Business rates - FAQs
Non-Domestic Rates (sometimes referred to as Business Rates) are
an important part of the financing of Local Government. The present
system was brought into effect from April 1, 1990 and replaced the
old General Rating system that applied to both domestic and non
domestic properties alike. Some answers to the most frequently
asked questions are as follows.
Why do I have to pay Business (or Non-Domestic)
Rates?
Business Rates are a national tax which and are a contribution
made by businesses towards the cost of services provided by the
Maidstone Borough Council, Kent County Council and the Police
and Fire and Rescue Services. All the money collected is passed on
to the Government, who then redistributes the money to each of
these authorities on the basis of the population of the
area.
Why do I have to pay for the collection of my trade
refuse?
Whilst Domestic waste is collected within costs covered under
the domestic rate, this is not the case with shops, factories and
other businesses under the non-domestic rating system. Under
Section 34 of The Environmental Protection Act 1990 all businesses
have a Duty of Care to dispose of their waste through authorised
trade waste collection services and must be able to prove this.
Those committing an offence face an unlimited fine and possible
imprisonment.
How are my rates calculated?
A rate liability is calculated by multiplying the Non-Domestic
Rating Multiplier (formerly known as a rate in the pound or the
Rate Poundage) by the Rateable Value of a property.
What is this Multiplier or Rate Poundage?
This is a value set by central government. For
example for the year commencing 1 April 2010, the value was
set at 48.5p, which meant that for every £1 of Rateable Value,
you will have paid 48.5p in rates. This value is adjusted
every year to allow for the affects of inflation. There are also
schemes that may reduce the rate poundage further and
you will automatically be advised of any such scheme,
should it affect your rate liability.
What is the Rateable Value of my property?
This is a value based upon the annual rent that could be
obtained from your property on a certain date. For the current
Rating List that was effective from 1 April 2010, the rental
evidence used was the value as at 1 April 2008. These values are
revised every five years.
Who determines the Rateable Value?
The Valuation Officer, Folkestone Office, Palting House,
Trinity Road, Folkestone, Kent, CT19 2TP determines what the
value of property is for Rating purposes. He is completely
independent from Maidstone Borough Council and can be contacted on
01303 852901. It is his responsibility to ensure that the
Non-Domestic Rating List is kept accurate and up to date.
The Valuation Office website.
What is the Non-Domestic Rating List?
Every Council has a list that shows that value of all Non
Domestic properties in its area - the Non-Domestic Rating List. It
shows all properties in the area, their rateable values, and their
descriptions. The properties are listed in alphabetical street
order within postal areas and every property has its own reference
number. If any amendments to an assessment are made, a suitable
notation is made of what the amendment was and where details can be
found
Can I see this Non-Domestic Rating List, and if so,
where?
The Rating List is a public document and can be seen at
the Valuation Officer's website. A
hard copy is also held at the Council's main offices at Maidstone
House, King Street, Maidstone, Kent, ME15 6JQ and will be included
on the Council's website at a later date.
What if I do not agree that the Rateable Value of my
property is correct?
Any person who does not agree with the Rateable Value shown in
the Rating List may appeal against the value. ALL appeals must be
made to The Valuation Officer, details above, and NOT to the
Maidstone Borough Council. An appeal must be IN WRITING and state
the reasons why the value is incorrect. However, Rateable Values
can go up as well as down and you will need to take this into
account when deciding whether or not to appeal against the value.
See How To
Make An Appeal.
I have appealed against the Rateable Value of my
property. Do I still have to pay?
Yes. Rates are payable on the basis of the rateable value
currently appearing in the list and you remain liable to pay the
account sent to you until such time as the rateable value in the
list is amended. If the value is reduced, any overpayment will be
refunded, together with any interest that might be due in certain
instances.
Why is my next door neighbour's Business Rates less than
mine?
Every property has a rateable value that reflects the individual
property's annual rent. Any query should be directed to The
Valuation Officer. See How To Make An Appeal.
My rent is inclusive of Business Rates, so why do I get
the bill?
Liability to pay Business Rates rests with the person entitled
to beneficial occupation (for example the occupier) of a property,
irrespective of any third party agreement. You should discuss this
with your landlord, as agreements between Landlords and their
Tenants are a matter between themselves and are not binding on a
Local (or Billing) Authority in the event of any dispute between
those parties. Should a tenant pay a rent that includes Rates, but
the landlord does not pass those payments on to the Council, the
Tenant will still be liable to pay and may then have to take action
to recover the monies paid to the landlord against the
landlord.
