustment to the liability or the awarding of another relief. This change of circumstances could arise during the year in question or during a later year.


In effect, the relief will be calculated on a daily basis taking into account the above


Backdating of Relief
Where applications are received after 30th September in any year, backdating of a claim is restricted to the 1st of April of that year. For applications received before 30th September then claims may be backdated to 1st April of the previous financial year if applicable. This is accordance with Regulation 47 of The Local Government Finance Act 1988.

How to apply

If you wish to apply for Public House Rating Relief click here to download a copy of the application form.


Local Newspaper Relief


Eligibility Criteria


The scheme will provide up to £1,500 relief for office space occupied by local newspapers in England, up to a maximum of one discount per local newspaper title and per hereditament, up to state aid limits, for 2 years from 1 April 2017.


Local Newspapers


The relief is to be specifically for local newspapers and by that, the Council means what would be considered a “traditional local newspaper” The relief will not be available to magazines or on-line only publications.


Office Space


The hereditament must be occupied by a local newspaper and wholly or mainly used as office premises for journalists and reporters.


Amount of Relief


The amount of relief is limited to a maximum of one discount per newspaper and will be subject state aid limits


Recalculation of Relief


The amount of discretionary relief awarded may be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value of the hereditament, an adjustment to the liability or the awarding of another relief. This change of circumstances could arise during the year in question or during a later year.


In effect, the relief will be calculated on a daily basis taking into account the above


Backdating of Relief

Where applications are received after 30th September in any year, backdating of a claim is restricted to the 1st of April of that year. For applications received before 30th September then claims may be backdated to 1st April of the previous financial year if applicable. This is accordance with Regulation 47 of The Local Government Finance Act 198

How to apply

Please contact the Business Rate Team on 023 9254 5470 for an application form.


Discretionary Revaluation Relief 2017/18 and 2018/19

 

Funding for this relief is being provided by Central Government up to a fixed level.  In 2018/19 the amount of funding provided will be halved and the Discretionary Revaluation Relief will take this into account.

 

a)    The scheme is designed to assist ratepayers who have suffered significant increases in rate liability due to the revaluation and the subsequent increase to their rateable value.

b)    Relief will not be awarded where the 2017 rateable value is over £200,000

c)    Relief will not be awarded where Mandatory relief is granted.

d)    In assessing any potential entitlement to an award under this scheme the Council will compare the following:

  • The rate liability of the ratepayer at 31st March 2017 after any reliefs and reductions x 365 (A); and
  • The rate liability of the ratepayer at 1st April 2017 after any reliefs and reductions x 365 (B)

e)    Relief will be awarded where the calculation A – B in the above paragraph would result in an increase above 5.0% 

f)     Relief will only be given to premises which are liable for occupied rates.  No relief within this scheme will be granted for unoccupied properties.

g)    Relief will only be granted to ratepayers who were in occupation at 31st March 2017 and in occupation on 1st April 2017 and for each day subsequently.

h)   Ratepayers taking up occupation on or after 1st April 2017 will not be eligible for relief on the basis that new ratepayers would not have suffered from increases due to a revaluation

i)     Relief may be awarded for more than one premises as long as all other criteria are met.

j)      Relief will not be awarded where the ratepayer has applied for a reduction under S44a of the Local Government Finance Act 1988

k)    Relief will not be awarded where the ratepayer is entitled to Supporting Small Business or Public House Rate Relief

l)     Relief will be targeted to local businesses and not those businesses that are national or multi-national in nature.  Local businesses are, for the purposes of this scheme, those which have premises within Hampshire and Isle of Wight

m)  Relief will not be awarded for hereditaments wholly or mainly used for;

a.    Accountants and Accountancy Firms including Financial Advisors

b.    Banks and Building Societies

c.    Betting and Gambling establishments

d.    Cash Machines and ATMS

e.    Charity Shops (Whether Mandatory relief is given or not)

f.     Doctors and GP surgeries, and other publically funded service providers

g.    Foreign Exchange Bureaus

h.    Insurance Agents

i.      Pawn Brokers, Cheque encashment and Pay Day lenders

j.      Solicitors and Law Firms/Agencies

k.    Supermarkets and Discount Stores  and

l.      Telecommunications hereditaments including cable and networking

m.   Businesses that received 100% Enterprise Zone Rate Relief in 2016/17

 

Amount of Relief awarded

 

Relief will be awarded as follows :

 

  • For 2017/18 – 65% of the amount of increase payable will be awarded
  • For 2018/19 – 50% of the relief awarded in 2017/18 under this scheme

 

Recalculation of Relief


The amount of discretionary relief awarded may be recalculated in the event of a change of circumstances. This could include, for example, a backdated change to the rateable value of the hereditament, an adjustment to the liability or the awarding of another relief. This change of circumstances could arise during the year in question or during a later year.


