On the 5 December 2013 the Chancellor of the Exchequer announced a package of business rate measures.
The £1000 discount and reoccupation relief will be delivered through authority local discount powers (under s47 of the Local Government Finance Act 1988). The other measures will require legislative changes. We will provide further information on implementation of all measures shortly.
Under Schedule 7 to the Local Government Finance Act 1988 as amended there are two multipliers. The small business non-domestic rating multiplier, which is applicable to those that qualify for small business rate relief, and the non-domestic rating multiplier, which includes the supplement to pay for the small business rate relief scheme.
The small business non-domestic multiplier is determined by Schedule 7 to the 1988 Act. These rules ensure that the small business multiplier in 2014-15 is based on the 2013-14 multiplier adjusted for Retail Price Index inflation for September 2013 (3.2%) unless HM Treasury exercises its order making power.
As mentioned above, the Chancellor announced at the Autumn Statement that HM Treasury will exercise that order making power and reduce the Retail Price Index increase to 2%.
This results in a provisional small business non-domestic multiplier for 2014-15 of 47.1p.
Schedule 7 to the 1988 Act also provides that the non-domestic rating multiplier is the small business non-domestic multiplier plus an adjustment to fund the estimated cost of the small business rate relief scheme.
The Secretary of State has estimated that the supplement to fund small business rate relief should be 1.1p for 2014-15.
The provisional non-domestic multiplier will therefore be 48.2p in 2014-15.
In accordance with Schedule 7 to the 1988 Act, the provisional multipliers will be confirmed after either the local government finance report for 2014-15 has been approved by the House of Commons or 1 March 2014, whichever is earlier.
The Government has also published a consultation paper on reforms to the business rates appeal process. We share authorities’ concerns about delays in dealing with appeals and the financial uncertainty this brings under the rates retention scheme.
The Valuation Office Agency have reduced the number of outstanding appeals in 8 successive quarter to less than 170,000 and the Government has committed to clear 95% of those currently outstanding appeals by July 2015. Additionally, the proposals in the consultation paper will:
We believe these proposals will allow well founded challenges to be resolved faster bringing greater financial certainty for local government.