Business rates are payable on both occupied and unoccupied assessments. However, there are a number of reliefs and exemptions which may apply.
Mandatory and discretionary rate relief
Community amateur sports clubs
Village shop rate relief
Retail rate relief
Relief for partly occupied properties
Small business rate relief
Business rate exemptions
A transitional arrangement scheme is in place following on from the revaluation of non-domestic property in 2010.
If there are significant changes to your business rates after a revaluation, the scheme phases in these changes by putting a limit of the percentage by which your bill may increase or decrease each year.
Transitional arrangements are automatically calculated by the council and your annual Business Rates bill will be amended in line with them.
Charitable relief can be granted to registered charities carrying out charitable activities. The level of relief is a mandatory 80%. The council has the discretion to decide whether non-profit making organisations should be treated as if they are registered charities. If an organisation is granted charitable relief by the council then it is entitled to 80% mandatory relief. The council also has the discretion to award an additional 20% 'top-up' relief to non-profit making organisations.
All applications for discretionary rate relief (DRR) are considered by a panel of elected members at the Regulatory and Appeals Sub-Committee (Local Tax and Revenues). The members are briefed using the DRR guidelines contained within the Local Government Finance Act (1988) as amended.
Changes to Business Rates Discretionary Rate Relief
On 1 April 2013, as part of the wider localism reforms, the Government introduced the Business Rates Retention Scheme. Prior to this, Councils collected business rates on behalf of Central Government and all revenue was pooled nationally then redistributed. From 1 April 2013 councils retain a 50% share of the business rates collected net of reliefs, but this also means that councils fund 50% of the increases in mandatory and discretionary reliefs.
To be able to deal with the change in funding the council is currently undertaking a financial review and assessment of all of the Discretionary Rate Relief funding for non-profit making organisations to create a new Discretionary Rate Relief scheme that is cost effective; the new scheme regarding non profit making organisations was adopted by the Cabinet on 26 June 2013.
The scheme will affect all new applications for Discretionary Rate Relief from 1 April 2013 onwards and we will review all existing awards. Any changes to the existing awards will take effect from 1 April 2015.
- Where an organisation occupies only one property and that property has a rateable value of less than £6,000 the council will apply Small Business Rate Relief rather than Charitable or Discretionary Rate Relief
This option will be reviewed every year
- Where an organisation occupies only one property and that property has a rateable between £6,001 and £11,999 the council will apply Small Business Rate Relief if the level of Small Business Rate Relief is higher than the Charitable or Discretionary Rate Relief
- Registered charities and not for profit making organisations that have been awarded 80% relief will normally be expected to fund the remaining 20% of business rates that is not covered within the mandatory element
Elected Members will only consider requests for additional reliefs in exceptional cases on their merits, balancing the additional cost against the benefits to the achievement of the councils objectives. Any approvals will be on a time limited basis.
If you are a Registered Charity or a Charity that is exempt from registration you can apply for relief using the downloadable form (pdf, 1.63KB) for this relief.
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Organisations that are registered as CASC with the Inland Revenues Sports Club Unit are entitled to receive 80% relief from business rates.
In order to apply for this relief you will need to provide a copy of the registration certificate supplied by the Inland Revenue.
Some properties in rural areas can receive help with their business rates. A rural area is defined as a settlement with a population of no more than 3,000 which is wholly or partly within the area.
The rural areas which can apply for this relief are highlighted in our current rural settlements list. The list, which will remain in place for the year commencing April 2010 contains the following settlements
We can offer 50% relief to the following businesses that are situated in rural areas
- Post Office - where it is the only Post Office in the settlement and has a rateable value of less than £8,500
- General Store - where it is the only General Store in the settlement and has a rateable value of less than £8,500
- All Food Store - where they have a rateable value of less than £8,500
- Public House - where it is the only Public House in the settlement and has a rateable value of less than £12,500
- Petrol Station - where it is the only Petrol Station in the settlement and has a rateable value of less than £12,500
We also have the discretion to offer up to 100% relief on any non-domestic property in a rural settlement with a rateable value of less than £16,500 (including the extra 50% for those that fall into the above category). We can only use our discretion to offer this relief if we are satisfied that the property is used for a purpose that benefits the local community.
The Government announced in the Autumn statement on 4 December 2014 that it would increase the temporary rate relief of up to £1,000 to all occupied retail properties with a rateable value of £50,000 or less for 2014-15 and increase to up to £1,500 for 2015-16.
The total amount of government funded relief available for each property for each of the years under the scheme is £1,000. The amount does not vary with the rateable value and there is no taper. There is no relief available under this scheme for properties with a rateable value of more than £50,000.
