Business rates

Portsmouth City Council has access to limited funds from government to finance the COVID-19 Additional Relief Fund (CARF). It is anticipated that relief allocations will be restricted to a certain percentage, which means that businesses who qualify are likely to still have some business rates to pay.

Subject to eligibility conditions, relief will be awarded within each business sector, in line with the funding allocation methodology defined by the Department for Levelling Up, Housing & Communities, in the distribution of grant allocations to billing authorities responsible for billing business ratepayers. This allocation methodology uses the change in Gross Value Added (GVA) as proxy for the economic impacts of COVID-19 on each business sector.

Whilst Portsmouth City Council is responsible for designing the local CARF scheme, in developing and implementing the scheme, billing authorities:-

• Must not award relief to a ratepayer who for the same period of the relief either receives or would have been eligible for the Expanded Retail Discount, which covers retail, hospitality and leisure sectors, or the Nursery Discount.
• Must not award relief to a hereditament for a period when it is unoccupied, other than temporary periods of closure associated with local or national restrictions, under which the hereditament continues to be classified as occupied for the purposes of business rates.
• Should direct their support towards ratepayers who have been adversely affected by the pandemic and have been unable to adequately adapt to that impact.
• In line with the legal restrictions in section 47(8A) of the Local Government Finance Act 1988, billing authorities may not grant the discount to themselves or to a precepting authority.
• To be eligible for the relief, the applicant must be a ratepayer liable for and occupying the property for which business rates is charged during the financial year 2021/22, for a period of 1 day or more.
• If there is no business rates liability to pay due to the award of full small business rates relief, no further relief will be payable.
• Portsmouth City Council reserve the right to apply further mechanisms to determine eligibility at its discretion.

The Application Process

To apply for CARF the ratepayer will be required to complete an online application form, which can be found through our online form. Please note that paper application forms will not be made available.

For the application to be considered, we may require additional evidence. This is likely to be in the form of accounts/bank statements/management accounts for both the financial year 2021/22 and previous years. Where further information is needed, the applicant will be contacted.

Application Deadlines

There is a set limited budget provided by government for this relief scheme. Once the fund has been fully utilised the CARF scheme will end unless the city council is provided with additional funding by the government.

All applications must be made by 30 September 2022. Any application received after this date will not be accepted. Applications will however be determined in tranches at the end of March 2022, April 2022, May 2022, June 2022 and September 2022.

Subsidy Allowance

All reliefs under the CARF are required to be compliant with the subsidy allowance requirements.

How much relief will be provided to successful applicants

Portsmouth City Council have access to limited funding from government for this scheme, and the award of relief will be determined by business sector in accordance with the funding distribution methodology used to provide funding allocations to billing authorities administering the CARF.

The relief will be awarded as a reduction to the business rates account. Where this creates an overpayment of business rates, and the business rates account becomes in credit, any credit will be refunded.

The following multipliers will be used to calculate the non-domestic rate amounts payable for 2022/23.

• Small business multiplier – 49.9p (0.499)
• Standard multiplier – 51.2p (0.512)
• Standard multiplier – 51.2p (0.512)

The standard multiplier will be used:

• for all occupied property with a rateable value above £51,000
• for all empty property regardless of rateable value
• if the ratepayer is entitled to a mandatory relief

All occupied properties with a rateable value of less than £51,000 will have their bill calculated using the lower multiplier (except those attracting mandatory relief)

2017/18 Revaluation
The Valuation Office Agency, part of HM Revenues and Customs, is responsible for the assessment of a property’s rateable value. This is an assessment of the rent the property would get if it were available to let on the open market at a fixed valuation date. The 2017/18 rating list is effective from 1 April 2017, with rateable values based on a valuation date of 1 April 2015.

Paying your bill
You can choose to pay your non-domestic rate over 12 instalments from April to March. If you do not already do so and would like to, you will need to contact us. If you change to 12 monthly instalments during the year, we will give you the maximum number of instalments remaining in the current financial year. Please note that there is a minimum instalment amount of £50 per month, or one instalment if your bill is £100 or less – if this applies to your bill, payment cannot be made over 12 months.

Transitional Relief
There may be a significant change to a rateable value following a revaluation, so there are transitional arrangements that help to phase in the effect of such changes. As a result, if there is a large increase, or large reduction in the rateable value, the change is restricted. Transitional relief limits the percentage your bill can be increased or decreased each year following a revaluation; transitional relief will apply until the full amount is due. Transitional relief will be calculated automatically, and displayed on your bill.

The transitional relief scheme introduced with the 2017 rating list ended on 31 March 2022, however at the budget on 27 October 2021, the government announced that it would extend the current transitional relief scheme for one year to the end of the current revaluation cycle. The extended scheme will restrict increases in bills to 15% for businesses with small properties (up to and including £20,000 rateable value) and 25% for medium properties (up to and including £100,000 rateable value).

2022/23 Retail, Hospitality and Leisure Relief Scheme
At the Budget on 27 October 2021 the Chancellor announced the introduction of a new business rates relief scheme for retail, hospitality and leisure properties in 2022-23.

