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Business Rates Alex Thompson Club Management & Governance Manager.

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Presentation on theme: "Business Rates Alex Thompson Club Management & Governance Manager."— Presentation transcript:

1 Business Rates Alex Thompson Club Management & Governance Manager

2 RFU Business Rates Update Report Structure of the Tax What is rateable? How is it valued? Calculation of rates liability Rates reliefs Coventry, Solihull & Warwickshire snap shot picture 2017 Rating Revaluation ‒ What will happen? ‒ Timeline Actions for clubs

3 Business Rates - structure of the tax Structure of the tax – England Assessments (Rateable Values) are set by the Valuation Office Agency – part of HMRC The tax rate (Uniform Business Rate multiplier) is set by the Department of Communities and Local Government (DCLG) Which is also responsible for rates reliefs The tax is collected by local authorities throughout England – more than 300 of them Was all paid on to HM Treasury – but since 2013 local authorities keep 50% of “new” rates income

4 Business Rates – What is rateable? All non-domestic property is rateable unless specifically exempt (e.g. agricultural land and buildings) Domestic property is subject to Council Tax Non-domestic property includes land and buildings Land will include pitches and car parking Buildings will include clubhouses, changing rooms, groundsmens’ stores Improvements or alterations made by the occupier are rateable As is specified plant and machinery

5 Business Rates – basis of valuation Rateable values are revised every 5 years The last revaluation was from 1st April 2010 And is based on rental values at 1st April 2008 Rateable Values are set by the Valuation Office Agency (VOA) And are available on the VOA website at: The next revaluation will be from 1 st April 2017 And will be based on values at 1 st April 2015

6 Business Rates – calculation of liability RV x Multiplier gives rate liability, but: ‒ Transitional adjustments may apply ‒ Small Business Rate Relief can also apply ‒ Along with a supplement to pay for the relief ‒ A supplementary rate (to fund Crossrail) may apply in the Greater London Authority area ‒ Business Improvement District (BID’s) levies may apply ‒ So RV x Multiplier may not give the liability! Current (2014/15) multiplier is 47.1 p with a supplement of 1.1p for properties with an RV £18,000 or more (RV £25,500 or more in London)

7 Business Rates – rates reliefs A very complicated area of law and practice There are at least 17 different business rates exemptions (unfortunately unlikely to apply to clubs) And at least 8 different business rates reliefs schemes Three of these are significant for RFU clubs ‒ Community Amateur Sports Clubs (CASC’s) relief ‒ Charitable rate relief ‒ Small Business Rate Relief Plus the possibility of discretionary rate relief granted by the Billing Authority

8 Business Rates – Small Business Rate Relief Small Business Rate Relief is a mandatory rate relief on a sliding scale To qualify for the relief the ratepayer must ‒ Either occupy only one property with RV under £12,000 ‒ Or occupy a main property with RV under £12,000 and all other properties under RV £2,600 with total RV under £18,000 (£25,500 in London) If these conditions are satisfied the relief is currently 100% for RV under £6,000 And on a sliding scale to 0% relief at RV £12,000 A very valuable relief for smaller clubs

9 Coventry, Solihull & Warwickshire Highest 2010 Rateable Value Broadstreet RFC Silhillians RFC Rugby Lions RFC Barkers Butts RFC 45,750 35,000 34,500 34, m m m m2 Lowest 2010 Rateable Value Claverdon RFC Berkswell & Balsall RFC Coventry Welsh RFC Warwickian RFC 6,500 6,900 7,000 7, m m m m2

10 Coventry, Solihull & Warwickshire 2010 Rateable Value - Mean average CSW Clubs = 15,317 – 515 m2 15,317 x multiplier (standard rate = 0.471) = £7, SRA 2013 Clubs Survey Rugby Results Average annual expenditure = £124,743, therefore business rates = 5.8% of annual expenditure (without any reliefs) Generating sufficient income is the top challenge faced by rugby clubs (73%).

11 Discretionary Rate Relief - CSW STILL TO REVIEW North Warwickshire Borough Council Stratford District Council Solihull Metropolitan Borough Council DRR – Possible 100% Rugby Borough Council Only offer potential 20% DRR to CASC or charities

12 Discretionary Rate Relief - CSW REVIEWED Nuneaton & Bedworth Borough Council Previously DRR – Possible 100% New DRR – Possible 50% - more stringent criteria Possible further 10% DRR to CASC or charity Nuneaton RFC = 50% DRR = £4,458 bill Coventry City CouncilPreviously DRR – Possible 100% New DRR in 2015 – Possible 100% - more stringent criteria Warwick District CouncilPreviously DRR – Possible 100% New DRR – Possible 100% - more stringent criteria

13 Coventry City Council – DRR Policy 2 sets of audited accounts = conduct a financial assessment. Applications annually; Must demonstrate that it supports the Council’s objectives of attracting business, growth and jobs to the city or That it is a community group or an advice organisation providing advice or support to the most vulnerable residents;

14 Warwick District Council – DRR Policy 3 sets of accounts = conduct a financial assessment (key factor – 53% weighting). Applications annually; Importance of the organisation to the local community test. Youth Development Policy & Equalities Policy Provide their facilities free of charge or at reduced rates for: Use by disabled people or special interest groups, Provide coaching/workshops/training Kenilworth RFC previously DRR = 100% = £6,065 -New DDR Policy granted 20%, two x appeals = 50% = increase bill of £3,032.50

15 Business Rates Significant cost to rugby clubs. Every Local Authority is different – no consistent approach across the country. Local Authority cuts = Reviewing DRR Policies = increased bills for rugby clubs.

16 Business Rates – 2017 Rating Revaluation New Rateable Values from 1 April 2017 Will be based on rental values at 1 April 2015 The Valuation Office Agency will not publish the new RV’s until October 2016 In the meantime clubs may receive a “Notice Requiring Return of Information” from the VOA There are fines for failing to return these There will be difficulty in budgeting for rates beyond April 2017 And a need to investigate new Rateable Values when these are published

17 Business Rates – 2017 Rating Revaluation Notices requiring return of information ‒ A legal requirement to complete and return these within 56 days ‒ And a civil penalty for failing to comply ‒ This information could affect the future rateable value so the forms should be completed carefully Budgets for rates from April 2017 ‒ Remember that RV’s will change from 1 April 2017 ‒ And a new UBR multiplier will be set ‒ Big changes in rates liability are likely to be phased in ‒ Property improvements are subject to rates so clubs should budget for this

18 Business Rates – 2017 Rating Revaluation New rateable values published October 2016 on the VOA website

19 Business Rates – 2017 Rating Revaluation Search by postcode

20 Business Rates – 2017 Rating Revaluation Look at valuation

21 Business Rates – 2017 Rating Revaluation Compare with others

22 Business Rates – Appeals against values In England appeals can be made any time after the new valuations come into force (1 st April 2017) and up to the end of the Rating List (31 st March 2022) But only one appeal can be made “per event” Appeals can backdate to 1 st April 2017 or to the relevant date if later As well as making appeals against Revaluation assessments, ratepayers can make appeals if the VO alters an assessment of is there is a “material change of circumstance” (MCC)

23 Business Rates – Actions for Clubs Rateable Values will change from 1 st April 2017 – clubs should be aware of this Notices Requiring Return of Information will be issued – complete these promptly and carefully In the meantime check what reliefs may be available Mandatory reliefs available for CASC’s, Charities, and small businesses Discretionary reliefs under pressure New Rateable Values published in October 2016 Use the VOA website to check and compare before appealing


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