Business rate reductions

In general, there will be no business rates to pay in the first three months that a property is empty. This is extended to six months in the case of certain industrial properties. After that, rates are payable in full unless the property is exempt from the unoccupied rates.

Exemptions include listed buildings, and small properties with rateable values below a certain threshold. These thresholds are:

Rateable Value Thresholds

Year	Rateable Value
2008/09	£2200  RV
2009/10	£15000 RV
2010/11	£18000 RV
2011/12 to 2017	£2600  RV
2017/18 onwards	£2900 RV

Are there any exemptions to this charge?

After the initial three or six month free period expires, the empty property will be liable for 100% of the basic occupied business rate unless:

• It is held by a charity and appears likely to be next used for charitable purposes
• It is held by a community amateur sports club and appears to be next used for the purpose of the club
• The rateable value of the property is less than £2,600 (with effect from 1 April 2011 to 1 April 2017)
• The rateable value is less than £2,900 (with effect from 1 April 2017)
• The owner is prohibited by law from occupying the property
• The owner is prohibited by action taken by the crown, or any other local or public authority from occupying the premises
• If the property is the subject of a building preservation notice within the meaning of the Planning (Listed Buildings and Conservation Areas) Act 1990, or is in a list under section 1 of that act
• The property is included in the schedule of monuments compiled under s.1 to the ancient monuments and archaeological areas act 1979
• The owner is entitled to possession only in his capacity as the personal representative of a deceased person

If the following insolvency or debt administration situation exists:

• A bankruptcy order within parts 8 to 11 of the insolvency act 1986
• The owner is a trustee under a deed of arrangement to which the deeds of arrangement act 1914 applies
• The owner is a company subject to a winding up order made under the insolvency act 1986
• The owner is entitled to possession of the property in his capacity as liquidator or administrator under s112 or s145 of the insolvency act 1986

The government has introduced as a temporary measure the power for Local Authorities to grant an exemption to unoccupied non domestic hereditaments that are wholly or mainly comprised of new structures that are completed after the 1st October 2013 and before the 30th September 2016 subject to state aid limits.

For guidance on state aid see www.gov.uk/state-aid

For further information on this exemption and to obtain details on how to apply please contact us.

A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time we have the discretion to award relief in respect of any unoccupied part subject to state aid limits. For further guidance on state aid see www.gov.uk/state-aid.

To apply for this relief you must contact us as soon as partial occupancy begins. An inspection of the premises will be arranged to confirm the partial occupancy. You may also be required to provide a plan of the premises so that the Valuation Office Agency can accurately apportion the rateable value between the occupied and unoccupied areas.

Charitable rate relief

Charities are entitled to relief from rates on any non-domestic property that is wholly or mainly used for charitable purposes. Relief is given at 80% of the bill. Local councils have discretion to give further relief on the remaining bill subject to state aid limits.

Authorities also have discretion to give relief on all or part of any rate bill for properties occupied by certain non-profit making bodies subject to state aid limits.

From 1 April 2012 the council may also grant up to 100% relief to any ratepayer subject to state aid limits.

For further guidance on state aid see www.gov.uk/state-aid.

Discretionary rate relief policy

The council has discretion to grant relief of up to 100% of the rates on properties occupied by certain non-profit making bodies, or in the case of registered charities entitled to 80% mandatory relief, to top the relief up to 100%. From 1 April 2012 the council may grant up to 100% relief to any ratepayer.

In deciding whether to grant discretionary relief, the council will look at the contribution that the organisation makes to the area. Consideration will also be given to whether services provided replace, enhance or supplement current council facilities and priority will be given to those organisations that benefit the local community specifically. The council must also have regard to the interests of its council tax payers when making its decision.

The broad framework to be used in decision making is provided in the table below:

