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House of Commons Hansard
x
01 March 2010
Volume 506
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To ask the Secretary of State for Communities and Local Government what the maximum percentage increase in business rates in each individual year of the 2010 to 2015 rating cycle will be as a result of the transitional relief scheme for the 2010 business rates revaluation. [319215]

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The 2010 Business Rates Transitional Relief scheme limits annual increases in liability resulting from revaluation, before changes in other rate reliefs have been applied to set percentages for each year. The individual caps on increases for each year of the 2010 revaluation for small and large properties is set out in the following table.

Transitional Relief 2010 revaluation (before inflation)

2010-11

2011-12

2012-13

2013-14

2014-15

Upward cap

Small properties

5

7.5

10

15

15

Large properties

12.5

17.5

20

25

25

Note:

These are year on year caps on increases. Small properties are those whose rateable value for 1 April 2010 is less than £18,000 or less than £25,500 in Greater London.

The five-yearly business rates revaluations make sure that each business pays its fair contribution and no more by ensuring that the share of the national rates bill paid by any one business reflects changes over time in the value of its property relative to others. The 2010 Revaluation will not raise a single extra penny for Government Over a million properties will see their business rate liabilities come down as a result of revaluation. Our £2 billion transitional relief scheme to limit the impact on the minority with bill increases will ensure that in 2010-11 no business property sees its rates bill increase by more than 11 per cent. (after inflation) as a result of the revaluation, with maximum increases capped at just 3.5 per cent. (after inflation) for small properties. That is on top of the wider support available to help ease business pressures including discounted rate bills for small businesses and deferring tax payments.

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To ask the Secretary of State for Communities and Local Government what the minimum percentage reduction in business rates in each year of the 2010-15 rating cycle is to be as a result of the downward phasing element of the transitional relief scheme for the 2010 business rate revaluation. [319261]

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The 2010 Business Rates Transitional Relief scheme limits annual increases in liability resulting from revaluation, before changes in other rate reliefs are applied by set percentages for each year. This relief is funded by limiting annual reductions in bills due to the revaluation. The individual caps on reductions for each year of the 2010 revaluation for small and large properties is set out in the following table.

Transitional Relief 2010 revaluation (before inflation)

Percentage

Downward cap

Small properties

Large properties

2010-11

20

4.6

2011-12

30

6.7

2012-13

35

7

2013-14

55

13

2014-15

55

13

Note:

These are year on year caps on reductions. Small properties are those whose rateable value for 1 April 2010 is less than £18,000 or less than £25,500 in Greater London.

The five-yearly Business Rates Revaluations make sure each business pays its fair contribution and no more by ensuring that the share of the national rates bill paid by any one business reflects changes over time in the value of its property relative to others. The 2010 Revaluation will not raise a single extra penny for Government.

Over a million properties will see their Business Rate liabilities come down as a result of revaluation. Our £2 billion Transitional Relief scheme to limit the impact on the minority with bill increases will ensure that in 2010-11 no business property sees its rates bill increase by more than 11 per cent. (after inflation) as a result of the revaluation, with maximum increases capped at just 3.5 per cent. (after inflation) for small properties. That is on top of the wider support available to help ease business pressures including discounted rate bills for small businesses and deferring tax payments.

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To ask the Secretary of State for Communities and Local Government what timetable he has set for the publication of data on the take-up rate of small business rate relief; and how many local authorities provided data for the survey. [319267]

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The report “Small Business Rate Relief—Improving Evidence on Eligibility and Take-up” was published on 9 December 2009 and it estimates that of the approximately 1.2 million non-domestic properties in England which fall below the current rateable value (RV) thresholds for SBRR, around 575,000 are occupied by eligible small businesses. This report has been validated by an independent peer review and is available at:

http://www.communities.gov.uk/publications/localgovernment/smallbusinessmethod

New experimental statistics on the number of hereditaments claiming SBRR were published on the Communities and Local Government website on 25 February 2010. The statistical release, entitled “Number of Hereditaments Benefiting from Small Business Rate Relief and the Number of Empty Hereditaments: Experimental Statistics” is available at:

http://www.communities.gov.uk/publications/corporate/statistics/sbrrfeb2010

All billing authorities provided data on the number of hereditaments claiming SBRR; further information concerning the validation of these data is available in the 'data quality' section of the above statistical release.

In the light of these new statistics we have updated the published estimate of take-up. Local authorities estimated that 462,000 hereditaments were benefiting from SBRR on 31 December 2008. By applying that figure to the estimated 575,000 properties on the 2005 rating list occupied by eligible small businesses, it is estimated that around 80 per cent. of those eligible were claiming SBRR in 2008-09—see table 1 as follows:

Table 1: Take-up of SBRR—numbers claiming

2006-07

2007-08

2008-09

Number of hereditaments actually claiming SBRR (Thousand)

396

433

462

Number of hereditaments estimated to be occupied by eligible small businesses (Thousand)

575

575

575

Percentage of estimated eligible actually claiming

69

75

80

Relief granted to small businesses has been increasing since SBRR was introduced—from £202 million in 2005-06 to £298 million in 2008-09. This represents a real terms increase of 34 per cent. Furthermore in 2008-09, 92 per cent. of the total relief that would be paid if all those estimated to be eligible were to claim, was actually being paid—see table 2 as follows:

Table 2: Take-up of SBRR 2005-06 to 2008-09—relief

2005-06

2006-07

2007-08

2008-09

Total relief that would be paid out if all properties estimated to be occupied by eligible small businesses were to claim1 (£ million)

295

300

315

325

Relief actually claimed (£ million)

202

237

259

298

Percentage take-up2

69

78

83

92

1 For details of how this estimate was made please see the paper “Small Business Rate Relief—Improving Evidence on Eligibility and take-up: Methodology.” 2 Percentage of total relief, which would be paid if all eligible small businesses claimed it, that was actually paid.

The Government have already removed the requirement for small businesses to reapply for the relief annually, and are taking further action to maximise take-up by removing the requirement to reapply at revaluation. This will reduce considerably the administrative burden on both small businesses and local authorities.