Business Rates explanatory notes

Business Rates  

Dear resident,

The good news is that we are continuing to invest in vital frontline services for the forthcoming financial year ahead and beyond.

Redbridge Council has been recognised as a high performing, low spend council that has arguably been punching above its weight for some time, especially considering the level of savings it has been forced to make by government cuts and austerity over the past decade. Redbridge has seen an average 63% reduction in funding over the past decade.

This means Redbridge Council has had to save more than £180m in just under ten years – a staggering amount of money that could have been spent on vital frontline services for residents.

Despite a decade of austerity, the council has taken a pragmatic and financially prudent approach, always trying to ensure that we have protected residents, and the most vulnerable members of our community from feeling the impact of these cuts.

This hasn’t always been possible and has presented many challenges along the way. To put it simply; we have had to find ways of being more efficient and of doing things differently.

Our approach has always abided by one simple principle: to protect frontline services. Residents still wake up in the morning to see their bins picked up every week; all libraries and parks in the borough remain open and we are supporting the police to keep people safe and tackle anti-social behaviour.

Like 97% of councils across the country, we are having to raise council tax to try and mitigate the government’s reductions in funding, there will be a total Council Tax increase of 3.99%, 1.99% for general use and a 2% Adult Social Care Precept.

For a band D property, the additional 1.99% will mean an extra £26 per year on top of last year’s Council Tax bill. Although it is regrettable, this is essential to plug the ever-growing gap between decreasing government funding and the cost of frontline services.

The 2% Adult Social Care precept is ringfenced to support adult social care will also appear on residents’ council tax bills. Once again, this means a resident living in a Band D property will see an additional charge of £26 on their bill.

It is important to stress this is not something we are doing for the sheer sake of it. This is the government’s solution for providing care to the most vulnerable adults in the borough.

Like all councils, Redbridge faces a national social care crisis. Our elderly population is growing and they and their families rightly expect good support from public services.

This is money we must find to cope with the enormous pressures we’re facing in looking after vulnerable residents. They deserve nothing less.

Key projects in Redbridge

Over the coming year, we will be working with local people to shape and co-design six state-of-the-art Community Hubs across the borough. Community Hubs will become the centre of civic and community life in their respective  neighbourhoods, with locally-focused council services being delivered side by side, with a variety of other possible services, such as, a library, leisure centre, GP surgery, police or children’s centre.

We will continue to build new council housing and affordable properties to address the historically low levels of social housing in the borough.

Through wise and innovative investment we will renovate Ashton Playing Fields in Woodford Bridge. Redbridge Council will also continue the transformation of Hainault Forest County Park, in partnership which the Heritage Lottery Fund, and deliver the new swimming pool in Wanstead.

Key investments in Redbridge

£18m: Protecting the vulnerable, investing in housing and keeping our streets clean and our residents safe

We will ensure that we continue protecting our most vulnerable residents and continue to invest in housing, whilst also keeping our streets clean and local people safe. This includes vital expenditure in the following areas:

The £18m investment in services is as follows:

£1.0m – Keeping the borough clean and safe, including enforcement

£5.0m – Housing

£7.5m – Adult Social Care

£2.8m – Children, Families & Education

£1.7m – Investment in other services, including CCTV and Emergency planning

£17.4m: Investing in our roads and highways

The Council is planning to invest £17.4m into roads across the Borough over the next three financial years. £13.5m of funding for road resurfacing for the highest priority roads, with the remaining £3.9m to be invested in improving the condition of existing highways.

£14.9m: Ilford Gyratory project

This project will transform access to Ilford Town Centre by reducing traffic and making it a destination of choice. New segregated cycle lanes will enable people to cycle around the area safely. New bridges will be built over the River Roding, enabling more people to walk and cycle to neighbourhoods, north of Ilford Town Centre.

£5.5m: Temporary Accommodation

This will include the purchase of temporary accommodation to help tackle the housing crisis and put a roof over people’s heads.

How are we going to do things differently?

One of the ways the council will seek to make savings and generate much-needed additional income is to buy and build new homes. Building our own temporary accommodation and council houses will save the council money in the long run by cutting out private landlords, while also ensuring our residents get the best possible accommodation.

We are going to find new and innovative ways, including digital technology, to support older people to lead healthy, happy and independent lives, whilst also investing in key services that will help reduce the number of children and young people that come into our care.

I want to encourage businesses into our Borough and our High Streets. We will be exploring options for incentivising new businesses through business rate reliefs to encourage positive behaviours in relation to the climate, health and wellbeing, allowing local businesses time to establish, grow and eventually flourish. Encouraging businesses who fill a gap in the high street will help ensure residents can buy local.

We also need to do things smarter and become more efficient. We can do this by improving digital services; exploring commercial opportunities to generate income that can be reinvested into services; investing in new technology to improve productivity and reducing costs, as well as reviewing key frontline services to make them more efficient.

