A guide to your 2019-2020 bill

Welcome to your guide.

Last year your rates will have been revalued and there is a transitional relief scheme to limit any increases to your bill.

The explanations below cover the charges and reliefs that might be applied to your bill, but we should say from the outset that the Council doesn’t set any of the elements of your business rates bill. It is worked out according to rules set down by the Government which apply nationally.

Nevertheless, the business rates team are happy to help you if you need further explanation.

A sample business rates bill

A sample business rates bill

 

The rateable value (RV) is the starting point for working out your bill. In the sample bill above this is the first figure in brackets, £21,000. This is set by the Valuation Office Agency (VOA), part of Government. All rateable values in England and Wales have been revalued to take effect from 1 April 2017. In most cases, the rateable value is based on the rental value as at 1 April 2015, compared to the previous date of 1 April 2008. This is why most rateable values in Camden have gone up, many by a significant amount.

Check your rateable value and see how it is worked out.

Have your bill handy with the property reference number towards the top. If you think an error has been made you can appeal to the VOA, but you have to pay the rates as per the bill in the meantime. If the value is reduced any overpayment will be credited back to you.

The rate poundage, the second figure in brackets, otherwise called the multiplier, converts your rateable value into the gross charge. Businesses up to £51,000 RV pay the lower multiplier of 49.1p and over £51,000 the higher multiplier of 50.4p. The difference of 1.3p is called a supplement which larger businesses over £51,000 RV pay to finance small business relief (see later).

The Business Rates Supplement.  The Greater London Authority (GLA) charges a levy on businesses over £70,000 RV of 2p in the £ to pay for the Crossrail project. We collect this and pay it over to the GLA.

Transitional amount. This is the most complex part of the bill. It is a scheme which limits the amount you have to pay each year when your gross rates have gone up over a certain amount. Sometimes it’s called phasing and can last for up to 5 years. Similarly, if you have had a reduction in your gross rates – much more common outside of London – then there is a limit to how much your rates go down each year. In this way the scheme pays for itself nationally. The limit on your rates increase depends on the RV of your property, see the table below.

Transitional relief explained for bills going up.

Transitional relief explained for bills going up.

 

 First of all transitional relief is always calculated using the small business rates (SBR) multiplier, whatever your actual rateable value. The supplement of 1.3p is added on at the end for businesses over £51,000 RV.

The notional charge (NCA) is what you would pay if you had to pay the full bill this year. It is the rateable value at 01/04/19 multiplied by the small business rates (SBR) multiplier of 49.1p.

The next step is to work out what your rates bill was for 2018/2019, less any supplement if applied and after transitional relief has been deducted. If you had a change in rateable value in 2018/2019, or moved in part way through the year, you will need to work this out base on the daily rate you were paying on 31/3/19 and multiplying by 365. This is called base liability (BL).

Now, the base liability may then only be increased by the percentage in the table below and then by inflation of 2.3%. You’ll see this part called the (AF) or appropriate fraction. So for a business between £28,000 and £100,000 RV the AF is 20.0% x 2.3% inflation, or 1.2 x 1.023 = 1.2276. Multiplying your base liability BL by this AF gives the maximum amount you have to pay for 2019/20, or transitional limited amount (TL).

Finally, in order to reduce your full bill, the NCA, to the TL, we take one from the other and this is your transitional relief. If your TL is greater than your NCA, then you pay the NCA and do not receive any transitional relief and the box on the back of your bill will be empty.

Don’t forget, the supplement to pay for small business relief does not feature in the transitional relief calculation. So if your new RV is over £51,000 you have to add on the supplement which is your new RV x 1.3p.

Next year will be a similar calculation using the 2020/21 percentage from the table and the CPI inflation rate for next year, but your base liability calculation moves on one year. This is how your increase gets phased in, although a lot of businesses may well be paying their full bill in year 2.