Organisation	Relief granted
Scouts, Guides etc.	Usually qualify for 80% Mandatory Relief.  In such circumstances 20% top-up relief will be awarded.
Village halls, community centres, youth clubs and playgroups.	20% top-up will be considered, in addition to 80% Mandatory relief. Alternatively, up to 100% Discretionary relief will be considered for such organisations.
Educational organisations	80% mandatory relief but no additional discretionary relief.
Welfare groups	20% top-up will be considered, in addition to 80% Mandatory relief, where the organisation wholly or mainly benefits local residents. Alternatively, up to 100% Discretionary relief will be considered for such organisations specifically benefiting local residents.
Charity shops	20% top-up will be considered only in cases where the charity wholly or mainly benefits local residents.
Sports and recreational organisations	No application will be considered without evidence of an application for Community Amateur Sports Club status.  An exemption to this rule will be applied for small organisations where the need to draft a Constitution would not prove cost effective.  eg. Village bowling club. Discretionary relief will be considered for organisations that do not qualify for Community Amateur Sports Club status on the individual merits of each case, providing the main aims are sporting rather than social. Sporting and recreational clubs operating with a bar, included in the rating assessment, will not normally be awarded discretionary rate relief.  However, if the main purpose of the club is to provide sporting and social activities, and the bar is ancillary to this, relief may still be awarded where the finances of the organisation warrant additional help, but at a % below the maximum level.
Organisations in rural areas	50% top-up relief will be considered on the individual merits of each case, for those businesses located in a rural settlement that qualify for mandatory relief, where the business is classed as a post office, general store, food shop, public house or petrol filling station. Pure discretionary relief for other businesses in a rural settlement will be considered on the individual merits of each case, where there is a proven need for additional financial assistance. In such cases the organisation must benefit the local community, taking into account the financial impact upon council tax payers.
Miscellaneous organisations	Relief will be considered on the individual merits of each case. Consideration will also be given to non-profit making bodies which form part of the city’s history or heritage, or otherwise make a significant contribution to the city’s status, through tourism or other factors.
Awards under the Localism Act 2011	Relief can be granted to any other ratepayer, giving due consideration to the interests of council tax payers.
Central government initiatives	Relief will be awarded in line with DCLG guidance where the Council will be reimbursed in full for the cost of the relief, unless to do so would go against the Council’s wider objectives for the local area.
Part Occupation Relief (s.44a)	The council will consider the use of this discretion to assist ratepayers who are temporarily unable to use the whole of their premises due to unforeseen circumstances, or where there is gradual occupation of premises by a new ratepayer.
Organisations in financial difficulties (hardship relief)	Hardship relief will be considered on the individual merits of each case, when evidenced that it is in the interests of the community to do so.

Other criteria taken into account

Access and provision of facilities

• Is membership open to all sectors of the community.  Excessive membership fees set at a level to exclude the general community will be seen as restrictive
• 75% of members should be City Council residents
• The level of effort made by the organisation to encourage membership from particular groups in the community. For example, young people, women, older age groups, disabled persons, ethnic minorities etc.
• Are facilities made available to people other than members. For example, schools, casual public sessions
• Does the organisation provide facilities which indirectly relieve the authority of the need to do so, or enhance and supplement those which it does provide, particularly if the need is considered a priority by the council 

In general, the club or organisation must show that the criteria by which it considers applications for membership are consistent with the principles of open access.

Extent to which activity is based around a bar and use of profits from it

Relief will not be awarded to those organisations where a bar is the main activity.  It would be expected that any bar profits would be put back to offset club expenses, negating the reliance upon public funds.

Rural Rate Relief

Discretionary relief is not restricted to any particular type of business.

In making a judgement, officers will balance the interests of the individual ratepayer or small community against that of Council Tax payers in general.  If granting relief has a very small, but negative impact on tax payers it may still be reasonable to grant relief.

General applications for relief

The council can award discretionary rate relief to any ratepayer.

In making a judgement, officers will balance the interests of the individual ratepayer or small community against that of council tax payers in general, taking into consideration local factors, and whether the council’s financial position allows for a reduction to be made.

Examples of these factors would be:

• the impact on local employment of the potential decline or loss of existing business
• opportunities for local development and regeneration
• increased employment by encouraging businesses into the area

Central government initiatives

Following the enactment of the Localism Act 2011 which gave local authorities wider powers under s.47 of the Local Government Finance Act 1988 to grant relief, central government announced a number of relief initiatives to assist ratepayers using s.47 powers, with a view to reimbursing local authorities in full via Section 31 grants under the Local Government Act 2003.

The council will award relief to qualifying ratepayers in these circumstances in line with DCLG guidance, unless to do so would go against the council’s wider objectives for the local area.  Application forms may not be required in all cases, and relief can be awarded automatically where officers are satisfied that the qualifying criteria has been met.

Part occupation relief

Under s44A of the Local Government Finance Act 1988, a billing authority has discretion to request that the Valuation Office apportion the rateable value of a property between the occupied and unoccupied parts, thereby reducing the amount payable.

Officers will have discretion to request such an apportionment:

• where there are practical difficulties in occupying a property by a new ratepayer and full occupation is to be phased over a number of weeks or months
• where part of a premises has become redundant due to a temporary reduction in trade and a reduction will alleviate hardship
• any other circumstances which result in partial occupation will be considered on their own merits/individual circumstances

Reductions will not be considered where ratepayers are gradually vacating premises, unless they are vacating to new premises within the council’s area. 

