Exemptions and reliefs for business rates

Revaluation Support Discretionary Rate Relief Scheme 2017-2018

Revaluation Support Discretionary Rate Relief Scheme 2017/18

At the 2017 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 following the revaluation of premises that occurred from 01 April 2017.

The Council consulted on its proposed Discretionary Rates Relief Scheme for 4 weeks from 10 July 2017 to 8 August 2017. Following the outcome of the consultation, the Council has decided on the following qualifying criteria:

The premises must be a property - 

  • with a current rateable value less than £200,000, and 
  • where there has been an increase in liability (before other reliefs are applied) of more than 12.5% between 2017 - 2018
  • that is not among the type of retailer (see below) which the Council believes should not qualify for the relief, and
  • where the property is occupied and was occupied before 1 April 2017
  • where the relief will be offered for a maximum of 12 months

The following percentages (of the net increase for 2017/18) will be granted as a discount: 

  • year 1, 100% and 
  • year 2, 50% (year 2, 100% support for qualifying businesses in CR4 post code)

Where a qualifying ratepayers 2017/2018 and/or 2016/2017 rates bill is reduced for any of the following reasons, the amount of their relief will be reduced or removed accordingly:

  • a reduction in rateable value in the 2010 and, or 2017 rating lists
  • the provision of a certificated value for the 2010 rating list or historical change
  • the application of any additional rate relief or exemption
  • vacation and/or re-occupation of the property
  • any other reason affecting the award.

The types of property which can qualify for the relief are:

  • Opticians
  • Post offices
  • Furnishing shops/ display rooms (such as: carpet shops, double glazing, garage doors)
  • Car/caravan show rooms
  • Second hand car lots
  • Markets
  • Petrol stations
  • Garden centres
  • Art galleries (where art is for sale/hire)
  • Shoe repairs/ key cutting
  • Travel agents
  • Ticket offices e.g. for theatre
  • Dry cleaners
  • Launderettes
  • PC/TV/domestic appliance repair
  • Funeral directors
  • Photo processing
  • Tool hire
  • Hair and beauty services
  • Restaurants
  • Sandwich shops
  • Coffee shops
  • Pubs
  • Bars
  • Offices 
  • Warehouses
  • Children’s Nurseries
  • Warehouses
  • Workshops
  • Stores
  • Factories

This list is not definitive, and other businesses who are of a similar type to those listed above may also qualify for the local business rate relief.

Exclusions

Properties that are being used for the provision of the following services to visiting members of the public are not eligible for this new discretionary relief scheme:

  • Financial services (e.g. banks, building societies, cash points, bureau de change, payday lenders, betting shops, amusement arcades, pawn brokers) 
  • Other services (e.g. estate agents, letting agents, employment agencies, financial advisers, tutors). 
  • As the Council wishes to support small and medium sized enterprises, this exclusion does not include independent companies or sole traders offering these services to visiting members of the public, subject to no further exclusion applying (see below).
  • Post office sorting office
  • Takeaways (see below for definition and exclusions)
  • Properties that may bring the scheme/area into disrepute

This list is not exhaustive, and other businesses who are of a similar type to those listed above may not qualify for the local business rate relief.

Further Exclusions:

  • Properties that are operated by the same organisation/business. This applies where the business runs five or more properties in the U.K or in the U.K and overseas.
  • Ratepayers in receipt of reoccupation relief in 2016/2017 and / or 2017/2018.
  • Ratepayers occupying properties after 1 April 2017.
  • Properties which were not on the rating list at 1 April 2017. (Relief will not apply where properties are entered into the list retrospectively).
  • Properties which are unoccupied.
  • Properties where any arrears due from 2016/2017 or earlier are not cleared by 30/09/2017 or do not have an active payment arrangement with the Council meaning they must not have been subject to continued recovery action by an Enforcement Agent.
  • Large organisations such as Transport for London, the National Health Service and London Borough of Sutton.  
  • Where the award of relief would not comply with EU law on State Aid (see below).

Any multinationals or large businesses with high turnovers are more likely to be able to pay higher business rate bills than small and medium sized businesses and independents. Furthermore, such businesses are likely to occupy premises in other parts of the country which are seeing a decrease in their business rates bill following the revaluation. In addition, any inclusion of large will be excluded as they are likely to breach the state aid rules.

The Business Improvement District (BID) legislation currently requires businesses to pay the levy and any decision to waive or reduce the BID levy is to be made by the BID Board of Directors. Therefore, this relief will not be applied to any percentage payment towards a BID. 

Takeaways - definition and exclusions:

A takeaway is an establishment where hot food is prepared for consumption elsewhere. Such establishments, unless they operate a seated service (please see below), will be excluded from obtaining retail rate relief, reoccupation retail relief and local business rate relief.

  • Pizza/pasta
  • Kebabs
  • Burgers
  • Fried or coated chicken
  • Ribs
  • Indian/tandoori
  • Chinese/noodle/wok
  • Thai
  • Korean
  • Vietnamese
  • Fish and chips
  • Snack bars/kiosks

The above list is not exhaustive and is cited for illustrative purposes only; other premises being broadly comparable will be treated as such and excluded.

The council (where necessary) will visit to make a determination as to whether a premise will be excluded from obtaining the reliefs.

Premises operating a seated service with table seating of 10 or more will be categorised as a restaurant for the purposes of obtaining any retail rate relief, reoccupation retail relief and local business rate relief.

The above premises remain entitled to any statutory rate reliefs such as small business rate relief.

Notice Periods

The Non-Domestic Rating (Discretionary Relief) Regulations 1989 (S.I. 1989/1059) require the council to provide ratepayers with at least one year’s notice in writing before any decision to revoke or vary a decision so as to increase the amount of business rates the ratepayer has to pay takes effect. Such a revocation or variation of a decision can only take effect at the end of a financial year. Within the Government regulations, local authorities may still make decisions which are conditional upon eligibility criteria or rules for calculating relief which allow the amount of relief to be amended within the year to reflect changing circumstances. 

Subject to a business being eligible to the Council's Revaluation Local Discretionary Rate Relief Scheme 2017/18 and 2018/19, the level of the award will be as set out in the scheme and will apply at that rate for the financial year of the award and will be revoked at the end of that financial year.

If you believe you may qualify for this relief please print, complete and return the Revaluation Support Discretionary Rate Relief Scheme 2017-2018 application form via email (as a scanned document) to businessrates@sutton.gov.uk or to post it to Business Rates, Civic Offices, St. Nicholas Way, Sutton, SM1 1EA.

The information on the completed application form will be used in accordance with the Council’s registration under the Data Protection Act 1998.

To protect public funds the council may use or share the information provided with other organisations that handle public funds to prevent and detect fraud.

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