Presentation on theme: "Localisation of Business Rates Cllr Terry King. Background Business Rates (NNDR) are currently collected by the Local Authority (LA) as an agent of central."— Presentation transcript:
Localisation of Business Rates Cllr Terry King
Background Business Rates (NNDR) are currently collected by the Local Authority (LA) as an agent of central government. The amount collected, less some costs is paid over to central government ie it is pooled. As part of the Local Government Settlement, NNDR is redistributed to LAs to fund services. There is no direct link between the NNDR collected locally and the amount of NNDR ‘grant’ an LA receives. From 1 April 2013 the above arrangements will cease and LAs will retain the business rates they collect – subject to a number of rules and conditions!
What we know For each LA a ‘needs’ baseline and a ‘business rates’ baseline will be set The needs baseline will be set based on the 2012/13 Formula Grant Allocation (subject to limited alterations) The business rates baseline will be set based on average business rates income over a period of years (yet to be determined) If NNDR income exceeds the needs baseline then the LA will pay a tariff to central government A top up will be received by a LA where the NNDR income is below their needs baseline
What we know If a LA increases their business rate baseline they will be entitled to keep a proportion of the extra NNDR income If an LA experiences a significant reduction in their business rate baseline then they may be entitled to a safety net payment from central government Details of the scheme released so far show that the impact of a reduction in the baseline will be greater than the gain from an increase in the baseline.
Uncertainties The needs baseline has not yet been set therefore we do not know what the level of income from 1 April will be. This is expected in the Autumn No decision has been made on how the average business rate baseline will be calculated. This could make a significant difference to Rutland due to recent closures such as HMP Ashwell There is no confirmation of how the safety net will work i.e. what value or proportion of reduction business rates income triggers assistance from central government