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Non-Domestic Rating Bill, Report Stage, House of Lords, latest Amendments, September 2023

The Non-Domestic Rating Bill implements a number of changes to the system of non-domestic rates (known as business rates) in England and Wales.

Key messages

  • We welcome that the Government is legislating for a package of measures alongside revaluations once every three years. We support measures to improve valuation accuracy and timeliness including new duties for ratepayers to notify the Valuation Office Agency (VOA) of information on the calculation of their rateable value.
  • We welcome the clarification that the new online system for receiving information from ratepayers will enable the VOA to share information with billing authorities and that the VOA will test this functionality and share information with billing authorities as part of the soft launch of the new system.
  • We supported the reforms to material changes of circumstances due to the COVID-19 pandemic and support the changes in the Bill which will mean that material changes of circumstances should relate to physical changes only.
  • We look forward to early discussions on implementation of the new reliefs including how councils will be fully compensated for income foregone, as well as for any new burdens arising from the administration of these reliefs.
  • We welcome the Government’s promise to consult on business rates avoidance and evasion. This could include:
    • a review of exemptions such as where business happen to be located on farms.
    • further clampdowns on business rates avoidance along the lines of those introduced in Wales and Scotland to ensure that the rules on reliefs such as empty property and charitable relief are applied fairly.
  • We continue to support more fundamental changes to business rates. This could include:
    • giving councils more flexibility on business rates reliefs such as charitable and empty property relief.
    • giving councils the ability to set its own business rates multiplier, or at the very least be able to set a multiplier above and below the nationally set multiplier.
    • consideration of alternative forms of income for local government including an e-commerce levy with the funding retained by local government.
    • bringing forward changes in the basis of liability so that more is defined in statute; how this is framed should be the subject of a further consultation involving the LGA and councils. This is because many fundamental concepts such as beneficial occupation have been set by case law leading to results which may seem puzzling to the public, such as the fact that large vacant sites may not pay business rates.

The LGA’s suggested Amendments tabled by Lord Shipley

Amendment relating to billing authorities giving relief on a hereditament

The intention of this Amendment is to remove the prohibition on a billing authority giving relief on a hereditament occupied by a billing authority, a precepting authority or a GLA functional body. These prevent authorities awarding relief to premises such as markets which they own.

LGA view: The LGA supports this amendment. The current rules prevent councils giving discretionary relief to their own hereditaments. This is particularly an issue with local authority markets. During the COVID-19 pandemic, councils were not able to give business rates relief to local authority markets due to this prohibition. Many local authorities report they are having to subsidise their markets to enable them to continue operating.

Amendment relating to anti-avoidance regulations

The intention of this Amendment is to introduce into law the power to make anti-avoidance regulations, as provided for in Part 4 of the Non-Domestic Rates (Scotland) Act 2020. The Amendment mirrors Part 4, with such changes as to make it applicable to UK law.

LGA view: Regulations as provided for by the Scottish legislation are in force through the Non-Domestic Rates (Miscellaneous Anti-Avoidance Measures) (Scotland) Regulations 2023. The policy note says that the Regulations have the purpose of making provision to prevent or minimise advantages arising from artificial avoidance arrangements in relation to non-domestic rates. A consultation on avoidance and evasion was published on 6 July 2023 – it closes on 28 September 2023. In 2019, the LGA carried out a survey of business rates avoidance and in 2020 it published a report detailing the findings. The findings estimated that the overall scale of avoidance in England is £250 million, which equates to one per cent of the overall total business rates payable. This amendment would allow regulations to be laid before Parliament without the need for further primary legislation. It would be expected that the precise scope of any UK regulations would be informed by a future consultation.

Other Amendment statements

Amendments relating to extending energy efficiency improvement relief

Lord Ravensdale’s (Crossbench) Amendments all relate to Clause 1 and would allow qualifying energy efficiency improvements improvement rate relief until at least 1 April 2029.

LGA view: Addressing climate change is a key priority for the LGA and councils, and we support the improved energy efficiency of non-domestic buildings. The Government is funding the improvement relief for 5 years. This clause would extend energy efficiency improvement relief to at least 1 April 2029. If it were to be passed, we would look to the Government to fund the additional expenditure.

Amendments relating to the revaluation of the local and central lists

Lord Shipley’s (Liberal Democrat) Amendments to Clause 5 would make revaluation of the local and central lists once every two years as opposed to once every three years.

LGA view: The LGA does not have a policy on this. We have supported three-year revaluations on the basis of the ratepayer providing more data, but not more frequent revaluations.

Amendments relating to penalties

These are Government Amendments which would limit the total penalties for failure to provide information to the VOA to £1,800 and give more direction to the Valuation Tribunal on whether to impose penalties.

LGA view: The LGA does not have a view on these Amendments.

Amendment relating to the non-domestic rating system

This Amendment after Clause 15 tabled by Baroness Hayman of Ullock (Labour) and Lord Shipley would require a review of the non-domestic rating system with a view to reducing the small business rates relief threshold.

LGA view: The Government carried out a Business Rates Review from 2020 to 2022. We have previously argued for more fundamental business rates reform.

Amendment relating to combating rogue rating advisors

Lord Shipley’s Amendment would require the Secretary of State to consult on the benefits and practicability of a system of accreditation for rating advisors with a view to combating rogue agents.

LGA view: There is a current consultation on business rates avoidance and evasion. The LGA response is currently being finalised so we do not currently have an agreed policy on how to address rogue agents.

Amendment relating to advertising on social infrastructure sites

This Amendment after Clause 15 tabled by Lord Black of Brentwood (Conservative) and Lord Shipley provides that advertising rights in respect of social infrastructure sites including bus shelters, other advertising rights granted by contracting authorities and public telephone kiosks shall be exempt from local non-domestic rating.

LGA view: Advertising is an activity for gain. The LGA has consistently argued that advertising hereditaments should pay business rates, even those which are for a social infrastructure. In the absence of any compensation, this Amendment would reduce the total income to local government.


Arian Nemati, Public Affairs and Campaigns Adviser

[email protected]