Changes to business rates in 2017

The Government is planning to change business rates from 1 April next year. For many businesses in Hackney, their business rates bill will increase.

It follows a national revaluation of the 'rateable value' of business premises - an estimate of what the property could be let for on the open market.

In Hackney, the new rateable value of many premises is much higher than before. As rateable value is a key part of what business rates are based on, this means that many Hackney businesses will face a large rise in their rates.

Though the Council is responsible for collecting business rates, we have nothing to do with this revaluation and the associated increase in bills. This is entirely a central Government decision. We believe the Government's current proposals are too severe and have called on them to rethink their approach.

Cllr Guy Nicholson, Cabinet Member for Planning, Business and Investment, has written to the Chancellor Philip Hammond requesting he delay rolling out the new system of charges or, failing that, lower the annual increases to give local businesses more time to plan ahead. 

Below are some FAQs and links to explain business rates in general and the Government's proposals. They will be updated when more information is available.

As details become clearer the Council will be looking at ways to offer further information and guidance to local businesses to help them manage increases in their rates. If you would like to be kept up to date with this please register with the Council's One Account.

For further advice you can email or call 020 8356 3466.


When will I get my new bill, and how much will it be?

Bills for the year starting 1 April 2017 will be sent out by the Council in mid-March.

Unfortunately we may not know until March what your bill will be because we are unlikely to have the necessary information from Government before then. It is the Government which sets your business rates, not the Council.

However, you can get a very basic estimate of your next business rates bill from the Valuation Office Agency. Click 'Start now', type in your postcode, chose your address, then click 'Get an estimate of your business rates bill for 2017'.

It is important to note that this is just an estimate. It ignores things such as mandatory and charitable relief, rates on unoccupied properties, the business rates supplement paid to the GLA, and is based on assumptions about small business rates relief that are not yet confirmed. Your actual bill could be very different.

The Government has set a cap on what the maximum increase can be next year. Depending on whether your business size is classified as 'small', 'medium' or 'large', the maximum you could pay next year will be capped at 5% for 'small', 12.5% for 'medium', or 43% for 'large'. Your rates will then continue rising each year until they match the new value of your premises.

How are my business rates calculated?

Your rate bill is calculated by multiplying the 'rateable value' of your property by the 'rate poundage'. This sum may be reduced if you are entitled to a relief.

Who sets the rateable value, and what is it?

The rateable value is set by the Valuation Office Agency, an executive agency of HMRC. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation coming into effect on 1 April 2017 this date was set as 1 April 2015. To find out your new valuation, visit the Valuation Office Agency.

What do I do if I don't agree with the rateable value of my premises?

If you think your 2017 valuation is wrong you need to tell the Valuation Office Agency as soon as possible. This is so they have more chance of investigating your valuation before 1 April 2017. If they agree with you, they may correct it.

If you do not agree with its final decision you can appeal against it from 1 April 2017. You will have to pay your new rates until the appeal is concluded. 

Who sets the rate poundage, and what is it?

The Government sets the rate poundage, often called the multiplier, for each financial year. There are two multipliers -the 'standard non-domestic' and the 'small business non-domestic'. The 'standard' is higher to help pay for small business rate relief.

Can I delay payment if I think the rateable value is wrong?

No. You must pay based on the 2017 value until the VOA changes it. If it is changed and backdated your bill will also be changed and backdated.

When will I know my total increase, and how many years of rises will that be?

We don't know this yet, and are waiting on more information from the Government. However, the Government has said that 'small' business won't face more than a 64% increase over the next five years.

What determines business size for the purposes of these changes in rates?

Generally this is based on its rateable value. In London, £27,999 or under is 'small', £28,000 to £99,999 is 'medium', and £100,000 or over is 'large'.

Can I get a reduction in my rates?

There will be a small business rates relief scheme. Ratepayers who meet the qualification criteria can apply for a reduction. The Government has not yet told us what the qualifying criteria will be, but it will use lower rateable values than those above, and there will be some tapering depending on rateable value. Once we get the confirmed criteria from Government, we will contact businesses who may qualify.

What other reliefs are available?

Reliefs are available for empty properties, properties occupied by charities and by non-profit making organisations. 

What can I do if I can't pay?

All ratepayers are entitled to request 12 instalments in a full year rather than the statutory 10 instalments. Please contact us to request this.

If you get into payment difficulties and can't afford to pay your instalments, you can contact us and we will try to help where we can.

Where do my business rates go, and what are they used for?

Rates on business properties are used to help fund public services, in a similar way to council tax on residential properties. Currently, 50% of the rates the Council collects goes to central Government, 30% to the Council and 20% to the GLA.

The Council uses its business rates income to help fund local services including refuse collection, street cleaning, roads maintenance, trading standards, environmental health, licensing, economic regeneration, children's and adult social care, parks, libraries, leisure and recreation.

Page updated: 28/11/2016 13:55:03