Circumstances for business rate reductions and reliefs

There are certain circumstances in which full rates may not be payable:

When a property is empty
Where the occupier qualifies for small business rate relief
When the occupier is a charity
Where the occupier is a community amateur sports club
Where the occupier is a "not for profit" organisation
Certain properties which are located within a designated rural area
Where hardship relief is appropriate
Where the property is not fully occupied
Newly built unoccupied properties that completed after 1 October 2013 and before 30 September 2016 subject to state-aid limits

Charities

Registered charities which use premises for charitable purposes are generally entitled to 80% relief from rates. This includes charity shops, provided that the goods sold are wholly or mainly donated.

Certain other organisations, such as universities, which are exempt from registration as a charity may also qualify for relief.

If the relevant conditions are met, this relief is mandatory and it must be granted.

Community amateur sports clubs (CASCs)

Sport clubs registered as community amateur sports clubs with the Inland Revenue qualify for 80% relief.

Further details on how to register as a CASC can be found on GOV.UK - Tax relief for community amateur sports clubs or by writing to:

Inland Revenue Charities
Sports Club Unit
St John's House
Bootle
Merseyside
L69 9BB

Relief for non profit making organisations

Councils may also grant discretionary relief to certain other non-profit making bodies, e.g. sports clubs and community associations.

We have the discretion to 'top-up' any mandatory relief to a maximum 100% relief but as any additional relief is paid for by the council tax payers it will only be granted if the organisation benefits local residents. From 1 April 2012 the council may also grant up to 100% relief to any ratepayer.

Please note any discretionary relief awarded is subject to state aid limits. For further guidance please see GOV.UK - State aid.

Rural rate relief

This was introduced from 1 April 1998 to allow for relief for certain types of properties, which lie within a designated rural settlement.

Properties which qualify are:

Properties which operate as the sole general store or post office in a qualifying rural settlement and have a rateable value of less than £8,500
Properties which operate as the sole public house or petrol filling station within a qualifying rural settlement and have a rateable value of £12,500 or less

The relief is 50% and fully funded by central government. From 1 April 2017 the 50% award will be doubled to 100% for those that meet the qualifying criteria with the cost met by central government.

The council has the discretion to 'top-up' this relief and the scheme also gives the council discretion to allow relief for other business premises in rural settlements if:

The rateable value of the property is £16,500 or less
The property is used for purposes which are of benefit to the local community
To allow relief with regards to the interests of those who pay council tax to the council (since the relief is partly funded from council tax receipts)

Hardship relief

Councils may grant relief to a ratepayer who would suffer hardship if they paid the whole of the rates bill. As this relief is partly funded by the local council, we will usually only grant this relief where it is evident that it is in the interests of the community that the ratepayer remains in business because either:

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

Before the council will consider granting this relief, a written request must be made and copies of audited accounts supplied.

Please note any hardship relief awarded is subject to state aid limits, for further guidance please visit GOV.UK - State aid.

General applications for relief

From April 2012, we can award discretionary rate relief to any ratepayer subject to state aid limits.

In making a judgement, we 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 / loss of existing business
opportunities for local development and regeneration
increased employment by encouraging businesses into the area

Properties in partial occupation

If a property is temporarily only partly occupied, it is not always possible or necessary to create two separate properties in the rating list. For example, where a company phases its removal from one set of premises to another, or where the use of property is temporarily restricted by flood or fire. In these cases it would be inappropriate to have the rating list amended because the circumstances are not permanent.

We can ask the valuation office to determine the rateable values of the occupied and unoccupied parts.

The rates payable on each part can then be worked out and relief is granted so that the ratepayer only pays the full rates for the occupied part plus the rates for the unoccupied part. If an exemption applies to the unoccupied part, however, then nothing is payable for that part.

This relief is given as laid down in section 44a of the Local Government Finance Act 1988 and is subject to state aid limits.

The relief is granted either to the end of the financial year or to the date on which the property ceases to be only partly occupied, whichever is the earlier. This relief can only be extended in exceptional circumstances.

Local Newspaper Relief

The Government provided funding to local authorities so that they can provide a discount worth up to £1,500 a year on office space occupied by local newspapers.

This was due to run for 2 years from 1 April 2017 and has since been extended to 2024/25. Guidance can be found at GOV.UK - The case for a business rates relief for local newspapers.

Retail Discount

Under the Legislation.gov - 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 2019-20 financial year.

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.

For more details you can download the Retail discount scheme (PDF, 48 KB) document.

In response to the coronavirus pandemic, the government announced the Expanded Retail Discount which was extended to include those businesses in the hospitality and leisure industry, removed the Rateable Value limit and increased the discount to 100% without being subject to State aid de minimus limits for the 20/21 financial year.

The expanded retail discount was continued into the 21/22 financial year and carried a 100% discount from 1 April 2021 to 30 June 2021 followed by a 66% discount for 1 July 2021 to 31 March 2022 subject to a cap of £2,000,000 if your business was required to close as at 5 January 2021 or £105,000 if your business was permitted to stay open at that date (please note there is also a total cumulative cap of £2,000,000 for all of your properties).

At the Budget on 27 October 2021, the Government announced a 50% discount for eligible retail, hospitality and leisure businesses subject to a cash cap of £110,000 per business.

For the 2023/24 and 2024/25 financial years the discount has been continued and will be awarded at a 75% discount for eligible retail, hospitality and leisure businesses subject to a cash cap of £110,000 per business.

Furthermore, the Retail, Hospitality and Leisure Relief Scheme is also subject to the subsidies chapter within the UK-EU Trade and Cooperation Agreement (TCA).

The subsidies chapter within the TCA only applies to subsidies over the value of approximately £343,000 per beneficiary over a 3-year period (consisting of the current financial year and the two previous financial years, the Small Amounts of Financial Assistance limit). This discount will be applied to the bill after the application of any reliefs, excluding any local discounts.

The Government has issued guidance on the operation of the scheme, which can be found at GOV.UK - 2022/23 Retail, Hospitality and Leisure Relief Scheme: local authority guidance.