Discretionary Business Rates Relief Consultation 2017/18

Overview

Hackney Council is consulting businesses on proposals for a Discretionary Business Rates Relief Scheme for allocating financial support for businesses which have seen a significant increase in their Business Rates for 2017/18 as a result of the Government led revaluation. 

Please read this consultation summary to find out more about the proposed changes, and what this could mean for you and your business. 

Consultation background

Business Rates (also known and National Non-Domestic Rates) are taxes paid in non-residential properties such as shops, offices, factories, and pubs.  If you occupy a building, or part of one, which you use for non-domestic purposes, then you will probably be required to pay business rates. 

The Government changed business rates from April this year, following a national revaluation of the ‘rateable value’ of business premises – an estimate of the cost of the letting the property on the open market.  Because property prices have risen dramatically in Hackney over recent years, the borough experienced the largest increase in average rateable value in London, and five times the England average.

Hackney Council is not involved in setting rateable values or Business Rates.  Because the borough was so disproportionally impacted by the new valuations, and many of its businesses face large increases in the Business Rates, the Council, along with others, called on the Government to offer more support to businesses affected.  

Subsequently, the Government allocated a £300million fund to support businesses facing Business Rates rises due to its revaluations.  Local authorities, like Hackney Council, have now been instructed to design their own discretionary business rates relief schemes to determine how the funding is distributed locally. 

Hackney Council has been allocated £7.1 million in total, with £4.1 million available to support businesses in 2017/18.  The amount of funding paid out will be limited to the amount of funding provided by the Government in each year. 

Why your views matter

The level of funding the Council has received from Government is insufficient to support all businesses facing a significant increase after the revaluation.  As such, the consultation gives local businesses the opportunity to provide feedback on the design of the new discretionary relief scheme. 

The consultation gives local businesses a chance to shape how best to distribute the extra local relief. 

Hackney Council’s proposed Discretionary Business Rates Relief Scheme

The Council is proposing to distribute the funding according to the criteria set out below:

Businesses will qualify for relief if they:

• Have a 2017/18 rateable value of £200,000 or less
• Have had a 2017/18 Business Rates bill increase of 12.5% or more, after exemptions and other reliefs, (except pub relief).  For information about other types of business relief available, visit www.hackney.gov.uk/business-rates-ex
• Be small or medium sized firms, which is in line with the Government’s guidance. 

We are also proposing that the following types of property uses aren’t eligible for local discretionary business rate relief

• Payday Lenders
• Betting Shops
• National and Multi-National Companies - these are operated by the same organisation / business and applies where the business runs three or more properties in the U.K or in the U.K and overseas
• Public Sector and Local Government buildings
• Housing Association properties
• Buildings where the London Borough of Hackney is the liable ratepayer
• Properties where the ratepayers were in receipt of re-occupation relief in 2016/17 and / or 2017/18
• Ratepayers occupying properties after 1 April 2017 unless they occupied those properties for a period of one month or more during 2016/17
• Properties which are unoccupied
• Properties where any arrears due from 2016/17 or earlier are not cleared by 30/09/17 or by arrangement with the Council
• Where the award of relief would not comply with EU law on State Aid.

Business relief paid out:

• The amount of relief given to a business in 2017/18 will be proportional to the amount that a businesses’ bill has increased from 2016/17 to 2017/18.
• The amount of funding paid out will be limited to the amount of funding provided by the Government in each year.  No additional funding will be provided by the Council.  Hackney Council has been allocated £7.1 million, with £ 4.1 available to support businesses in 2017/18. 
• Applicants for relief will have to confirm that they have not received any other State Aid that exceeds in total €200,000, including any other rates relief (other than exemptions, transitional or mandatory reliefs). 

How to have your say

We would like to get the Discretionary Rate Relief Scheme up and running quickly so that Hackney businesses that qualify can benefit from the additional financial support. 

Please respond by 26 September 2017.  For further information or to request a paper copy of the questionnaire, please call 020 8356 3466 or email consultation@hackney.gov.uk