Hardship relief

Consideration will be given on a one off basis to businesses suffering severe financial hardship, where it is evident that it is in the interests of the local community that the ratepayer remains in business because either:

• he/she provides a unique, regularly required amenity, eg. a village general store, or
• the loss of employment provided by the ratepayer would be severely damaging to the local community.

Decision making

In line with the council’s decision-making arrangements all decisions regarding the granting of applications of relief under this Policy are determined by the Assistant Director (Head of Revenues & Benefits).

Appeals

Under the Local Government Finance Act 1988, there is no statutory right of appeal against the Council’s use of discretionary powers.  However, the Council will accept a customer’s request for a review of its decision, to be presented to the Corporate Director - Community and Business Services for further consideration.

Additional notes

• Applications for relief will be considered on their individual merits in relation to the council’s overall financial position.
• Applications for relief can only be backdated to the beginning of the financial year in which the application was made, subject to exceptional circumstances. 
• Annual reviews will be carried out of those organisations in receipt of relief.
• Where relief is granted to organisations funded by the council, the cost of the relief may be met by adjusting grant levels to ensure that there is no adverse effect on council tax payers.

Local discretionary rate relief scheme for revaluation support

This scheme forms part of the council’s wider local discretionary rate relief policy. It sets out the principles upon which we will administer applications for revaluation support from those ratepayers facing the steepest increases in their business rate bill as a result of the 2017 revaluation.

This page sets out the broad framework of principles to be used in decision making for this new scheme covering the four financial years from 1 April 2017 (ie ending on 31 March 2021).

Under the scheme, support will only be allowable where a hereditament’s rateable value for 2017/18 is less than £200,000 and where a qualifying ratepayer’s bill has increased above £600 as a result of the 2017 revaluation.

Subject to the impact on the council’s overall financial position, relief will be awarded to qualifying applicants up to a maximum amount; this being the sum of their net rates charge for 2017/18 less £600 minimum increase. The ratepayer must therefore pay at least the first £600 of any increase due under revaluation, drawing on other rules in place that apply to small businesses.

As this relief is discretionary, we will not grant support in any case where it is not considered appropriate to do so, for example where granting the relief would go against the authority’s wider objectives for the local area. Under this same principle, empty property will also be excluded, as the council discourages leaving property empty as it strives to achieve a vibrant business community.

In making a judgement, we will consider the interests of the ratepayer against that of council tax payers in general, taking into consideration local factors.

Scheme principles

• The rateable value for 2017/18 must be less than £200,000
• The net rates charge for 2017/18 must have increased in comparison to that for 2016/17
• The ratepayer must have been in continuous rateable occupation prior to 1 April 2017 and liable for a rate charge on 31 March 2017 (ratepayers occupying premises after 1 April 2017 will not be eligible for relief)
• Unoccupied properties will not be eligible for relief
• Properties that are not registered on the rating list for a period covering 1 April 2017 will not be eligible for relief
• Businesses who benefit from the small business relief cap of paying no more than £50 per month extra (£600 per year) when compared to last years will not be eligible
• Businesses whose increase in the amount thy are paying compared to last years is less than £50 per month (£600 per year) will not be eligible (to mirror the protection provided for small businesses)
• Ratepayers operating an intermittent occupation/tax mitigation/avoidance scheme will not be eligible for relief
• The scheme will target local or regional (North West) organisations. National or multi-national companies, NHS and public sector organisations will not be considered under the scheme
• In line with the previous principle, multiple property owners and/or occupiers may not be considered eligible for relief
• Any award will be evidenced by a completed application form, including state aid compliance. Relief will not be awarded where the award would not comply with EU law on state aid.

Liability adjustments

• Where a qualifying ratepayer’s rates bill (from 2016/17 as appropriate) is adjusted for any of the following reasons, the amount of their relief due under the term of this policy will be adjusted or removed accordingly:
• An amended 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 re-occupation of the property
• Any other reason

Future years

The scheme for this financial year will end on 31 March 2018, with an entitlement period covering 1 April 2017 to 31 March 2018. However, the scheme is based on a four-year government initiative and therefore for years two, three and four, relief awarded to qualifying individuals will be reduced in line with the government’s specified level of reduction over the four year term:

• Year 1    £247K
• Year 2    £120K
• Year 3    £49K
• Year 4    £7K

Allocation arrangements

The local scheme aims to distribute no more than the government grant provided in any year for this purpose. Subject to the scheme principles, support will be provided on a percentage basis, set against the rate increase incurred from financial year 2016/17 to 2017/18, taking into account the first £600 ceiling that all ratepayers need to pay.