To qualify for the relief the occupied hereditament with a rateable value of £50,000 or less should be wholly or mainly being used as a shop, restaurant, cafe or drinking establishment. In a similar way to other reliefs (such as charity relief) this is a test on use rather than occupation. Therefore hereditaments that are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief.
The relief is discretionary and the council may choose not to grant the relief if it considers that granting the relief will go against the council's wider objectives.
The council will consider applications for discretionary retail rate relief on a case by case basis.
The relief will be awarded in accordance with the guidance issued by the Department for Communities and Local Government and in accordance with the principles for awarding Discretionary Rate Relief which are detailed in the council's Discretionary Rate Relief policy.
Applications will be considered by the Corporate Revenues and Exchequer Manager and appeals will be considered by the Deputy Leader of the Council and two other cabinet members.
If part of your business property is empty, and will remain so for a short time only, you could apply for relief. We will need to know how much of the property is empty and we will arrange for a Valuation Officer to provide a certificate which outlines the proportion of the property which is occupied.
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If your business is suffering hardship that has been caused through exceptional circumstances we can grant discretionary relief up to 100%. Please contact us to find out more about this or use the downloadable form (pdf, 1.37KB) to apply for this relief.
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The scheme was first introduced in April 2005, revised in April 2010 and further updated by the present Government soon after they came into power in October 2010 with the aim of helping small businesses.
In October 2010 the small business rate relief scheme was updated to help small businesses save up to 100% on their business rates. The current temporary increase in small business rate relief which started on 1 October 2010 has now been further extended to 31 March 2016.
The increased levels will now be available to 31 March 2016 for eligible businesses.
You are classed as a small business if
- You have only one property* in England on which you are liable (wholly or jointly) for the payment of non-domestic rates.
- The rateable value of your property is £17,999 or less at the start of the financial year and remains below £18,000 throughout the financial year, and
- Your property is occupied and you are not entitled to claim an other mandatory relief.
*If you pay rates on other assessments they will be disregarded if their rateable value is £2,599 or lower, provided that the total of all your properties rateable values are £17,999 or less.
Small businesses which qualify for this relief will have their rates calculated on a lower multiplier of £0.48p. Properties under £12,000 rateable value (RV) will get a further reduction as follows
- You'll get 100% relief (doubled from the usual rate of 50%) until 31 March 2016 for properties with a rateable value of £6,000 or less. This means you won't pay business rates on properties with a rateable value of £6,000 or less.
- The rate relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.
- If your property has a rateable value below £18,000 (£25,500 in Greater London) you're considered a small business. Even if you don't qualify for small business rate relief, your business rates will be calculated using the small business rates multiplier instead of the standard one. This is the case even if you have multiple properties.
- Any application made up to 30 September 2016 in respect of the 2010-2016 valuation period can be backdated to 1 April 2010.
Occupiers of premises with a rateable value under £12,000 wishing to make a backdated claim prior to 1 April 2012 must complete an application form. A reduction will NOT be given automatically.
You must notify the council of any change in circumstances within four weeks of the day after the change occurred. These changes include
- An increase in the rateable value of another property occupied by the ratepayer outside the area of the council granting the relief.
- Taking occupation of another property.
Please note that it is not possible to claim small business rate relief against empty properties.
Some properties are exempt from Business rates. The District Valuer will not include an exempt property in the Valuation List. Appeals against an entry in the list should be made to the District Valuer.