Transitional relief explained – for bills going down

Transitional relief explained – for bills going down

 

First of all transitional relief is always calculated using the small business rates (SBR) multiplier, whatever your actual rateable value. The supplement of 1.3p is added on at the end for businesses over £51,000 RV

The notional charge (NCA) is what you would pay if you could pay the new bill straight away. It is the new rateable value multiplied by the small business rates (SBR) multiplier of 49.1p.

The next step is to work out what your rates bill was for 2018/2019, less any supplement if applied and after transitional relief has been deducted. If you had a change in rateable value in 2018/2019, or moved in part way through the year, you will need to work this out base on the daily rate you were paying on 31/3/19 and multiplying by 365. This is called base liability (BL).

Now, the base liability may then only be reduced by the percentage in the table below and then by inflation of 2.3%. You’ll see this part called the (AF) or appropriate fraction. So for businesses in 19/20 of an RV less than £28,000 the AF is a reduction of 35% x 2.3% inflation. Multiplying your base liability BL by this AF gives the new bill you have to pay for 2019/20, or transitional limited amount (TL).

So, in order to increase the NCA, to the TL, we take one from the other and this is the transitional premium you must pay so that the full benefit of your rates reduction is phased in.

Don’t forget, the supplement to pay for small business relief does not feature in the transitional relief calculation. So if your new RV is over £51,000 you have to add on the supplement which is your new RV x 1.3p.

For properties with an increase in rateable value

Type

Size

2017/18

2018/19

2019/20

2020/21

2021/22

Small

Up to £28,000

5.0%

7.5%

10.0%

15.0%

15.0%

Medium

£28,000 - £100,000

12.5%

17.5%

20.0%

25.0%

25.0%

Large

Over £100,000

42.0%

32.0%

49.0%

16.0%

6.0%

For properties with a fall in rateable value

Type

Size

2017/18

2018/19

2019/20

2020/21

2021/22

Small

Up to £28,000

20.0%

30.0%

35.0%

55.0%

55.0%

Medium

£28,000 - £100,000

10.0%

15.0%

20.0%

25.0%

25.0%

Large

Over £100,000

4.1%

4.6%

5.9%

5.8%

4.8%

 

Small business relief. After transitional relief has been worked out, some businesses may be entitled to small business relief. The eligibility criteria are explained in detail in another section, but if this has been awarded in previous years, it is carried forward this year as follows:

  • Up to £12,000 RV (Previously £6,000) – 100% relief, so the bill should be zero
  • £12,000 - £15,000 RV (Previously £6,000 - £12,000) – tapered relief.

So those with an RV just above £12,000 will receive nearly all their rates back whereas those closer to £15,000 RV will receive very little relief.

Some businesses will see this relief for the first time if the new RV is between £12,000 and £15,000 and others will see their bill reduced to zero if the new RV is between £6,000 and £12,000.

In the example below, the RV is £8,900, therefore they would receive full Small Business Rates relief and have a £0.00 charge

Example Small Business Rates relief bill

 

Charity relief and exemptions. These remain unchanged. Whatever your bill is after transitional relief, if you received charity relief in 2018/19, then this will apply at the same 80% rate in 2019/20. Similarly, some empty properties receive exemption, the rules for which are also unchanged.

Letter from the Leader of the Council

March 2019

Dear business rates payer,

We are committed to making Camden the best place in London to do business and thankful that you choose our borough to be home to yours.We also understand the impact business rates, which are set entirely by the government, have on your finances.

We recognise that following the 2017 revaluation, rates in Camden are among the highest nationally. Camden is committed to working on a long-term plan to support local businesses and we have joined other London councils and the Mayor in calling for a fairer and more locally controlled business rates system. I’m pleased to say there has been progress. This is the second year of a pilot project in London, whereby a portion of business rate growth over the upcoming year will be redistributed back into the capital.Unfortunately, the amount retained this year has reduced from 100% to 75% of any growth, with the government now taking a 25% share.

