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Business Rates Relief in Wales

1. Overview

Non Domestic Rates (NDR) are also known as business rates and are taxes to help pay for local services. These are charges on most non domestic properties. If you pay business rates, your property may be eligible for business rates relief.

Some premises will be exempt from business rates, while others may qualify for:

  • the small business rates relief scheme
  • the charitable and non-profit organisations rates relief
  • relief on empty properties

Your council can also grant hardship relief to businesses if they believe that it is in the interests of the local community to do so.

 

2. How your business rates are calculated

Your business rate is calculated by taking the Rateable Value (RV) of your  property and multiplying it by the current non domestic rates 'multiplier' (or 'poundage'). The Valuation Office Agency (VOA) values properties and assigns the RV. You can appeal against its RV if you think it is incorrect.

From April 2018 the Welsh Government will set the multiplier according to the Consumer Price Index (CPI) and for the financial year 2018-19 the multiplier will be 0.514.

Appeals against property valuations

If you want to appeal contact the VOA. If you and the VOA cannot reach agreement, the VOA must pass your appeal to the Valuation Tribunal Wales (VTW).

3. Type of business rates relief

Enterprise Zones Business Rates Scheme

The Enterprise Zones Business Rates Scheme was introduced as a means of providing small and medium sized enterprises (SMEs) in Enterprise Zones with support in paying their business rates bills.  

The Scheme targets SMEs demonstrating business growth characteristics, that is, new starts or those increasing the size of their full time workforce. It forms part of the wider set of actions aimed at delivering growth and sustainable jobs in each Enterprise Zone. The scheme is only available within specific time frames.

134 applications by businesses were supported across the first 3 rounds of the Scheme, which continues to deliver support to businesses in the Zones.

Properties exempt from business rates include:

  • agricultural land and buildings including fish farms
  • buildings used for training or the welfare of disabled persons
  • buildings registered for public religious worship and church halls

You can find a list of the exempt types of property in Schedule 5 of the Local Government Finance Act 1988.

Small Business Rates Relief in Wales

A new permanent scheme came into force on 1 April 2018. The Welsh Government provides non-domestic rates relief to eligible small businesses. 

  • eligble business premises with a rateable value of up to £6,000 will receive 100% relief; and
  • those with a rateable value between £6,001 and £12,000 will receive relief on a tapered basis from 100% to zero

The following types of business will continue to get relief as follows:

Registered Childcare Premises

  • eligible registered childcare premises with a rateable value of up to £6,000 receive 100% relief; and
  • those with a rateable value between £6,001 and £20,500 receive relief on a tapered basis from 100% to zero
  • the small business rates relief scheme for the childcare providers will be further enhanced to provide 100% relief to all registered childcare providers in Wales, this higher level of relief will start on 1 April 2019, it will be in place for three years to 31 March 2022, during which time it will be evaluated to assess its effect

Download the Written Statement for 100% Rates Relief for Childcare Sector Announcement here.

Post Offices

  • Post offices with a rateable value up to £9,000 receive 100% relief
  • Post offices with a rateable value between £9,001 and £12,000 receive 50% relief

Multiple Occupation Limit

Where a ratepayer is liable for more than two properties on a single local non-domestic rating list (“local list”), and those properties meet only the rateable value conditions, the ratepayer will only receive relief for a maximum of two such properties.

Download an information leaflet and full guidance on Small Business Rates relief in Wales.

Transitional Relief

Following the 2017 non-domestic rates revaluation by the Valuation Office Agency, transitional relief will be implemented to support ratepayers whose eligibility for Small Business Rate Relief (SBRR) will be affected as a result of the revaluation.

The transitional relief scheme will be introduced to assist ratepayers in receipt of SBRR on 31 March 2017, experiencing a reduction in the percentage of SBRR they are entitled to on 1 April 2017, due to increases in their rateable value following the revaluation.

SBRR will be applied prior to transitional relief. The transitional relief will work by phasing in any resultant increases in liability over a 3 year period (25% of increased liability in year 1, 50% in year 2 and 75% in year 3).

Eligible ratepayers are those:

  • moving from full SBRR to partial SBRR
  • moving from full SBRR to no SBRR
  • moving from partial SBRR to no SBRR
  • staying within partial SBRR but seeing an increase in rateable value

High Street Rate Relief

The £5 million High Street Rate Relief Scheme is aimed at high street retailers in Wales, for example shops, pubs, restaurants and cafes, including those retailers which have seen their rates increase as a result of the 2017 revaluation undertaken by the Valuation Office Agency.

