Denham - Government helping businesses with rates

Published 1 April 2010

As new business rates bills take effect from today, Communities Secretary John Denham has reassured businesses that the majority of them - 60 per cent - will see their bills fall.

John Denham also outlined the unprecedented levels of support Government continues to give to small businesses as the economy recovers.

For the minority paying more, the Government has put in place a £2bn relief scheme self funded by businesses that will limit and phase in increases.

In last week's budget, the Government set out new measures to help small businesses pay their rates bills, by increasing the Small Business Rate Relief limit to £12,000 for eligible properties in England. As a result around half a million small business properties (60 per cent) are set to benefit overall.

The is good news for business and Ministers urged local authorities to pass on the necessary information to all their local rate paying small businesses as soon as possible so they are aware of the change.

John Denham said:

"This year's business rates revaluation is making sure each business pays its fair share and no more - it does not raise a single extra penny for Government - and one million business properties will see an average bill decrease of £770.

"We've listened to the concerns of business and have taken real action to help them recover from the downturn. The Government has put in place a £2 billion relief scheme to limit and phase in increases for the minority paying more.

"And in last week's Budget, targeted measures were announced to help half a million more small businesses reduce their bills further so they can make the most of future opportunities as the economy returns to growth.

"This is on top of the wider support available to help ease business pressures including the deferring of tax payments."

Rateable values are only one part of a rates bill. The other is the ratings multiplier which is applied to calculate final bills. To compensate for the higher property market at the time of revaluation the Government reduced the multiplier by 15 per cent taking it to its lowest level for 17 years.

This step has made sure the Government does not collect an extra penny from revaluation and that each business pays its fair contribution by ensuring the share of the national rates bill paid by any one business reflects changes over time in the value of their property relative to others.

For one year from October 2010, 345,000 eligible businesses with rateable values of up to £6,000 will pay no business rates. Following the Budget businesses with rateable values between £6,000 and £12,000 will now benefit from a significant reduction in their rates bill.

For example a property with a Rateable Value of £6,500 due to pay £1,433 would now pay just £827 under the new scheme, a saving of £1,213 between 2010 and 2012.

Notes to Editors

1.Business rates are the way in which businesses and other occupiers of non-domestic property contribute toward the cost of local authority services. They are a fixed cost from the moment a company moves into their premises. In October 2009, The Valuation Office Agency (VOA) - which values all business and non-domestic property in England and Wales for business rates - sent out some 1.8 million valuations, giving ratepayers the chance to check their details to make sure that if changes are necessary, they can be made, and they are billed the correct amount. Since October, almost 110,000 businesses have contacted the VOA directly and almost 350,000 businesses have visited their dedicated website.

2.If a business has a query regarding the rateable value of their property they should contact the VOA directly on 0845 602 2010

3.The current small business rate relief scheme (SBRR) was introduced in 2005 and addresses the burden that business rates place on small businesses compared with larger concerns. In the Budget it was announced that the Government will temporarily increase the level of SBRR so that eligible ratepayers will receive relief at 100 per cent on properties with rateable values up to £6,000 with a tapered relief of between 100 per cent and 0 per cent for properties with rateable values between £6,001 and £12,000. The new levels of relief will be available for 12 months from 1 October 2010 to 30 September 2011.

4.Businesses that already claim SBRR relief do not need to do anything more as their local authorities will calculate revised payment schedules. For those businesses that do not already claim the relief but think they may be entitled, should contact their local authority who can advise on what they need to do. Communities and Local Government has provided local billing authorities with a letter to send to all ratepayers with a rateable value below £12k on 2010 rating lists. The letter will advise ratepayers that they should keep paying their current rates until they receive a new bill from their authority. A copy of the letter can be found at: http://www.communities.gov.uk/localgovernment/localgovernmentfinance/businessrates/busratesinformationletters/ratesletters2010