National Non Domestic Rates (NNDR) Explanatory Notes

2020/21

Non-Domestic Rates

Non-Domestic Rates, or business rates, collected by local authorities 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 tax payers, locally generated income and grants from central government, is used to pay for the services provided by local authorities in your area. Further information about
the business rates system from Gov.uk.

Business Rates Instalments

Payment of business rates 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 your local authority as soon as possible.

National Non-Domestic Rating Multiplier

The local authority 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 standard non-domestic rating multiplier and the small business nondomestic 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 neither entitled to certain other mandatory relief[s] nor liable for unoccupied
property rates) will have their bills calculated using the lower small business non-domestic
rating multiplier, rather than the standard non-domestic rating multiplier.

Both multipliers for this financial year are 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. 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 VOA 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 obtained by contacting the VOA, or by consulting the VOA website.

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 and 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 their business rates bill). There are a range of available reliefs. Further details
are provided below.

Temporary Reliefs

Some of the permanent reliefs are set out below but temporary reliefs are often introduced
by the Government at Budgets. Further detail on current temporary reliefs.

You should contact your local authority for details on the latest availability of business rates reliefs and advice on whether you may qualify.

Small Business Rates Relief

If a ratepayer’s sole or main property has a rateable value which does not exceed a set
threshold, the ratepayer may receive a percentage reduction in their rates bill for the
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 with a rateable value below a
specified lower threshold will receive 100% relief. Eligible properties between that
threshold and a specified upper threshold will receive partial tapered relief.

The relevant thresholds for relief are set by the Government by order and can be obtained from your local authority or at www.gov.uk/introduction-to-business-rates.

Generally, these percentage reductions (reliefs) are 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 by order.


The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set by order. 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.

Certain changes in circumstances will need to be notified to the local authority by the
ratepayer who is in receipt of relief (other changes will be picked up by the local authority).
The changes which should be notified are:

(a) the property falling vacant,
(b) the ratepayer taking up occupation of an additional property, or
(c) an increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the local authority 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 local authority has discretion to give further relief on the remaining bill. Full details
can be obtained from the local authority.

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. Such relief schemes are funded by limiting the reduction in bills for those who
have benefitted from the revaluation. Transitional relief is applied automatically to bills.
Further information about transitional arrangements and other reliefs may be obtained from
the local authority or the website www.gov.uk/introduction-to-business-rates.

Local Discounts and Hardship Relief

Local authorities 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.

Unoccupied Property Rating

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 industrial premises, whilst certain other properties such as vacant listed buildings are not liable for business rates until they are reoccupied. Full details on exemptions can be obtained from your local authority or from gov.uk.

State Aid

The award of discretionary relief[s] 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
Regulation EC 1407/2013. The De Minimis Regulation allows 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 local authority immediately with details of
the aid received.

Rating Advisers

Ratepayers do not have to be represented in discussions about the rateable value of their
property 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) and the Institute of Revenues, Rating and Valuation (IRRV)  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 local authority.

A hard copy is available on request.