Supporting small businesses and transitional relief extension
The transitional relief scheme was introduced in 2017. It was to help ratepayers who were faced with higher bills as a result of the revaluation. The scheme ends on 31 March 2022. As a result a small number of ratepayers would face a jump to their full rates bill from 1 April 2022.
In the budget on 27 October 2021 the government announced that it would extend the current transitional relief scheme and the supporting small business scheme (SSB) for one year to the end of the current revaluation cycle. The scheme will restrict increases in bills to 15% for businesses with small properties (up to and including £20,000 rateable value) and 25% for medium properties (up to and including £100,000 rateable value).
Properties that will benefit are those with a rateable value up to and including £100,000 who would have received transitional relief and/or SSB in 2022/23. In line with the existing thresholds in the transitional relief scheme, the £100,000 rateable value threshold should be based on the rateable value shown for 1 April 2017 or the substituted day in the cases of splits and mergers.
The policy does not apply to those in downward transition to lower bills – they will fall to their full bill on 1 April 2022.
Hereditaments that meet the eligibility for Retail, Hospitality and Leisure scheme will be occupied hereditaments which meet all of the following conditions for the chargeable day.
They are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas or live music venue
- for assembly and leisure
- as hotels, guest and boarding premises or self-catering accommodation
At the Autumn Statement on 17 November 2022, the Chancellor of the Exchequer announced that the current relief of 50 per cent would be increased to 75 per cent from 1 April 2023 for eligible ratepayers.
The previous Retail, Hospitality and Leisure schemes were:
- 1 April 2020 to 31 March 2021: 100 per cent relief
- 1 April 2021 to 31 June 2021: 100 per cent relief
- 1 July 2021 to 31 March 2022: 66 per cent relief
- 1 April 2022 to 31 March 2023: 50 per cent relief
The 2023/24 scheme will provide eligible occupied retail, hospitality and leisure properties with a 75 per cent relief up to a cash cap limit of £110,000 per business.
Ratepayers who are eligible and currently in receipt of RHL will have their accounts automatically updated and notified via their annual bills. All ratepayers will be required to complete a cash cap declaration that will be included with their annual bill.
Mandatory charity relief
Section 43 of the Local Government Finance Act1988 allows mandatory relief (80%) to be granted on premises where the ratepayer is a charity or trustees for a charity and the premises are wholly or mainly used for charitable purposes and amended by the Local Government Act 2003 to include Community Amateur Sports Clubs (CASC) which are registered with HMRC as a CASC. These organisations can receive the mandatory (80%) relief.
Charitable Discretionary Relief
Charities are entitled to relief from Business Rates on any non-domestic property, which is wholly, or mainly, used for charitable purposes. Where 80% Mandatory Relief has been granted, the Council has the discretion to remit all or part of the remaining 20% of a Charity’s bill.
The Council has discretion to remit all or part of the bill for certain non-profit making bodies that are not entitled to Mandatory Relief. The Council’s discretionary rate relief policy has been reviewed due to changes in legislation under the Local Government Finance Bill and the Business Rate Retention Scheme which comes into effect from 1 April 2013.
Community amateur sports club
The Charity Commissioners now also recognise most community amateur sports clubs as charitable. Sports clubs will need to be registered with the Inland Revenue and make their facilities available to all members of the public for improving health and fitness. Online services and guidance can be viewed on the Charity Commission website.
Rural rate relief
Certain types of properties in a rural settlement with a population below 3,000 may be entitled to relief. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500, or the only public house or the only petrol station and have a rateable value of less than £12,500. The property has to be occupied. An eligible ratepayer is entitled to relief at 50% of the full charge whilst the local authority also has discretion to give further relief on the remaining bill. The 2016 Autumn Statement confirmed the doubling of rural rate relief from 50% to 100% from 1 April 2017. Local authorities will be expected to use their local discount powers to grant 100% rural rate relief to eligible ratepayers from 1 April 2017.
Localism rate relief
Discretionary relief is given at the discretion of the Council and up to 100% can be given to a ratepayer not entitled to mandatory rate relief (Charity or Rural Rate Relief).
The ratepayer must not be an organisation that could receive relief as a non-profit making organisation or as a sports club or similar and the premises and organisation must be of significant benefit to residents of the island.
The premises and organisation must relieve us of providing similar facilities.
