Wednesday, 20 March 2019

Are councils failing to apply discounts on business rates?

A year ago, there was a lot of noise about how high and how unfair business rates were:
Futures Forum: How to revive the health of high streets > make business rates fairer

There has been pressure to act:
Futures Forum: Calling for a Royal Commission into business rates

And yet earlier in the year, it seemed that businesses would have to pay more:
Futures Forum: High street shops to expect rise in business rates

However, the Chancellor has stepped in:
Autumn Budget 2018: Business rates relief for indies confirmed | News | Drapers
Autumn Budget confirms £1.5bn high street relief & digital services tax
Budget 2018: Business rates cut by a third - Hammond bid to save Britain's High Street | Politics | News | Express.co.uk
Budget to offer business rates relief for small shops | UK news | The Guardian

The problem is that councils are not following this up:

Retailers left without promised rates relief

20 MARCH 2019


Many eligible retailers have been left without their business rates discounts worth up to £8,000 as local councils face problems in applying the renewed rates, just two weeks before the start of the new tax year.

The chancellor, Philip Hammond, announced in the 2018 Budget that the government would cut business rates by one third for businesses with a rateable value of less than £51,000 for two years from April 2019.

This will be the first time business rates in England have risen above 50% adding an extra £127.88m in inflationary business rates paid by the retail sector, according to real estate advisor Altus Group.

However, with the new tax year fast approaching, many retailers are still awaiting their discounts or have failed to apply for them, new research has found.

In York, over 1,000 retailers received their new tax demands without the discount having been applied – an error which the council blamed on a lack of software to calculate and apply the reduced rates.

Richmond council has reported that of the 1,250 businesses eligible for the business rates relief, only 400 have applied. Business development service, Invest in Bath, said that less than half of the 800 retailers in the city have applied for the discount despite being issued with demands.

Head of UK business rates at Altus Group, Robert Hayton, said: “Councils should apply the discount automatically to those premises not part of a chain and unlikely to be impacted by state aid rules whilst bills could have been manually adjusted to avoid the uncertainty and subsequent cost of re-billing.”

The Local Government Association said it is aware of the issues as are officials at the Ministry for Housing, Communities and Local Government (MHCLG). It admitted that software suppliers have been slow with updates causing problems with the discounts.

The MHCLG is encouraging councils to distribute the discounts. A spokeswoman said: ”We made it clear to councils that the business rates discount for eligible retailers should be applied when this year’s bills were issued. We provided guidance and many authorities have already complied but would encourage others to implement the discount as quickly as possible.”

A spokesman for the LGA added: “Different authorities will have different approaches – some will send it out automatically and wait for businesses to tell them if they are non-eligible and others will wait for businesses to apply. It is up to councils to establish eligibility.”

The standard tax rate, which applies to all medium and large premises in England with a rateable value over £51,000, and precluded from the new discount, will rise by 2.4% to 50.4p in England on 1 April.

Retailers left without promised rates relief | News | Drapers

For East Devon, here's more information:
Apply for Small Business Rate Relief - East Devon

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