Business rates are a form of tax charged to occupiers of most types of non-domestic property, like shops, offices, pubs, warehouses, factories, holiday rental homes and guest houses etc. The amount charged to occupiers of non-domestic premises is calculated by multiplying the Rateable Value (RV) of the property (determined by the Valuation Office Agency) by the multiplier (set by the Department for Communities and Local Government)
But what is the Business Rate Retention System?
The business rate retention system was introduced in April 2013. Councils keep up to half of the business rates money raised from businesses in their local area, with the remainder retained centrally by the government and used to provide grant funding for local authorities.
The government plans to increase the share of business rates English councils retain from 50% to 75% in 2020. This is a major change to local government funding.
The move to 100% business rates retention is suppose to happen in 2020 for all Local Authorities, from 1st April 2017 the process has already started. Also further pilots commencing on 1st April 2018 have been announced.
The Queen’s Speech in 2017 excluded the Local Government Finance Bill. Now that will enable statutory changes to go before Parliament. Recent announcements have signalled a change to 75% for those who did not approve at 100%.
Some of the experts think, that 100% business rates retention may lead to divergences in English councils’ funding without promoting growth. Will that happen? Well… let’s wait and see…
To find out more, visit our website: https://www.businessratehelp.co.uk/