Business rate reductions and reliefs

There are certain circumstances in which full rates may not payable.

• When a property is empty
• Where the occupier qualifies for small business rate relief
• When the occupier is a charity
• Where the occupier is a community amateur sports club
• Where the occupier is a "not for profit" organisation
• Certain properties which are located within a designated rural area
• Where hardship relief is appropriate
• Where the property is not fully occupied

Charities

Registered charities, which use premises for charitable purposes, are generally entitled to 80% relief from rates. This includes charity shops, provided that the goods sold are wholly or mainly donated.

Certain other organisations, such as universities, which are exempt from registration as a charity may also qualify for relief.

If the relevant conditions are met, this relief is mandatory, i.e. it must be granted, and the government reimburses the council in full.

Community amateur sports clubs (CASCs)

Sports clubs, which are registered as community amateur sports clubs with the inland revenue, qualify for 80% relief. Further details on how to register as a CASC can be found on the HMRC website http://www.hmrc.gov.uk/charities/casc/tax-relief.htm or by writing to:

Inland Revenue Charities
Sports Club Unit
St John's House
Bootle
Merseyside
L69 9BB

Relief for non profit making organisations

Councils may also grant discretionary relief to certain other non-profit-making bodies, e.g. sports clubs and community associations. The government reimburses the council for 75% of any of this relief granted.

The council has the discretion to "top-up" any mandatory relief to a maximum 100% relief but as 75% of any additional relief is paid for by the council tax payers it will only be granted if the organisation benefits local residents.

Rural rate relief

This was introduced from 1 April 1998 to allow for relief for certain types of properties, which lie within a designated rural settlement.

Properties which qualify are:

• Properties,which operate as the sole general, store or post office in a qualifying rural settlement, and have a rateable value of less than £8,500
• Properties which operate as the sole public house or petrol filling station within a qualifying rural settlement and have a rateable value of £12,500 or less

The relief is 50% and fully funded by central government.

The council has the discretion to 'top up' this relief and the scheme also gives the council discretion to allow relief for other business premises in rural settlements if:

• The rateable value of the property is £16,500 or less
• The property is used for purposes which are of benefit to the local community
• To allow relief with regards to the interests of those who pay council tax to the council, (since the relief is partly funded from council tax receipts)

Hardship relief

Councils may grant relief to a ratepayer who would suffer hardship if they paid the whole of the rates bill. The government only reimburses the council with 75% of the relief granted in these circumstances, so a quarter of the cost falls directly on council tax payers. For this reason, the council in Preston will usually only grant this relief where it is evident that it is in the interests of the community that the ratepayer remains in business because either:

• he/she provides a unique, regularly required amenity, e.g a village general store
• or the loss of employment provided by a ratepayer would be severely damaging to the local community

Before the council will consider granting this relief, a written request must be made and copies of audited accounts supplied.

Properties in partial occupation

If a property is temporarily only partly occupied, it is not always possible or necessary to create two separate properties in the rating list; for example, where a company phases its removal from one set of premises to another, or where the use of property is temporarily restricted by flood or fire, it would be inappropriate to have the rating list amended because the circumstances are not permanent.

The council can ask the valuation office to determine the rateable values of the occupied and unoccupied parts. The rates payable on each part can then be worked out and relief is granted so that the ratepayer only pays the full rates for the occupied part plus the rates for the unoccupied part. (If an exemption applies to the unoccupied part, however, then nothing is payable for that part.)

This relief is given as laid down in section 44a of the local government finance act 1988 and the government reimburses the council in full.

The relief is granted either to the end of the financial year or to the date on which the property ceases to be only partly occupied, whichever is the earlier. This relief can only be extended in exceptional circumstances.