I know a number of businesses in Porthleven and the surrounding area saw some eye-watering increases in Business Rates after the Valuation Office Agency (part of HMRC) reviewed the current tariffs. In a process that is little better than rolling a dice and multiplying the figure by that number thrown, the method of justifying an increase is if an area is successful in terms of shop space demand, and doing well, then the Valuation Office Agency can charge more.
In combating these hikes, I am pleased to say Cornwall Council is going to use a £2.72 million business rate relief fund to help as many businesses as possible. This funding is Cornwall’s share of a national business rate relief fund announced in the March Budget to support businesses facing a steep rise in their rates as a result of the 2017 revaluation
It has been agreed to assist all businesses with a rateable value of less than £200,000 whose business rates have increased by more than 12.5% following the revaluation. This will provide 50% discretionary rate relief on the increase in rates in 2017/18, decreasing over the following three years on a pro rata basis as funding is reduced. The scheme is expected to help 875 businesses.
Qualifying businesses will see the relief awarded against their gross bull after any other reductions have been taken into account. My suggestion would be for anyone who believes they should get this help is to contact Cornwall Council’s Business Rates dept.
It might seem daft, but public toilets are liable for business rates (officially called Non-domestic Rates NDR), even though they are not something I would call a businesses, more of a service. Cornwall Council has previously lobbied Central Government over the unfair burden of charging business rates on public toilets. No matter if they are run by a Town and Parish Council, a community group, or Cornwall Council.
The good news is the Government has tweaked the legislation and will give local council’s the powers to award discretionary relief from April 2018 under the Local Government Finance Bill. I welcome this.
However, there is a sting in tail. On one hand the Government allows Cornwall Council not to levy this charge, but it will be the local authority who have to pick up funding shortfall in funding.
Applying these powers to the public toilets that are the responsibility of Town and Parish Councils in Cornwall would create a £156,000 funding shortfall for the Council. If the powers were applied to all public toilets in Cornwall, the shortfall would increase to around £250,000. That’s a lot of money to lose. I believe the Government should compensate local authorities for any such funding shortfall. It has done previously with other business rate relief measures.
In the past, Cornwall Council collected business rates and sent them to the Government, who in turn gave the Council a percentage back. Then, we collected and kept part of the NDR with the rest going to the Government. Now the Council keeps all, but gets no grant from the Government.
The Local Government Secretary, Eric Pickles announced yesterday that local authorities will soon be able to keep (there is a catch) Non-Domestic Rates (NDR), otherwise known as business rates. Currently, local councils receive their funding from three main sources: grants from central government; council tax; and other locally generated income (such as fees and charges for services).
The catch is the government is not going to allow the local authority to keep all of the NDR. The government wants to make sure there is a fair starting position by taking business rates away from those with too large an amount in comparison to their current spending, and then top up those authorities with too little, again in comparison to their current spending.
Yes, on one hand it looks like the government will give greater flexibility to local authorities on keeping and spending NDR, but it won’t let local authorities set NDR, as this power will remain with the government (at the moment).
To be honest, I doubt it will mean extra money, as if you gain from the NDR, you will have a reduced amount in the formula grants handed out by the government. Still, I do believe this could work positively for Cornwall, but we won’t know for sure until the number crunchers get out their calculators to make sure.
The Communities and Local Government Department has released a ‘Plain English Guide’ to the proposals. They explain without government speak the proposals.