Reduced burdens streamline access to small business rate relief

A government commitment to reduce the burden of form filling associated with applying for small business rate relief has been made good.  In an Order laid before Parliament, Local Government Minister Phil Woolas confirmed that businesses whose circumstances do not change will only need to apply once, for a period of up to five years, for small business rate relief.  Previously, small businesses were required to apply every year.

The announcement follows consultation on streamlining the arrangements for applying for small business rate relief.

Local Government Minister Phil Woolas said:

“I am pleased that we have been able to deliver our commitment to remove the administrative burden of applying every year for small business rate relief.   The Order we have laid in parliament will allow small business, whose circumstances have not changed, to apply only once for small business rate relief for a period of up to five years”. 

"Our proposals received widespread support from our stakeholders who recognised the benefits not only to businesses applying for the relief but also to local authorities who have to process the applications”. 

“The introduction of the small business rate relief scheme in April 2005 helped to alleviate the burden of business rates on small businesses and I hope today’s announcement will demonstrate our recognition of the important role small businesses play in contributing to a healthy economy”.

Small Business Minister Margaret Hodge MP said:
 
“This is great news for the 400,000 small businesses using this scheme. This is a good example of Government listening to business, cutting red tape and providing the best possible conditions for business success in today’s global economy.”

1. The scheme gives 50% rate relief for properties with rateable values up to £5,000.  For properties with higher rateable values, the percentage of relief gradually tapers off, with no relief for properties above £10,000 rateable value.  The relief is funded by a supplement on the rate bills of ratepayers not eligible for the relief, except those with eligible hereditaments between £10,000 and £15,000 (£21,500 in London).
2. Under the revised scheme, ratepayers eligible for the relief will be required to apply for small business rate relief for the financial year 2007/08 and will not be required to apply again until the next revaluation (financial year 2010/11) provided their circumstances have not changed in that period.  Where circumstances have changed, the ratepayer will be required, as a condition of entitlement, to notify the relevant local billing authority of the change.  All other eligibility criteria still apply.
3. The circumstances in which recipients of the relief are required to notify the local billing authority of a change are:
   • Where the rateable value of any property they occupy in another billing authority area increases. The notification should be in writing.
   • Where a recipient of the relief occupies a new property. Notification should be made by way of a new application to the relevant billing authority.
4. The scheme applies in England only.  On the basis of returns completed by local authorities before the start of the last financial year, an estimated £390 million was expected to be claimed in small business rate relief for 2005-06.
5. On 5 December 2005, as part of the Government’s drive to reduce burdens on business, the Chancellor announced in his pre-Budget report proposals to relax the requirements for applying for small business rate relief.  He said: ”Already the Government has started to reduce the burden of form filling ahead of new principles to be published next year on shortening forms and greater data sharing between regulations, for instance by abolishing a requirement for 400,000 small businesses to reapply for small business rate relief every year”.
6. The Department for Communities and Local Government has today laid the Non-Domestic Rating (Small Business Rate Relief) (Amendment) (England) Order 2006 before Parliament.  The statutory instrument, explanatory memorandum and final RIA can be found at:

• www.opsi.gov.uk/si/si2006/uksi_20062313_en.pdf
  
  
• www.opsi.gov.uk/si/em2006/uksiem_20062313_en.pdf