Business (or Non Domestic) Rates
Frequently Asked Questions
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 1 April 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.
Q. Why do I have to pay Business (or Non-Domestic) Rates?
A. 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 Local Government on the basis of the population of the
area. E.g. of the 42.7m collectable in the Maidstone area for the
year 1.4.2005 - 31.3.2006, 4.086m (some 9.6%) was be returned
to Maidstone Borough Council. The County Council and Police also
receive a share of the tax, based on similar apportionments.
Q. Why do I have to pay for the collection of my trade
refuse?
A. 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.
Q. How are my rates calculated?
A. 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.
Q. What is this Multiplier or Rate Poundage?
A. This is a value set by central government. E.g. for the year
commencing 1 April 2006, the value was set at 43.3p, which meant
that for every 1 of Rateable Value, you will have
paid 43.3p 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.
Q. What is the Rateable Value of my property?
A. 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 2005, the rental
evidence used was the value as at 1 April 2003. These values are
revised every 5 years.
Q. Who determines the Rateable Value?
A. 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 has a web site, www.voa.gov.uk.
Q. What is the Non-Domestic Rating List?
A. 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
Q. Can I see this Non-Domestic Rating List, and if so,
where?
A. The Rating List is a public document and can be seen at the
Valuation Officer's web site at http://www.voa.gov.uk/. A hard copy is
also held at the Council's main offices at 13 Tonbridge Road,
Maidstone and will be included on the Council's website at a later
date.
Q. What if I do not agree that the Rateable Value of my
property is correct?
A. 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.
Q. I have appealed against the Rateable Value of my property.
Do I still have to pay?
A. 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.
Q. Why is my next door neighbour's Business Rates less
than mine?
A. Every property has a rateable value that reflects the
inpidual property's annual rent. Any query should be directed to
The Valuation Officer. See How To Make An Appeal.
Q. My rent is inclusive of Business Rates, so why do I get the
bill?
A. Liability to pay Business Rates rests with the person
entitled to beneficial occupation (i.e. 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.
Q. My bill shows Transitional Relief. What is this?
A. 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 inpidual
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 inpidual 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.
Q. My bill shows Transitional Premium. What is this?
A. 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 inpidual
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 inpidual 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.
Q. My property is empty/ will soon be empty. Do / will I have
to pay anything?
A. Unoccupied non-domestic properties are liable for empty
property rates.
Rates are charged at 50% of the annual bill and liability begins 3
months after a property becomes empty. Empty usually means
completely cleared of all furniture and effects.
Specific types of properties, i.e. industrial, warehouses, and
factories are exempt from empty property rates, as are properties
with a rateable value of less than 1900. Specific advice concerning
your property can be obtained from the Rating Section at Maidstone
Borough Council. See your bill for details. For further
information, please see the elements contained in the Reducing Your Liability section.
Q. I only occupy part of my property. Do I still have to pay
rates on it all?
A. 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 (i.e. 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,
e.g. to the end of the year in which the request was made.
Q. What happens if I am no longer responsible for the
property?
A. 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.
Q. What happens if I don't pay my account?
A. 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 7 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.
Q. Are there any other ways I can obtain a reduction in my
bill?
A. 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 1 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 10,500 or less for a Public House or
Petrol Filling Station, or 7,000 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 31
December immediately before the financial year in question;
- it has a rateable value of £14,000 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 it's 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 1
April 2005. It applies to all small business and operates as
follows:
- The rateable value of the property is £15,000 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 less than £2,200 AND the TOTAL value of those additional
properties must be less than £15,000;
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 £5,000;
- The amount you will pay if your value is between £5,000
and £9,999 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 £10,000 and
£14,999 will just be calculated on the reduced rate poundage,
there is no additioanl relief.