In determining initial allocations (normally at the start of the year), an amount equivalent to approximately 5% of the government funding will be retained as a contingency. This is to cover eligible rate increases that may arise during the remainder of the financial year.

An additional allocation at year end will seek to allocate any remaining balance of that contingency, plus any additional amounts that may be available for redistribution, after allowing for any liability adjustments referred to above.

The same basic percentage of relief entitlement will apply to all eligible properties, after the application of other scheme principles.

Decision making and appeals

In line with the council’s wider rate relief decision-making arrangements all decisions regarding the granting of applications of relief under this policy are determined by the Deputy Director (Customer Services)/Head of Shared Services.

Under the Local Government Finance Act 1988, there is no statutory right of appeal against the council’s use of discretionary powers. However, we will accept a customer’s request for a review of its decision, with appeals to be presented to the Chief Officer (Resources) for further consideration.

There are provisions allowing for 80% mandatory rate relief to be granted to sports clubs that have registered with the Inland Revenue as community amateur sports clubs (CASC). In addition CASCs benefit from a range of tax reliefs.

You are likely to to be successful in applying for registration if you can answer 'yes' to all of the following questions:

1. is membership of the club open to the whole community?
2. are all club facilities available to all members without discrimination?
3. does the club's constitution prevent club profits being distributed amongst its members?
4. does the club provide facilities for, and to encourage, participation in an eligible sport?
5. does the club's constitution provide that on dissolution of the club, any net assets are to be applied for approved sporting or charitable purposes?

For further information see the GOV.UK CASC website.

The scheme provides for rate relief for those businesses in small settlements in rural areas with a population below 3000, and consists of two elements:

50% Mandatory relief is applicable to:

• The sole general store, a food store and the sole post office in a qualifying settlement, whose rateable value is less than £8,500
• The sole public house and the sole petrol filling station in a qualifying settlement, whose rateable value is less than £12,500

From 1 April 2017 the 50% award is doubled to 100% for those that meet the qualifying criteria, with the cost met by central government.

Discretionary relief may be granted to any business in the settlement, whose rateable value is less than £16,500,  which the authority believes is of benefit to the local community. However in exercising this discretion the council must have regard to the interests of its council tax payers as a whole.

What are rural areas and qualifying settlements?

Rural areas are defined by legislation and for this council include all parishes with the exception of Bolton le Sands, Carnforth and Slyne with Hest.

Qualifying settlements must be within a designated rural area and have a population of no more than 3,000 on the prior 31 December. These are reviewed where necessary.

For the purposes of this relief, as all the rural parishes have a population of no more than 3,000, it is proposed that they all be treated as rural settlements with the exception of the following:

• Caton with Littledale be split between Caton and Brookhouse (including Littledale)
• Ellel be split between Dolphinholme, Galgate (to the West of the railway line and North of Salford Road) and the remainder

What are the qualifying criteria?

A general store must be a business consisting wholly or mainly of the retail sale of both food for human consumption (excluding confectionery) and general household goods, and no other such business is carried on in the settlement. Confectionery does not count as food for the purpose of deciding whether a shop is general store.

When deciding whether a business is a general store, food and general household goods are considered as a single unit and together they must form the majority of the goods on sale.

A food store must be a business consisting wholly or mainly of the sale by retail of food for human consumption (excluding confectionery and excluding the supply of food in the course of catering).

The supply of food in the course of catering includes any supply of food for consumption on the premises on which it is supplied; and any supply of hot food for consumption off those premises.

A post office must be used for the purposes within the meaning of the Post Office Act 1953, and no other property in the settlement is used as such.

A public house means premises for which a justices’ on-licence, within the meaning of the Licensing Act 1964 (other than under Part IV of that Act) is in force.

Petrol filling station means premises where petrol or other automotive fuels are sold retail to the general public for fuelling motor vehicles intended or adapted for use on roads.

What if there are two such premises in the settlement?

With the exception of food stores, unfortunately neither can qualify for mandatory relief on that basis, although if either functions as a post office then relief may be claimed on that ground.

If I get 50% mandatory relief, can I also claim discretionary relief?

Yes, additional discretionary relief can be claimed, to take the total relief up to the actual rate charge subject to state aid limits.

Can other businesses apply for discretionary relief?

Yes, discretionary relief can be claimed up to the amount of the actual rate charge subject to state aid limits.