The 2022/23 Retail, Hospitality and Leisure Business Rates Relief scheme will provide eligible, occupied, retail, hospitality and leisure properties with a 50% relief, up to a cash cap limit of £110,000 per business (not per property).

Extension to the Supporting Small Businesses Relief Scheme
At the Budget on 27 October 2021 the government also announced that it would extend the current supporting small business scheme for one year to the end of the current revaluation cycle. The Supporting Small Business Relief scheme limits the increase in business rates for a small number of ratepayers. If you are eligible for this relief, you will be notified.

Nursery Discount
The Nursery Discount scheme has ended from 31 March 2022, with no equivalent relief available for the 2022/23 billing year.

Rates are usually paid by the occupier of a business premises, often the owner or leaseholder. If the property is empty, it’s still usually the owner or leaseholder who pays the rates. Rates are collected by Portsmouth City Council.

Payment methods for business rates are identical to payment methods for council tax – you will need the ratepayers reference number displayed on your bill to pay online, by direct debit, over the phone, by internet banking or in person.

Portsmouth City Council is responsible for calculating rates bills and for collecting the rates. We work out business rates bills by multiplying the rateable value of the property by the appropriate multiplier.

Calculate your own business rates using the national government’s online calculator

It is the rate in the pound by which the rateable value is multiplied to produce the annual rate bill for the property. There are two multipliers: standard and small business. The standard multiplier is set at a higher rate. The additional funds raised by the standard multiplier support small business rate relief (see question ‘Do small businesses pay full business rates?’).

The government agency, the Valuation Office, is responsible for setting multipliers according to formulae set by legislation.

Most years the multipliers change in line with inflation and to take account of the cost of small business rate relief. In the year of revaluation (see question ‘What is a revaluation of business rateable values?’) the multipliers are rebased to account for overall changes to total rateable value and to ensure that the revaluation does not raise extra money for Government.

The current multipliers are shown on the front of your bill.

The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date – 1 April 2008 in respect of the 2010 rating list, and 1 April 2015 in respect of the 2017 rating list – on full repairing and Insuring terms.

Rateable values are usually revalued every five years.

Rateable values are generally reassessed every five years so that bills paid by any one ratepayer reflect changes over time in the value of their property relative to others. The current rating list is based on the 2017 revaluation, which set the date as 1 April 2015. The Valuation Office Agency has more information on the last revaluation in 2017.

If the rateable value of your property changes significantly as a result of revaluation, your rates will change gradually because the government limits how much your rates can increase or decrease each year. This is called transitional relief. If you are entitled to transitional relief, it will be shown on the front of your business rates bill.

A property’s rateable value may be changed if:

• any physical changes are made to your property, such as building or demolishing an extension
• the property is in such poor condition that it cannot be economically repaired (in which case a reassessment may decide it should be taken out of the rating list or have its rateable value reduced to zero)
• the ratepayer (and certain others who have an interest in the property) believes the rateable value is wrong

Rateable value appeals are free and will be assessed by the valuation officer, an employee of the Valuation Office Agency. If the ratepayer and the valuation officer do not agree, the matter will be referred to a valuation tribunal.

If you employ an adviser to help you make your appeal, make sure they have the necessary rating knowledge and expertise, as well as appropriate indemnity insurance. Choosing a rating adviser who is a member of the Royal Institution of Chartered Surveyors or the Institute of Revenues Rating and Valuation means they are qualified and regulated by rules of professional conduct designed to protect the public from misconduct.

You are required to continue paying your business rates at their current level while any appeal is in process.

For further information about the grounds on which appeals may be made and the process for doing so, in the first instance please contact the local valuation office.

If you have any difficulty paying your business rates please contact our Business Rates Team at BusinessRatesTeam@portsmouthcc.gov.uk

The Government has put in place regulations to allow for the cancellation of certain backdated business rates liabilities.

If you don’t pay your business rates, we may take further action against you, which could result in a court summons. The actions we take for non-payment of business rates are broadly similar to those for non-payment of council tax.

Visit our “Council tax reminders, summons and court proceedings” page for more details about the further action we may take (use of bailiffs, security for unpaid rates, insolvency or committal) if the amount summoned is not paid in full, with costs.

Business rates on empty properties are known as ‘unoccupied property rates’. They are not payable in the first three months that a property is empty. In the case of certain industrial & warehouse properties this is extended to six months. After this period, rates are payable in full unless the unoccupied property rate has been reduced by the government by order. If your unoccupied property rate for the financial year has been reduced by order,  this will be shown on the front of your bill.

Empty properties owned by charities and community amateur sports clubs are usually exempt from paying unoccupied property rates, and there are a number of other exemptions. Here are some other examples of situations where unoccupied property rates are not payable:

• The rateable value of the empty property is less than £2,900
• The owner is prohibited by law, by action taken by the Crown, or by any other local or public authority from occupying the premises
• Subject to a building preservation notice per Section 58 of the Town & Country Planning Act (1971) or in a list under section 54 of the Act
• The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979
• The owner is entitled to possession only in his capacity as the personal representative of a deceased person If the following insolvency or debt administration situations exists:
• A bankruptcy order in parts 8 to 11 of the Insolvency Act 1986
• The owner is a trustee under a deed of arrangement to which the Deeds of Arrangement Act 1914 applies
• The owner is a company subject to a winding up order made under the Insolvency Act 1986, or is entitled to possession of the property in his capacity as liquidator under section 112 or section 145 of the Insolvency Act 1986.