- Agricultural land and buildings (e.g. arable, meadow or pasture ground; buildings used in connection with agricultural operations on the land and with the keeping and breeding of livestock)
- Fish farms
- Fishing rights (where these are exercisable in a fishery which is regulated by specified legislation)
- Places of religious worship (where these belong to the Church of England or the Church of Wales. For other religions, the property concerned must be certified under the Places of Worship Registration Act 1855. This exemption includes church halls and similar buildings, provided they are used in connection with a place of public religious worship)
- Trinity House property (e.g. lighthouses, buoys and beacons)
- Sewers and accessories (e.g. drains, sewers, manholes, ventilating shafts and pumps. The exemption does not apply to sewage farms or sewage disposal works)
- Property of Drainage Authorities (e.g. structures used for controlling or regulating the flow of water into or out of a watercourse on a main river)
- Parks (provided they are under the management of a relevant authority and are available for free and unrestricted for use by members of the public)
- Property used for the disabled (e.g. properties providing facilities for the welfare and training of disabled persons)
- Air raid protection works (e.g. air raid shelters)
- Swinging Moorings (i.e. a buoy attached to an anchor which rests underwater)
- Road crossings over watercourses (e.g. bridges, viaducts or tunnels constructed to allow river crossings). Property in Enterprise Zones
Properties exempt from unoccupied property rates
- Newly built properties or those where structural alternations or major repairs have taken place (exempt for up to three months from completion of work)*
- Properties formerly occupied for more than 6 weeks (exempt for three months)
- Industrial properties (i.e. where no part has been built or adapted for the purpose of retailing goods or services)
- Properties where occupation is prohibited by law
- Properties where occupation is prohibited by action taken by the Crown Court or any local or public authority
- Listed buildings (subject to a preservation notice under s.58 of the Town and Country Planning Act 1971). Ancient monuments (as scheduled under s.1 of the Ancient Monuments and Archaeological Areas Act 1979)
- Properties with a rateable value of less than £2600
- Unoccupied properties where the owner is entitled to possession only in their capacity as the personal representative of a deceased person
- Unoccupied properties where the owner is subject to a bankruptcy order or a winding-up order under the Insolvency Act 1986
- Unoccupied properties where the owner is entitled to possession only in their capacity as a trustee under a deed of arrangement or as a liquidator under the Insolvency Act 1986
All of the above are stated in broad terms. Within each of the classes a number of conditions may need to be met before the exemption is satisfied. If you need further details about any of these classes, please contact the Business Rates section.
*The Government is introducing a new temporary measure for unoccupied new builds from October 2013. Unoccupied newly built commercial properties will be exempt from unoccupied property rates for up to 18 months (up to state aid limits). This means where the property comes on to the rating list between 1 October 2013 and 30 September 2016. The 18-month period includes the initial three or six month exemption and so properties may, if unoccupied, be exempt from non-domestic rates for up to an extra 15 or 12 months. The relief continues beyond 1 October 2016 for those that become eligible before that date.
The Government has introduced a new discount for those who occupy properties that were previously used for retail purposes and that have been unoccupied for at least 12 months. These properties will attract a 50% discount for up to 18 months, between 1 April 2014 and 31 March 2016.
Which properties will benefit from the relief?
Properties that will benefit from the relief will be occupied hereditaments that:
- When previously in use, were wholly or mainly used for retail.
- Were empty for 12 months or more immediately before their reoccupation.
- Become reoccupied between 1 April 2014 and 31 March 2016.
- Are now being used for any use (ie not just retail use) except for hereditaments now being used wholly or mainly as betting shops, pay day loan shops and pawn brokers.
There is no rateable value limit for the hereditament in respect of either the previous or reoccpupied use. However, State Aid De Minimus limits may limit the amount of relief given.
What is retail use?
In relation to a premises' previous use for the purposes of Reoccupation Relief we consider retail to mean:
i. Hereditaments that were being used for the sale of goods to visiting members of the public:
- Shops (such as: florist, bakers, butchers, grocers, greengrocers, jewellers, stationers, off-licence, chemists, newsagents, hardware stores, supermarkets etc)
- Charity shops
- Post offices
- Furnishing shops / display rooms (such as carpet shops, double glazing, garage doors)
- Car / caravan show rooms
- Second hand car lots
- Petrol stations
- Garden centres
- Art galleries (where art is for sale)
ii. Hereditaments that were being used for the provision of the following services principally to visiting members of the public:
- Hair and beauty services (such as hair dressers, nail bars, beauty salons, tanning shops etc)
- Shoe repairs / key cutting
- Travel agents
- Ticket offices eg for theatre
- Dry cleaners
- PC / TV / domestic appliance repair
- Funeral directors
- Photo processing
- DVD / video rentals
- Tool hire
- Car hire
iii. Hereditaments that were being used for the provision of the following services principally to visiting members of the public:
- Financial services (eg banks, building societies, bureau de change, payday loan shops, betting shops, pawn brokers)
- Other services (eg estate agents, letting agents, employment agencies)
iv Hereditaments that were being used for the sale of food and/or drink to visiting members of the public:
- Take aways
- Sandwich shops
- Coffee shops
The new use of the reoccupied premises can be for any use (ie not just retail uses) except for hereditaments wholly or mainly being used as betting shops, payday loan shops and pawn brokers.
How much relief will be available?
Relief will be available for 18 months from the first day the hereditament becomes occupied as long as the first day falls between 1 April 2014 and 31 March 2016.
Phone: 0191 278 7878 (ask for Business rates team)
8am to 6pm Monday to Thursday
8am to 4.30pm on Friday
Fax: 0191 277 4762
Write to us at:
Newcastle City Council
Newcastle upon Tyne