The project gives London boroughs local control to put money back into their communities. In Camden, we are investing in areas where we can make the biggest impact, including social care, business and employment support, infrastructure and affordable housing. However, the benefits for those involved in the pilot are in exchange for lower levels of government grant. The government also still retains control of business rates tax policy and valuations determining the level of your bill as well as the business rates appeals system.

Local control is especially important as we face more funding cuts from the government. Cuts, combined with increasing demand and a rise in costs, mean we have had to reduce our budget by £169 million since 2010, to be followed by a further estimated £35-40 million from our annual budget by 2022. This includes £23 million in 2019/20. You can find out about our budget plans at camden.gov.uk/financialchallenge.

In the shorter term, for the third consecutive year, the government have made funds available for councils to support certain types of business, particularly small businesses, with discretionary reductions. We’ll continue to put these into effect quickly, with minimum impact on your time, by automatically deducting them from your annual bill.

Where there are large increases in rates as a result of the revaluation, businesses will receive from £150 to £8,000 relief. Over 5,000 businesses will receive this support. This year and next we will be awarding one third off rates bills for retail businesses with a rateable value below £51,000. With a total award of £8 million, around 2,000 businesses will benefit.
More than 150 small businesses will also continue to receive relief where there are increases in rates of over £600 from one year to the next as a result of the revaluation.

I hope the above provides you with some context during what we know is a difficult time for Camden and nationally. We value your business and are committed to continuing to work with you to understand the needs of everyone who does business in Camden.


Councillor Georgia Gould
Leader of the Council

Non-domestic rates

National non-domestic rates, which is otherwise known as business rates, is a tax that the Council collects directly on behalf of Central Government, which is where it currently differs from council tax.

The charge was first introduced in 1990 and calculated by multiplying the property’s rateable value, which is determined by the Valuation Office Agency (VOA), against one of two poundage multipliers, which are used to calculate the bill based on the property’s rateable value.

The lower multiplier of 49.1p is for small businesses with a rateable value below £51,000 and the standard multiplier, which is 50.4p in the £1.00, is used for those properties with a rateable value above.

These are set annually by Central Government and passed to the Council.

Money collected from business rates is shared out between the Government (33%), the Greater London Authority (37%) and Camden Council (30%). In 2017/18 we aim to collect £625m, of which Camden’s 30% share is £187.5m.

Camden is not allowed to keep all of this money, as it has a high business rates base, of which £94m is paid back to the Government to redistribute to those councils who by comparison have a low base. We also pay an additional growth levy of £4.5m, which offsets Camden’s locational advantage, against those councils that don’t achieve the same revenue return on a comparable increase in their rating base.

After these deductions are made, Camden Council will end up keeping £89m of the business rates that it collects. This goes toward paying for local services within the Borough.

Business rates are charged on all assessments that are not used for domestic purposes (for example, shops, offices, factories, car parking spaces, and advertising sites). There are approximately 17,500 live assessments in Camden that pay business rates and we have the third largest rating base in the country, with a total rateable value of just over £1.6 billion. This meant that in 2016/17 the business rates section collected over half a billion pounds.

The collection of your commercial recycling and waste is not included with the payment of non-domestic rates. Businesses are responsible to take the necessary steps to ensure their recycling and waste is disposed of correctly and to make their own arrangements for this. Please see the link below for further details:

National Non-Domestic Rating Multiplier

The Council works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers: the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The former is higher to pay for small business rate relief. Except in the City of London where special arrangements apply, the Government sets the multipliers for each financial year for the whole of England according to formulae set by legislation. The current multipliers are shown on the front of your bill.

For this financial year the standard non-domestic rating multiplier has been set at 0.504 pence in the pound and the small business non-domestic multiplier has been set at 0.491 pence in the pound.