In effect, the relief will be calculated on a daily basis taking into account the above


Backdating of Relief


Where applications are received after 30th September in any year, backdating of a claim is restricted to the 1st of April of that year. For applications received before 30th September then claims may be backdated to 1st April of the previous financial year if applicable. This is accordance with Regulation 47 of The Local Government Finance Act 1988.


How to apply

If you wish to apply, please click here to download a copy of the application form

Retail Relief/Empty New Builds/Reoccupation Relief


These reliefs are no longer available, the cut off date for applying has expired.


State Aid and Discretionary Rate Relief


State aid is a Member State’s financial aid to business, but small amounts of aid (known as De Minimis State Aid) may not count as State aid if granted within certain criteria.


We are interested in De Minimis State Aid in the form of any financial assistance that you may have received from a public body (borough council or county council, HM Revenue & Customs, central government or a European member state). This will include locally determined business rate discounts for premises occupied elsewhere in England.  If the threshold limit is exceeded then relief cannot be granted and any relief granted that exceeds the threshold must be immediately repaid.  For further details please refer below:


State aid is a Member State’s financial aid to business which meets all the criteria in Article 1071(1) of the Treaty on the Functioning of the European Union.Article 107(1) declares that State aid, in whatever form, which could distort competition and affect trade by favouring certain undertakings or the production of certain goods, is incompatible with the common market - unless the Treaty allows otherwise.

Small amounts of aid (known as De Minimis State Aid) may not count as State aid in the sense of Article 107(1).As a possible recipient of De Minimis State Aid, you are required to demonstrate that you are entitled to receive a discretionary business rate discount within the De Minimis State Aid threshold.You should note carefully the requirements needed to comply with the European State Aid rules and if need be, refer to the relevant legislation. You are being considered for assistance under The De Minimis Regulations 1407/2013(as published in the Official Journal of the European Union L352 24.12.2013) can be downloaded at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:352:0001:0008:EN:PDF. We need to know if you have received or if you expect to receive any De Minimis State Aid in the current financial year or the previous 2 financial years, usually where De Minimis aid has been provided, you will have received a letter advising you that the assistance you were given was awarded under the De Minimis Regulation.

The ceiling for De Minimis State Aid is €200,000 over any rolling three financial year period, effectively the current financial year and the two previous financial years, the ceiling for undertakings involved in road transport is €100,000.  If some aid has been received by the undertaking in previous years but this does not exceed the De Minimis limit, then a partial business rate discount may be granted up to the De Minimis threshold level.  This threshold applies to the total of all aid received by a parent company/group of businesses rather than just the particular subsidiary.

 

For exchange rate purposes, the Commission's exchange rate should be used as it is or was on the day the aid was granted. The reference rates can be found at http://ec.europa.eu/budget/contracts_grants/info_contracts/infoeuro/infoeuro_en.cfm

 

De Minimis Aid cannot be given:

 

  • to enterprises in road haulage operations for the acquisition of road freight transport vehicles;
  • to enterprises in the agriculture sector (with the exception of those active in processing and marketing of agricultural products); to enterprises active in the coal sector; to undertakings in difficulty; or for directly export-related activities; or
  • towards the same costs that are being supported under another block exemption or notified scheme. It is unlawful to provide De Minimis Aid for costs being funded under the state aid cover of an exemption or notified scheme, if it means the specific allowable aid intensity will be exceeded.

 

The following is not a comprehensive list of all possible forms of aid. However, it should give you an indication of common forms of aid which you may have been given over the past three years. If you are in any doubt as to whether previous assistance received would constitute De Minimis assistance please raise your concerns with us as soon as possible.

 

Business rate discounts on properties elsewhere in England

State provision of goods or services on preferential

terms

Preferential interest rates

State grants

Guarantees of loans on especially favourable terms

Preferential public ordering

State guarantees, whether direct or indirect, to credit operations preferential re-discount rates

Acquisition of land or buildings either gratuitously or on favourable terms

Reduction of, or exemption from, charges or taxes, including accelerated depreciation and the reduction of social contributions

Tax relief

Provision of goods and services on preferential terms

Deferred collection of fiscal or social contributions

Tax credits

Indemnities against operating losses

Assistance financed by special levies

State guarantees or holdings

Reimbursement of costs in the event of success

Capital transfers

Certain State holdings in the capital of undertakings

Direct subsidies

Interest rate relief

Tax exemptions

Dividend guarantees

 

 

For further details, applicants should refer to The De Minimis Regulations 1407/2013(as published in the Official Journal of the European Union L352 24.12.2013) can be downloaded at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:352:0001:0008:EN:PDF.



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