The ratepayer must:
- occupy the premises (no discretionary rate relief will be granted for unoccupied premises)
- provide facilities to certain priority groups such as elderly, disabled, minority groups, disadvantaged groups
- provide significant employment opportunities to residents on the island or provide the residents of the Island with such services, opportunities or facilities that cannot be obtained locally or are not provided locally by another organisation
- demonstrate that assistance (provided by the discretionary relief) will be for a short time only and that any business / operation is financially viable in the medium and long term
- show that the organisation will comply with all legislative requirements and operate in an ethical, sustainable and environmentally friendly manner at all times
Section 44A relief
Where part of a property is unoccupied for a short time, the Council can ask the Valuation Officer to apportion the Rateable Value of the property between the occupied and unoccupied parts. The empty part will receive complete exemption for three months (or six for an industrial property).
After the initial rate-free period expires the occupied business rate will apply to the whole property. If you wish to apply for part unoccupied rates please send an A4 plan of the property as soon as the area has been cleared highlighting the “empty” areas for which relief is requested to the Non-Domestic Rates (Business Rates).
COVID-19 additional relief fund (CARF)
On 25 March 2021 the Government announced a new COVID-19 Additional Relief Fund (CARF) which is available to support those businesses affected by the pandemic, but that are ineligible for existing support linked to business rates for the 2021 financial year only.
This is a discretionary relief and local authorities are required to design their own scheme in line with the published government guidance.
This relief will be paid directly to eligible business rate accounts without the need for an application.
Eligible business include:
a) Ratepayers that have an active business rate account as of 1 December 2021
b) The rateable value of their property is less than £51,000
c) The property is occupied (relief will not be paid where a property is unoccupied)
d) The business is not entitled to or in receipt of Extended Retail Discount (covering Retail, Hospitality and Leisure) or Nursery Discount
e) Ratepayers excluded from the scheme include:
- Isle of Wight Council, parish/town council properties
- properties for personal use (beach huts, stables etc)
- public amenities
- car parks
- government departments
- NHS/medical centres
The amount of relief awarded is dependent on the rateable value of the property and is paid after all other reliefs:
- RV £12,000 or less will receive 100% relief
- RV £12,001 - £25,500 will receive 80% relief
- RV £ 25,501- £50,999 will receive 60% relief
Receipt of this relief will count towards the allowed government support under Subsidy Control Rules (previously known as State Aid).
State aid guidance
View information on state aid guidance.
In very exceptional circumstances the council may remit payment of rates where it is satisfied that the ratepayer would sustain hardship if it did not do so and it is reasonable for it to do so having regard to the interests of its council taxpayers.
Qualifying criteria for Hardship Relief
Hardship Relief may be awarded to a limited company as well as to an individual, or groups of individuals in the case of partnerships. A ratepayer may make application for Hardship Relief whether they are subject to either occupied rates or empty property rates. All relevant factors affecting the ability of a business to meet its liability for rates should be taken into account. The 'interests' of council tax payers may go wider than direct financial interests. For example, where employment prospects in the area would be badly affected by a company going out of business, or where the amenities of an area would be severely affected, for instance, by the closure of the only shop in a village. In order for the council to consider granting hardship relief, an application must be made in writing, including copies of fully audited accounts.
View the Discretionary Rate Relief Policy.
View and download application forms for:
Properties in disrepair
Generally disrepair does not affect the rateable value of properties. The rating system normally treats properties as being in a reasonable state of repair, however there are exceptions. A property might be in disrepair because:
- it has fallen into disrepair over time
- it has been damaged
- it has been vandalised
- there has been a fire or a flood
If work is being undertaken to repair a property and it would be considered economically reasonable then the property is treated as already being in reasonable repair for rating purposes. Depending on the extent of the work being undertaken to improve, extend or enhance a property, it may be that the valuation can be reduced to nil, whilst the works are underway, however the work must be much more than repairs. A reduction will usually be appropriate only when the works are to create a materially different property to the one that currently exists and at the point where the cost to restore the property to its original use is no longer economic in relation to its rateable value. You should contact the Valuation Office as soon as possible and provide all the evidence which supports your view that the property is in a state of substantial disrepair so that the valuation officer can investigate the situation. An inspection by the valuation officer may be required. For further information visit the Valuation Office Agency website, email: firstname.lastname@example.org or telephone 03000 501 501.