Section 1: Local rating: liability and mandatory reliefs for occupied hereditaments
Section 1 of the Act makes provision as to the liability and mandatory relief for occupied properties. Most of section 1 (which introduces a new Schedule 4ZA for the rules to determine chargeable amounts) re-enacts the provisions currently in section 43 and 44 of the 1988 Act. The changes in Schedule 4ZA to the existing provisions in section 43 and 44 are:
The introduction of improvement relief. Part 2 and paragraph 3 of the new Schedule 4ZA provides the circumstances in which improvement relief will apply on the local rating list where:
The day concerned is within one year of qualifying improvements having been completed (the meaning of qualifying improvements being given in regulations by the appropriate national authority (the Secretary of State in relation to England or the Welsh Ministers in relation to Wales)) and any other conditions prescribed by the appropriate national authority are met. Details of how the government intends to use these powers to set the parameters of the improvement relief in England were explained in the November 2021 technical consultation and in draft regulations published for consultation between June and August 2033 1 . The government intends that improvement relief is available on qualifying improvements for one year but under paragraph 3(3)(a) the appropriate national authority may extend that period, and
The day concerned falls before 1 April 2029. The government intends that relief will be available on qualifying improvements which are completed before 1 April 2028 (and therefore works completed during 2027/28 may continue to receive one year of relief in part during the year 2028/29). The government has said improvement relief will be reviewed in 20282 and, therefore, a power has is included in paragraph 3(3)(b) for the appropriate national authority to adopt a later date than 1 April 2029.
Where the conditions for improvement relief in paragraph 3 of Schedule 4ZA have been met then paragraph 10(2)(a) of Schedule 4ZA provides that the chargeable amount is found using the hereditament’s rateable value less the value G where G is prescribed or calculated in accordance with provisions prescribed by the appropriate national authority. Details of how the government intends to prescribe G were explained in the November 2021 technical consultation and the draft regulations published for consultation in June 2023. Deducting G from the rateable value for the period of the relief will ensure ratepayers do not pay business rates on the change attributable to the qualifying improvement works.
The introduction of Heat Network Relief. Part 3 and paragraph 5 of the new Schedule 4ZA makes provision for cases where the chargeable amount is zero – i.e. full mandatory relief. Paragraph 6 provides full mandatory relief for heat networks. To be eligible for the relief the conditions of paragraph 6(1) must be met:
The hereditament is wholly or mainly used as a heat network (the meaning being given in regulations made by the appropriate national authority) and any conditions prescribed by the appropriate national authority are met. Details on how the government intends to use these powers in relation to England were explained in the November 2021 technical consultation, and
The day concerned falls before 1 April 2035. The government has said that the relief in England will apply up to 1 April 2035 but under paragraph 6(3) the appropriate national authority may extend that date by regulations.
Providing for rural rate relief in England to be a full relief at paragraph 8. The government has ensured that those eligible for rural rate relief receive 100% relief since 1 April 20173 by funding local government to use their discretionary powers to top up the existing 50% mandatory relief. Paragraph 8 will put those arrangements on a mandatory basis.
New provisions (in paragraph 10(9) & (10)) allowing the Treasury to prescribe whether an English hereditament’s chargeable amount should be calculated from the small business non-domestic rating multiplier or the national non-domestic rating multiplier. Currently only those hereditaments eligible for small business rate relief are eligible for the small business non-domestic rating multiplier.
The removal of reliefs which are now obsolete. The mandatory rate relief for former agricultural buildings (sections 43(6F) to (6L) of the 1988 Act) which expired on 15 August 2006 and the telecoms relief (sections 43(4E) to (4H) of the 1988 Act) which expired on 1 April 2022.