My bill shows Transitional Relief. What is
this?
Because the market for rented property can change greatly
between valuations, this could mean large increases for some
properties or large decrease for others, which could push
individual rate bills very sharply up or down. The government
therefore decided to phase in the changes gradually to give
businesses time to adjust. The rules ensure that individual rate
bills cannot go up or down in any year because of the revaluations
by more than fixed percentage amounts, after allowing for
inflation. If your rate bill after a revaluation increases by more
than these fixed percentages, you will qualify for Transitional
Relief , which is a reduction in the amount calculated, to limit
the increase in your bill. Details of the calculation will always
be shown on your bill.
My bill shows Transitional Premium. What is
this?
Because the market for rented property can change greatly
between valuations, this could mean large increases for some
properties or large decrease for others, which could push
individual rate bills very sharply up or down. The government
therefore decided to phase in the changes gradually to give
businesses time to adjust. The rules ensure that individual rate
bills cannot go up or down in any year because of the revaluations
by more than fixed percentage amounts, after allowing for
inflation. If your rate bill after a revaluation decreases by more
than these fixed percentages, you will qualify for Transitional
Premium, which is an increase in the amount calculated, to limit
the reduction in your bill. Details of the calculation will always
be shown on your bill.
My property is empty/ will soon be empty. Do / will I
have to pay anything?
A rate free period of 3 months is allowed (6 months for
industrial type properties) from the day that a non domestic
property becomes empty.
Empty usually means completely cleared of all furniture and
effects.
After that period has ended, the full charge will again become
due and payable.
Specific types of properties, for example properties with a
rateable value of less than 2600 are exempt from paying rates where
a property is "Empty". Specific advice concerning your property can
be obtained from the Rating Section at Maidstone Borough Council,
as noted on your bill.
I only occupy part of my property. Do I still have to
pay rates on it all?
Technically yes, because occupation of part of a property
constitutes occupation of the whole, but there are options:
- If the part of the property that is occupied can be occupied
separately from the remainder of the building, e.g. it has or it is
capable of having its own access points, then the Valuation Officer
might be able to split the existing rating assessment to allow for
the occupied and unoccupied parts. If it cannot, then the splitting
of the assessment cannot be made and this option is not
available.
- If it appears to the Billing Authority (for
example Maidstone Borough Council) that the part of the
property that is empty will remain so for a short time only, then
the Authority may request a certificate under Section 44A of the
Local Government Finance Act 1988. This is completely at the
Authority's discretion and if it requests a certificate from the
Valuation Officer as to the rateable value of the occupied part,
then that rateable value would then be used as the basis for the
charge. There is no definition of what constitutes a short time and
all the factors concerning the type of business and property would
be considered.
Furthermore, if a certificate is requested, then in view of the
'short term' requirement, it would only run for a limited
period, for example to the end of the year in which the
request was made.
What happens if I am no longer responsible for the
property?
If your liability for the property changes, you should notify
the Rating Section (see your bill for details). Please advise us
of:
- the date you vacated the premises
- the date the premises were sold or the lease expired
- your forwarding address for correspondence, and
- details of the new owner or leaseholder.
What happens if I don't pay my account?
If you have problems paying your Business Rates, please let us
know immediately. We will look into you case and where possible,
offer you another payment arrangement. Remember that paying by
direct debit ensures that your payments are made on time each
month.
The recovery timetable where a person either does not pay or
fails to agree a revised payment schedule with us is as follows. As
soon as you miss payment we will send you a reminder. If you don't
bring your instalments up to date within seven days of receiving
the reminder you will lose the right to pay by instalments. If you
pay the amount requested on the reminder as requested, no further
action is taken. A maximum of two reminders will be sent. If each
is paid and you fall behind a third time, you will be sent a notice
that will cancel your right to pay by instalments and be requested
to settle the full amount then outstanding.
Whether you fail to pay a reminder or receive the third notice
and do not pay the full amount, the next action will be for a
Summons for non payment to be issued. If you receive a Magistrates
Court Summons because you have not paid your Business Rates, the
cost of issuing the summons will be added to your account. If you
still do not pay, we may ask a bailiff to collect the debt on our
behalf and you will have to pay further costs if this happens. The
bailiff may take some of your company's or your personal
possessions to sell at public auction to pay off the debt.