Business Rate Supplements (BRS)

The Business Rate Supplements Act 2009 enables levying authorities - county councils, unitary district councils and, in London, the Greater London Authority - to levy a supplement on the business rate to support additional projects aimed at economic development of the area. Business Rate Supplements (BRS) are not from 1 April 2017 applicable to properties with a rateable value of £70,000 or below, and authorities have discretion to increase that threshold. The total maximum BRS which may be levied by a levying authority is 2p per pound of rateable value. Levying authorities have the power to apply such reliefs to the BRS as they think appropriate and in such cases must include an explanation of the rules for the application of those reliefs in the final prospectus for the BRS.

The business rate supplement is being levied by the Greater London Authority in relation to the Cross Rail project. Further information may be found in the BRS project prospectus, Greater London Authority’s contribution to the Crossrail Project here

Crossrail Business Rates Supplement (BRS) - 2019/20

Business Improvement District (BID) levy

What is a BID?

Business Improvement Districts (BIDs) are business led partnerships created through a ballot process to deliver additional services to local businesses. A BID is a defined area in which a levy is charged on business rate payers in addition to the business rates bill. This levy is used to develop projects which benefit businesses in the local area.

Find more general information about BIDs from GOV.UK

BIDs in Camden

There are six business improvement districts in Camden, which were introduced following successful ballots being conducted in their respective areas. They each have their own rules and BID levy is applied to rated properties in the BID area with a rateable value of:
 
These have all been set up by the business community with the support of local businesses, to help provide additional services and facilities within their given areas.

While the Council is responsible for the billing and collecting the money on behalf of the BID operators, Camden does not determine how the BID is operated. Any queries regarding each respective BID should be directed to the relevant operator.

Payments

If your query relates to payment please contact the business rates section

Budget changes for 2019/20

Retail Discount

At Autumn Budget 2018, the Government announced a one-third discount for eligible retail businesses with a rateable value of less than £51,000, up to state aid limits. This scheme will run for two years from April 2019. This discount will be applied to the bill after the application of any reliefs, excluding any local discounts.

Additional rates relief for small businesses

Ratepayers losing Small Business or Rural Rate Relief as a result of the 2017 revaluation will have their increases limited to the greater of either:

(i) a cash value of £600 per year, or

(ii) the matching cap on increases for small properties in the transitional relief scheme.

This relief will run for 5 years to 31st March 2022 and ratepayers will receive the relief until this date or they reach what their bill would have been within the relief scheme, whichever is first.

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988).

Further information can be obtained by contacting us directly.

Discretionary Support Fund - £300m

The Government is providing £300 million of funding to local authorities over 4 years to 31st March 2021 to provide discounts to ratepayers in their area on a discretionary basis. Each authority has been allocated a share with which to design and implement a scheme to deliver targeted support to ratepayers. The £300m will cover the 4 years from 2017/18: £175m in 2017/18; £85m in 2018/19; £35m in 2019/20 and £5m in 2020/21.

 

Camden’s allocations can be found at Gov.uk

This relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Further information can be obtained by contacting us directly.

Revaluation 2017 and Transitional Arrangements

All rateable values are reassessed at a general revaluation. The 2017 revaluation took effect from 1st April 2017. Revaluations make sure each ratepayer pays their fair contribution and no more, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others. Revaluation does not raise extra money for Government. 

Whilst the 2017 revaluation will not increase the amount of rates collected nationally, within this overall picture, over 7 out of 10 ratepayers will receive a reduction or no change in their bill and some ratepayers will see increases. 

For those that would otherwise see significant increases in their rates liability, the Government has put in place a £3.6 billion transitional relief scheme to limit and phase in changes in rate bills as a result of the 2017 revaluation. To help pay for the limits on increases in bills, there also have to be limits on reductions in bills. Under the transitional scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier). The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1st April 2017, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to your bill as a result of other reasons (such as changes to the amount of small business rate relief) are not covered by the transitional arrangements.

The transitional arrangements are applied automatically and are shown on the front of your bill. Further information about transitional arrangements and other reliefs may be obtained from the business rates section or the website www.gov.uk/introduction-to-business-rates

More information on the 2017 revaluation can be found at www.gov.uk/introduction-to-business-rates/revaluation