Improvement Rate Relief and Heat Networks rate relief
In the Call for Evidence for the Business Rates Review, the government asked how business investment and growth can best be supported through the business rates system17. The most favoured approach identified by respondents was a relief on investments of between 1 and 3 years18. Respondents felt that relief should be available in particular to green energy and decarbonisation.
	In the Final Report, the government recognised that businesses who invest in their premises could face an immediate increase in bills. Therefore, the government announced a 100% improvement relief, providing 12 months relief from higher bills for occupiers where eligible improvements to an existing property increased the rateable value. It also announced an exemption for eligible plant and machinery used in onsite renewable energy generation and storage, such as rooftop solar panels and battery storage used with renewables and electric vehicle charging points, as well as a 100% relief for eligible low-carbon heat networks that have their own rates bill. The November 2021 technical consultation provided further detail of how these reliefs and exemptions would be delivered.
	The object of the improvement relief is to help occupiers making improvements to their existing business premises and is not intended to subsidise general commercial property development such as new construction or refurbishment. Under powers in the Act, the government will, therefore, target the relief on existing businesses who invest in improvements which result in a positive change in the rateable value and remain in occupation of their property. The Act also confers powers on the Welsh Ministers to make regulations in relation to the improvement relief on eligible properties in Wales. The government has set out in detail in the November 2021 technical consultation how the relief will operate under the powers in the Act in England, and ran a further consultation on the draft regulations 19 from June to August 2023. The improvement relief will take effect in April 2024 and be reviewed in 2028.
	The Act also allows the government and the Welsh Government to deliver 100% relief for heat networks from 1 April 2024. The November 2021 technical consultation provided details of how these powers would be used to target the relief at hereditaments in England being used wholly or mainly as a heat network and which have their own rating assessment. The relief will be for those networks generating from a low carbon source to ensure the policy supports decarbonisation.
	At the Spring Statement 2022, the Chancellor announced that the heat network relief would apply from 1 April 2022 so in England, for the financial years 2022/23 and 2023/24, it has been delivered using existing local government discretionary relief powers funded by the government. The government has worked with the heat network sector and local authorities to prepare and publish guidance for this relief20. Regulations will be made under the provisions in this Act and will take effect from 1 April 2024.
	At the Spring Statement 2022, the Chancellor announced that the exemption for eligible plant and machinery used in onsite renewable energy generation would also apply in England from April 2022. This was delivered by regulations made under existing powers21.