Are there any other ways I can obtain a reduction in my
bill?
Apart from a reduction in your rateable value, there are other
forms of relief available. These include:
Charitable Rate Relief:
If your organisation is a Charity, you may apply for Charitable
Rate Relief for anything up to 100% of the liability. A written
application must be made to the Council. The scheme comprises two
elements.
- Mandatory Relief of 80% if the organisation is a charity
(registration with the charities commission is proof) and the
property is being used for charitable purposes; or
- Discretionary Relief to either top up any Mandatory Relief
awarded by up to an additional 20% or by any amount equal to
between one and 100% in any other qualifying case.
Rate Relief on the grounds of Hardship:
If your organisation is suffering from hardship, you may apply for
this relief. However, there are very strict criteria that must be
complied with and as well as proving hardship, you must also show
why it is in the interests of the Council Taxpayer to allow
relief.
Rural Rate Relief for Post Offices, General Stores,
Public Houses, Petrol Filling Stations and former Agricultural
Premises:
To be eligible, the heriditament must be within the boundaries
of a qualifying settlement (there is a list of such settlements)
and;
- have a rateable value of £12,500 or less for a Public House or
Petrol Filling Station, or £8,500 or less for the other
premises;
- be used, in whole or in part, as a general store which sells
general household goods and food (confectionery and pet food do not
count), or post office or both; and, most importantly
- be the only general store or post office in the settlement;
alternatively
- it must be a public house - premises where a justices
on-license is in force; or
- it must be a premises where petrol or other automotive fuels
are sold retail to the general public; and
- the whole of the premises must be used as a pub or petrol
station and in either case, no other hereditament or part of a
hereditament in the settlement concerned is so used; and
- in the case of former agricultural premises, it must be
premises that was formerly exempt under the agricultural exemption
rules for at least 183 days prior to 17 July 2001, but which are
now used for other purposes.
It is possible that a general store and a post office in the
same settlement may both qualify for mandatory rate relief,
provided that they both meet the criteria.
The Mandatory Scheme gives 50% relief to sole Post Offices and
General Stores or former Agricultural premises in a qualifying
settlement, subject to the above criteria.
The council has discretion to top-up the 50% relief with further
help up to 100% and will consider each claim for the further
discretionary relief on its merits. It is expected that only in
exceptional circumstances will discretionary relief be awarded in
excess of 80% of the rates payable.
Rural Rate Relief - Further Details and Other
Information:
This relief applies to any other rural business heriditament
provided that:
- it is within the boundaries of a qualifying settlement i.e.
where the population appears to be less than 3,000 as at
December 31 immediately before the financial year in
question;
- it has a rateable value of £16,500 or less;
- it is used for purposes which are of benefit to the local
community, and
- it is reasonable for the Council to make such a decision,
having regards to the interests of the Council Taxpayers
The Council has discretion to award up to 100% relief and each
case will be considered on its merits. It is expected that relief
will be the exception rather than the rule, as the large majority
of businesses will not be eligible.
In the Maidstone area, Barming, Bearsted, Coxheath, Downswood,
Loose, Staplehurst, and Tovil have not been included in the areas
defined by the Secretary of State for qualification purposes and
they are ineligible for rural rate relief.
Small Business Rate Relief:
This relief is scheduled to last three years and started on
April 1, 2005. It applies to all small business and operates as
follows:
- The rateable value of the property is £17,999 or less
and
- the ratepayer only occupies one property or if he occupies more
than one property, then the value of each additional property must
be £2,599 or less AND the TOTAL value of those additional
properties must be less than £18,000;
The amount awarded is dependant upon the rateable value of the
property. If you qualify for relief:
- You will pay on a lower rate poundage (0.7p less than the
full rate poundage) AND relief of 50% of the reduced amount will
then be allowed IF your rateable value is under £6,000;
- The amount you will pay if your value is between £6,001
and £12,000 will still be calculated on the reduced rate
poundage, BUT the percentage relief will be on a reducing scale,
dependant upon your rateable value;
- The amount you will pay if your value is between £12,001 and
£17,999 will just be calculated on the reduced rate poundage,
there is no additional relief.