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.
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.
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.
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.
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.
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.
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.