Local authority business rates receipts up £300m
Local authorities have reported that business rate income for 2017-18 amounted to £23.8bn – up £300m on 2016-17 receipts.
This amount is what authorities collected after all reliefs, accounting adjustments and sums retained outside the rates’ retention scheme are taken into consideration – so some good news for LAs.
They also reported that a total of £4.2bn of business rates relief was awarded in the same time period and £1.1 billion of that was the cost of Small Business Rate Relief; a further £2.8 billion was due to other mandatory relief, and £300m awarded as discretionary relief.
The total relief provided to charitable occupations – both mandatory and discretionary – came to £1.9 billion for the same financial year.
There were some exceptional factors affecting this rating period, with the two biggest being the Revaluation and transitional relief changes.
The latest revaluation came into effect on the 1 April 2017 and reflected the rental market as at 1 April 2015. This was more marked than usual due to the postponement of this particular revaluation, by the then Chancellor George Osborne, as it should have taken place in 2015.
Due to the delay, some businesses were facing huge changes to their liability and so the Government put in place a transitional scheme to protect small and medium business ratepayers from significant step-changes in bills, allowing a phasing-in of increases over a number of years.
Other factors that will have had some effect on the 2017-18 receipts included the Government announcing in 2016 a permanent doubling of small business rates relief. There have also been changes to the thresholds, so that 100% relief is given to all businesses that have a rateable value below £12,000 and tapering of the relief for businesses with an RV between £12,000 and £15,000 (this was previously a temporary doubling that required an extension each year). The threshold at which a higher multiplier is applied has been increased from £18,000 (or £25,500 in Greater London) to £51,000.
Another interesting fact to end with is the amount of relief granted to empty premises in 2017-18 – a considerable £916million was handed back over the 12 months.
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