Autumn Statement 2014 Changes to Business Rates

4 December, 2014

Business rates administration review: interim findings – The government will publish its interim findings in December 2014, setting out a summary of stakeholder responses and providing an update on how the government proposes to respond to businesses’ calls for clearer billing, better sharing of information and a more efficient appeals system.
Small Business Rate Relief (SBRR) – The government will extend the doubling of SBRR for a further year from 1 April 2015. MUA comment; This means that Ratepayers with a single RV under £6,000 will pay no Business Rates, with the relief continuing to £12,000 RV, where it terminates at a 50% level of relief.
Business rates: transitional arrangements – The government will extend the transitional arrangements for properties with a rateable value of £50,000 and below facing significant bill increases due to the ending of Transitional Rate Relief from 1 April 2015 to 31 March 2017. Edit: This will be delivered by the Localism Act so will be subject to state aid limits. MUA comment; The detailed rules are yet to be announced, but based on last year’s parameters, ratepayers formerly threatened with loss of transition will now face a maximum 27% increase. This applies to very few properties.
Business rates: backdating – The government will change the rules so that alterations to rateable values can only be backdated to the period between 1 April 2010 and 1 April 2015 for Valuation Office Agency (VOA) alterations made before 1 April 2016 and ratepayers’ appeals made before 1 April 2015. MUA comment; This is of major impact to the appeals system and would appear to be the funding device for the rest of the reforms. Again, we await detailed rules, but this appears to shift ratepayer’s rights (already compromised by Material Day regulations) further away from a level playing field with the abilities of the VOA
Business rates: discount – The government will increase the business rates discount for retail and food and drink premises with a rateable value of £50,000 and below to £1,500 up to the state aids limit for 1 year from 1 April 2015.
Business rates: indexation – The government will continue the 2% cap on the RPI increase in the business rates multiplier for an additional year from 1 April 2015. MUA comment; Most ratepayers will now face a 2% increase in 2015/16, so long as they are outside the new transitional arrangements (see above). This is a minor concession, saving under £150 on every £100,000 RV.
Business rates: long-term review – The government will conduct a review of the future structure of business rates to report by Budget 2016. The review will be fiscally neutral and consistent with the government’s agreed financing of local authorities. The government will publish terms of reference in due course.

The Autumn Statement also confirmed that agreement has been reached with the Welsh Government on full devolution of non-domestic (business) rates policy. A fully devolved regime will be operational by April 2015.