Best wishes

Councillor Jas Athwal

Leader, London Borough of Redbridge

Non-Domestic Rates

Non-Domestic Rates, or business rates, collected by The London Borough of Redbridge are the way that those who occupy non-domestic property contribute towards the cost of local services. Under the business rates retention arrangements introduced from 1st April 2013, authorities keep a proportion of the business rates paid locally. The money, together with revenue from council taxpayers, locally generated income and grants from central government, is used to pay for the services provided by The London Borough of Redbridge in your area. Further information about the business rates system, may be obtained at: https://www.gov.uk/introduction-to-business-rates and at the website of The London Borough of Redbridge which is normally shown on your rate bill.

Business Rates Instalments

Payment of business rate bills is automatically set on a 10-monthly cycle. However, the Government has put in place regulations that allow ratepayers to require their local authority to enable payments to be made through 12 monthly instalments. If you wish to take up this offer, you should contact The London Borough of Redbridge as soon as possible.

 

National Non-Domestic Rating Multiplier

The London Borough of Redbridge works out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier. There are two multipliers: the national non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year, except in the City of London where special arrangements apply.

Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to certain other mandatory relief[s] or are liable for unoccupied property rates) will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.

The multiplier for a financial year is based on the previous year’s multiplier adjusted to reflect the Consumer Price Index (CPI) inflation figure for the September prior to the billing year. The current multipliers are shown on the front of your bill.

 

Rateable Value

Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs. They compile and maintain a full list of all rateable values, available at www.gov.uk/voa The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date specified in legislation. For the current rating list, this date was set as 1st April 2015.

The Valuation Office Agency may alter the valuation if circumstances change. The ratepayer (and certain others who have an interest in the property) can also check and challenge the valuation shown in the list if they believe it is wrong.

Further information about the grounds on which challenges may be made and the process for doing so can be found on the VOA website: www.gov.uk/guidance/how-to-check-your-rateable-value-is-correct.

 

Revaluations

All non-domestic property rateable values are reassessed at revaluations. The most recent revaluation took effect from 1st April 2017. Revaluations ensure that business rates bills are up-to-date, more accurately reflect current rental values and relative changes in rents. Frequent revaluations ensure the system continues to be responsive to changing economic conditions.

 

Business Rate Reliefs

Depending on individual circumstances, a ratepayer may be eligible for a rate relief (i.e. a reduction in your business rates bill). There are a range of available reliefs. Some of the permanent reliefs are set out below but temporary reliefs are often introduced by the Government at Budgets. You should contact your local authority for details on the latest availability of business rates reliefs and advice on whether you may qualify. Further detail on reliefs is also provided at www.gov.uk/introduction-to-business-rates or at the website of The London Borough of Redbridge which is normally shown on your rate bill.

Small Business Rates Relief

If a ratepayer’s sole or main property has a rateable value which does not exceed an amount set out in regulations, the ratepayer may receive a percentage reduction in their rates bill for this property of up to a maximum of 100%. The level of reduction will depend on the rateable value of the property – for example eligible properties below a specified lower threshold will receive 100% relief, and you may receive partial tapered relief up to a specified upper threshold. The relevant thresholds for relief are set out in regulations and can be obtained from The London Borough of Redbridge or at www.gov.uk/introduction-to-business-rates.

Generally, this percentage reduction (relief) is only available to ratepayers who occupy either—

(a) one property, or

(b) one main property and other additional properties providing those additional properties each have a rateable value which does not exceed the limit set in regulations.

The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set in regulations. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a fixed additional period. Full details on the relevant limits in relation to second properties and the current period for which a ratepayer may continue to receive relief after taking on an additional property can be obtained from The London Borough of Redbridge or at www.gov.uk/introduction-to-business-rates.

Certain changes in circumstances will need to be notified to The London Borough of Redbridge by the ratepayer who is in receipt of relief (other changes will be picked up by The London Borough of Redbridge). The changes which should be notified are—

(a) the property falls vacant,

(b) the ratepayer taking up occupation of an additional property, and

(c) an increase in the rateable value of a property occupied by the ratepayer in an area other than the area of The London Borough of Redbridge which granted the relief.

Charity and Community Amateur Sports Club Relief

Charities and registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the charity or the club and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the club (or of that and other clubs).

The London Borough of Redbridge has discretion to give further relief on the remaining bill. Full details can be obtained from The London Borough of Redbridge Business Rates Team 020 8708 4357.

Unoccupied Property Rate Relief

Business rates are generally payable in respect of unoccupied non-domestic property. However, they are generally not payable for the first three months that a property is empty. This is extended to six months in the case of certain other properties (for example industrial premises). Full details on exemptions can be obtained The London Borough of Redbridge or from gov.uk at https://www.gov.uk/apply-for-business-rate-relief.

Transitional Rate Relief

At a revaluation, some ratepayers will see reductions or no change in their bill whereas some ratepayers will see increases.

Transitional relief schemes are introduced at each revaluation to help those facing increases. This relief has been funded by limiting the reduction in bills for those who have benefited from the revaluation. Transitional relief is applied automatically to bills. Further information about transitional arrangements and other reliefs may be obtained from The London Borough of Redbridge or the website www.gov.uk/introduction-to-business-rates.