The Welsh Government is providing 2 tiers of high street rate relief, of up to £250 (Tier 1) or up to £750 (Tier 2), to eligible high street retailers occupying premises with a rateable value of £50,000 or less in the 2018-19 financial year, subject to State Aid limits.

Tier 1 properties are those meeting the high street criteria and in receipt of Small Business Rates Relief or Transitional relief on 1 April 2017.

Tier 2 properties are those meeting the high street criteria and not in receipt of Small Business Rates Relief or Transitional relief on 1 April 2017 and also seeing an increase in liability as a result of the 2017 revaluation.

It will be for individual local authorities to decide in each individual case when to grant relief, which will be available from 1 April 2018 until 31 March 2019.

Download information on  High Street Rate Relief Scheme, this guidance includes further detail on the eligibility criteria.

Hydropower Projects

We are providing grants to help eligible hydropower projects with their business rates. Hydropower projects extract energy from water courses to generate electricity. Hydropower projects with a rateable value up to £50,000 can apply for support for 2017-18 (retrospectively) and for 2018-19. For further information and to apply please see Non-domestic (business) rates support for hydropower.

Charitable rate relief

If your property is occupied by a registered charity or community amateur sports club, and used for charitable purposes, you automatically qualify for 80% mandatory rates relief.

You may qualify for relief of up to 100% at the discretion of the local authority if your property is occupied by a non-profit making body and used for purposes which are:

  • charitable
  • philanthropic
  • religious
  • educational
  • to do with social welfare
  • scientific
  • to do with literature
  • to do with the fine arts
  • to do with recreation by a not-for-profit club or society

Rates relief for empty properties

Empty business properties are exempt from paying business rates for 3 months after the property becomes vacant.

There are additional exemptions for certain types of property or for properties under a set rateable value. These include:

  • industrial premises, such as warehouses, which are exempt for a further 3 months
  • listed buildings which are exempt until they become occupied again
  • buildings with a rateable value under £2,600 which are exempt until they become occupied again
  • properties owned by charities, which are exempt if the property's next use is likely to be wholly or mainly for charitable purposes
  • community amateur sports club buildings which are exempt if their next use is likely to be wholly or mainly for a sports club
  • a business whose owner is a company which is subject to a winding-up order made under the Insolvency Act 1986 or which is being wound up voluntarily under that Act
  • a business whose owner is a company in administration within the meaning of paragraph 1 of Schedule B1 to the Insolvency Act 1986 or is subject to an administration order made under the former administration provisions within the meaning of article 3 of the Enterprise Act 2002 (Commencement No. 4 and Transitional Provisions and Savings) Order 2003.
  • a business whose owner is entitled to possession only in his or her capacity as the personal representative of a deceased person.

After the exemption period ends, you will be liable for the full business rate bill.

You should notify your local authority when your property becomes vacant and also when it becomes re-occupied.

Hardship relief

Councils can also grant hardship relief to businesses if they believe that it is in the interests of the local community to do so.

Download information about hardship relief in chapter 7 of the guide to Charities, and non profit making organisations (PDF, 250K)

 

4. Self Catering Properties

If your property is in Wales and is commercially available to let as a self catering property, provided certain criteria are met it will be rated and valued for non-domestic rates. The Valuation Office Agency (VOA) works out the rateable value based on the property type, size and location.

From 1 April 2010 in Wales, self catering property is non-domestic and therefore liable for non-domestic rates, if the VOA is satisfied that:

  • it will be available for letting commercially as self-catering accommodation for short periods totalling 140 days or more in the following 12 month period
  • the ratepayer’s interest in the property enables them to let it for such periods
  • in the 12 months prior to assessment it has been available for letting commercially as self catering accommodation for short periods totalling 140 days or more
  • the short periods it has actually been commercially let for amounted to at least 70 days during that period

From 1 April 2016 in Wales, the criteria above will continue to apply but there is also a new provision so that:

  • businesses consisting of several self catering properties at the same location or within very close proximity have the option to average the number of lettings days of the properties to meet the 70-day criterion where they are let by the same or connected businesses

You can find full guidance and advice on the rating of self catering properties in Wales in this brochure  

 

 

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