Pure discretionary relief for other businesses in a rural settlement will be considered where there is a proven need for financial assistance. In such cases the business must benefit the local community, taking into account the financial impact on Council Tax Payers.

Search rural areas and business premises

View an interactive map of rural areas and qualifying premises

• On the map you can search for a specific address, or drag, scroll and zoom to an area.
• Tick the relevant boxes on the right hand side to view food shops, petrol stations and pubs.
• Click on points on the map to bring up further information.

Under the scheme, eligible, occupied pubs with a rateable value below £100,000 will receive a £1000 discount on their bill. The relief will have effect for 2017/18.

The Government’s intention is that eligible pubs should:

• Be open to the general public
• Allow free entry other than when occasional entertainment is provided
• Allow drinking without requiring food to be consumed
• Permit drinks to be purchased at a bar.

Any award will be evidenced by a completed application form, subject to state aid compliance.

• Application for pub relief (PDF, 166KB)

For further guidance on State Aid see www.gov.uk/state-aid

The council at its discretion, can award up to 100% relief from business rates to ratepayers who are experiencing hardship subject to state aid limits. However, as the council funds a significant part of the relief itself, cases will only be considered if they are in the interest of the community. Each case will be considered on its own merits but any reduction is the exception rather than  the rule. The test of 'hardship' is not confined strictly to financial hardship - all relevant factors affecting a ratepayer's ability to meet its liability are taken into account.

Also, the council must bear in mind the fact that the government has modernised empty property relief because it is committed to promoting the efficient use of land and property and provide a positive incentive to bring vacant shops, offices, workshops and warehouses back into use. These reforms are intended to encourage owners to re-let, re-develop or sell unused property, thus, improving access to premises and reducing rents for businesses, as well as reducing the need for development on greenfield land.

See small business rate relief  

A £1,500 rates discount is available for office space occupied by local newspapers. This will be for a maximum of one discount per local newspaper and per hereditament for two years from 1 April 2017 subject to state aid limits. For further guidance on state aid see www.gov.uk/state-aid

The Government funded revaluation support scheme

It was announced in the Spring Budget 2017 that the Government will grant £300 million over 4 years 2017/18 – 2020/21 to support businesses facing the steepest increases after the Revaluation.

Lancaster City Council’s share of this fund amounts to:

• £247K  in Year 1 (2017/18)
• £120K  in Year 2 (2018/19)
• £49K    in Year 3 (2019/20)
• £7K      in Year 4 (2020/21)

The Government assumes it will be provided to:

1. Ratepayers facing most significant increases in bills following the 2017 revaluation.
2. Ratepayers occupying lower value properties.

Principles of the Lancaster Revaluation Support Scheme

• The rateable value for 2017/18 must be less than £200,000
• The net rates charge for 2017/18 must have increased in comparison to that for 2016/17.
• Properties that are not in the rating list prior to 1 April 2017 will not be eligible.
• Ratepayers occupying a property on or after 1 April 2017 will not be eligible.
• Unoccupied properties will not be eligible.
• Businesses benefiting from the small business relief cap of paying no more than £50 per month (£600 per year) will not be eligible.
• Businesses whose increase in the amount they are paying compared to last year is less than £50 per month (£600 per year) will not be eligible.
• Ratepayers operating an intermittent occupation/tax mitigation/avoidance scheme will not be eligible for relief.
• The scheme will target local or regional (North West) organisations. National or multi-national companies, NHS and public sector organisations will not be considered under the scheme.
• In line with the previous principle, multi property owners and/or occupiers may not be considered eligible for relief.
• Any award will be evidenced by a completed application form, including state aid compliance. Relief will not be awarded where the award would not comply with EU law on State Aid.

Liability adjustments

Where a qualifying ratepayer’s rates bill (from 2016/17 as appropriate) is adjusted for any of the following reasons, the amount of their relief due under the terms of this policy will be adjusted or removed accordingly:

• An amended 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 re-occupation of the property
• Any other reason

Under the Local Government Finance Act 1988, local authorities can grant a temporary discount to all occupied retail properties with a rateable value of less than £51,000 which will total a third of the bill after Mandatory and non-locally funded discretionary reliefs have been applied. The discount will apply to properties that are wholly or mainly used as shops, restaurants, cafes and drinking establishments in each of the years 2019-20 and 2020-21.

The discount is awarded under section 47 of the Local Government Finance Act 1988 as amended by the Localism Act 2003 and is subject to State Aid de Minimis limits.

• Local discretionary retail discount scheme (PDF, 33KB)
• Retail discount application form (PDF, 113KB)