Agenda item - Member Involvement

To consider the following matters raised by councillors:

(c)      Letters: to consider any letters;

Councillor Mac Cafferty – Business Rates (copy attached).

137.1    The Chair noted there was a letter from Councillor Mac Cafferty in relation to Business. Councillor Mac Cafferty spoke to his letter stating that the thrust of it sought clarification on how the changes would affect the city, and its profile of businesses. There was concern that the changes would be difficult for smaller businesses, and it was hoped there was an action plan proposed by the Administration. The relief fund was recognised, but there could still be the need for additional local assistance.

138.1    Councillor Hamilton gave the following response:

              “The Valuation Office Agency’s 2017 Revaluation has resulted in some significant changes in Rateable Value for some properties. The Rateable Value is only the starting point of calculating how much a ratepayer is liable to pay. Business Rates bills have now been issued and these will show the true increase once all the relevant calculations have been applied.

Although the setting of bills is outside of the council’s control, we are concerned about the impact on local business. Although in Brighton and Hove, roughly 57% of non-domestic properties will have no increase, or a reduction to their bill, 7% will have an increase of between 0% and 5%, a further 18% will have an increase of 5% - 10% and the remaining 18% will have an increase above 10%.

However there is some transitional protection provided by the government to limit the increases to bills. This would apply to the World’s End pub (as referenced in the member letter) meaning that the 123% figure would not apply to the increase to its bill. Furthermore, pubs with a Rateable Value below £100,000 will also receive a £1,000 discount, announced by the government in the Spring Budget. However, in future years, the bills will increase as the transitional protection reduces.

A further measure that will help some businesses in the city concerns the increase in the threshold for Small Business Rate Relief from £6,000 to £12,000; more businesses are now in scope for 100% relief.

Online businesses and retailers are not specifically excluded from the change. Every non-domestic property has been revalued. However, online retailers are not necessarily limited to prime locations and premises, and so they may have more freedom to choose premises that have a lower Rateable Value.

Although revaluation was first announced in October 2016, it was only in the Spring Budget that further measures were announced on top of transitional protection:

1)    A £300 million discretionary fund, to be split among Local Authorities and administered locally.

2)    A £1,000 discount for pubs with a rateable value below £100,000 (this would include The World’s End)

3)    Ratepayers losing all or part of their Small Business Rate Relief as a result of revaluation will have their bill increase limited to no more than £50 per month. Many Guest Houses are particularly affected by losing this relief and so they will be beneficiaries of the new protection.

Unfortunately none of these measures were announced in time to be included on this year’s Annual Bills. However, once the government has passed the necessary legislation, and our software company has issued updates so that we can apply the changes, we will rebill the customers who are affected.

However, we remain concerned about the impact on local businesses from the revaluation and we will be drawing up plans for a new discretionary scheme at the earliest opportunity.”