Local Discounts

The London Borough of Redbridge have a general power to grant discretionary local discounts and to give hardship relief in specific circumstances. Full details can be obtained from the local authority.

State Aid

The award of discretionary reliefs is considered likely to amount to State aid. However, it will be state aid compliant where it is provided in accordance with the De Minimis Regulations EC 1407/2013. The De Minimis Regulations allow an undertaking to receive up to EUR 200,000 'de minimis' aid over a rolling three-year period. If you are receiving, or have received, any 'de minimis' aid granted during the current or two previous financial years (from any source), you should inform The London Borough of Redbridge immediately with details of the aid received.

Rating Advisers

Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. However, ratepayers who do wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors (RICS - website www.rics.org) and the Institute of Revenues, Rating and Valuation (IRRV - website www.irrv.org.uk) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct. Before you employ a rating adviser or company you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.

Information Supplied with Demand Notices

Information relating to the relevant and previous financial years in regard to the gross expenditure of The London Borough of Redbridge is available at https://www.redbridge.gov.uk/council-tax/council-tax-booklet/ A hard copy is available on request by writing to the council or at 020 8708 4357.

Business Rate Supplements – Statutory Explanatory Note

The Business Rate Supplements Act 2009 enables levying authorities - county councils, unitary district councils and, in London, the Greater London Authority - to levy a supplement on the business rate to support additional projects aimed at economic development of the area. This power has also been extended to the mayors of Cambridgeshire and Peterborough, Liverpool City Region, West of England, and West Midlands combined authorities. Business Rate Supplements (BRS) are not applicable to properties with a rateable value of £50,000 or below, and authorities have discretion to increase that threshold. The total maximum BRS which may be levied by a levying authority is 2p per pound of rateable value. Levying authorities have the power to apply such reliefs to the BRS as they think appropriate and in such cases must include an explanation of the rules for the application of those reliefs in the final prospectus for the BRS.

The business rate supplement applicable in London is being levied by the Greater London Authority in relation to the Crossrail project. The rateable value threshold in 2020/21 for the Crossrail BRS is £70,000. Further information may be found in the Crossrail BRS final prospectus which is available at www.london.gov.uk/crossrail-brs”.

What is Crossrail and how will it benefit your business?

Crossrail is London’s newest railway. It will connect the outer suburbs and Heathrow airport to the West End, City and Canary Wharf. As such, Crossrail is vital to the future of London’s economy. The increased earnings it will bring – from new jobs and quicker journeys – will benefit businesses across London. When it opens, it will be named the Elizabeth line in honour of Queen Elizabeth II.

Crossrail is the single largest investment in London’s infrastructure for decades. It employed up to 14,000 people at the peak of construction. Work is now continuing to complete the project and stations along the route as soon as possible with the section through central London expected to open in 2021.

To find out more, visit www.crossrail.co.uk, call the Crossrail 24 hr Helpdesk on 0345 602 3813 or email helpdesk@crossrail.co.uk.

Developments in the funding of Crossrail

The previous Mayor of London agreed a funding settlement with Government in 2010 for the Crossrail route. The Mayor and the Secretary of State for Transport announced a revised funding package for Crossrail on 10 December 2018.

How are London’s businesses helping fund Crossrail?

In April 2012, the previous Mayor introduced a Community Infrastructure Levy (MCIL) on new developments in London to finance Crossrail. This is paid for by the developer. Business ratepayers of larger properties have contributed through a special Crossrail Business Rate Supplement (BRS) since April 2010.

Under the December 2018 funding package, the GLA’s total contribution towards Crossrail financed through the MCIL and BRS is expected to be around £6.1 billion. The BRS will need to be levied until the GLA’s Crossrail related borrowing is repaid. This is expected to be some time in the mid to late 2030s, in line with the published prospectus. The policies for the BRS in 2020/21 remain unchanged from last year.

Does my business have to pay the Crossrail BRS?

Your rates bill makes clear if you are liable to pay the BRS. The Crossrail BRS is applied only to assessments (for example business and other non-domestic premises) with a rateable value of over £70,000 on the local rating lists of the 32 London boroughs and City of London Corporation. This threshold means that around 85% of non- domestic properties in London will be exempt from the BRS in 2020/21.

How much do I pay if my property’s rateable value is above £70,000?

The Crossrail BRS multiplier for 2020/21 remains at 2p per pound of rateable value. Reliefs for the Crossrail BRS will apply on the same basis and at the same percentage rate as for your national non-domestic rates (NNDR) bill. However, no transitional relief is provided for the BRS.

Keeping you up to date

We will give ratepayers an annual update over the lifetime of the BRS.

Contact for more information

020 7983 4100 ◊ crossrail-brs@london.gov.uk; www.london.gov.uk/crossrail-brs

Finance, GLA, City Hall London SE1 2AA

 

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