For more information on business rate exemptions contact our Business Rates Team at BusinessRatesTeam@portsmouthcc.gov.uk

A ratepayer is liable for full business rates whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time, Portsmouth City Council has discretion in certain cases to award relief in respect of the unoccupied part. For more information contact our Business Rates Team at BusinessRatesTeam@portsmouthcc.gov.uk

Small businesses in the Portsmouth City Council area are defined as having rateable values of under £51,000 from 1 April 2017.

Small businesses don’t pay full business rates because their rates are calculated using a reduced multiplier, rather than the standard one (see ‘what is a multiplier?’ above). Also small businesses with a sole or main property with a rateable value under £15,000 qualify for percentage relief on their business rates:

The table summarises the reductions for small businesses:

Follow this link for more information from Gov.uk on small business rate relief (SBRR). If you think you should be receiving small business rate relief, contact us at Business (non-domestic) rates. If you meet the criteria you should automatically continue to receive relief in each new valuation period. Let us know if your circumstances change.

Portsmouth City Council can reduce the payment of business rates in certain circumstances. Each case presented is considered on its own merit. Your case should include the number of people you employ and a business plan showing that an award would greatly assist your ability to continue trading. You should continue to pay your business rates while your case is progressing.

To apply for hardship relief on your business rates, contact our Business Rates Team.

If property is damaged in order to avoid paying rates, the valuation office will be required to disregard the change in the properties state when assessing its rateable value. For instance, if the roof is removed from an empty property for the purpose of avoiding rates, it may be valued as if the roof had not been removed and rates will still be payable.

Charities and registered community amateur sports clubs are entitled to 80% mandatory charity relief on business rates, which means paying no more than 20% per cent rates on any non-domestic property used for charitable or club purposes.

Portsmouth City Council can also grant relief to charities or non-profit making organisations on all or part of the remaining 20% of a business rate bill. This is at the council’s discretion and applies for just one year. To apply complete the ‘Discretionary rate relief application form’ below.

For more information contact us at Business (non-domestic) rates.

A completion notice is a document that specifies the ‘completion date’ for newly built properties. It is the date on which the property becomes a dwelling for Council Tax purposes, and is the date it is entered into the national non-domestic rates list.

The completion notice is issued in accordance with Section 46 Schedule 4A of the Local Government Finance Act 1988 and Section 17 of the Local Government Finance Act 1992.

Where a property is structurally complete, or where the work remaining can reasonably be expected to be completed within 3 months, a completion notice will be served on the ‘owner’ of the property. The ‘owner’ is defined as ‘the person entitled to possession’.

Where work on a property is not yet completed, the completion notice can be served specifying the final completion day of up to three months from the date of service, for the remaining works for completion of the property to be carried out.

To ensure the accuracy of our completion notices, our property inspector will visit and review dwellings that are being built or altered. Evidence, such as photographs can be obtained to enable us make the right decision.

The council will consider a property to have reached a stage of substantial completion when it meets the following criteria:

• The basic structure is complete, for example all external walls and roof in place
• Internal walls are built (although not necessarily plastered)
• Floors laid (although the screed or top coat of concrete need not have been laid)

Many properties will have reached an advanced level of completion where, for example, ceilings are in place, walls have been plastered and second fixing may have commenced.

In these circumstances the amount of time allowed in the notice for full completion of the property may be quite short.

In order to be considered and ready for banding, the following work does not need to have been carried out:

• Internal decoration of the property, including the fitting of internal doors
• Final fitting of bathroom and kitchen units
• Final fitting of electrical fixtures, plug points and switches
• Final connection of water, gas and electricity (although services should be laid out on to the site)

The criteria for determining completion for Council Tax purposes are substantially different to that for determining completion for Building Control; therefore, whether building control certificates have been issued, or not is not directly relevant.

A completion notice may be served up to three months in advance of the day on which the council specifies that a property is complete; therefore, whilst at the date when the notice is sent the property may well not be complete, the important date to bear in mind is the date that the council is specifying as the date of completion.

If the property is complete, the council will serve a completion notice on the owner as soon as is reasonably practicable. A completion notice cannot be backdated, even if the property has been completed for some time.

New properties, whether newly constructed or created by conversion, which are unoccupied and substantially unfurnished will be subject to a full charge when it is brought onto the Council Tax list or non-domestic rating list.

A new or altered dwelling does not require a completion notice once the property becomes occupied.  The date used to enter onto the Council Tax list or non-domestic rating list will be the date of occupation.

A new or altered dwelling does not require a completion notice once the property becomes occupied.  The date used to enter onto the Council Tax list or non-domestic rating list will be the date of occupation.

For further advice please contact BusinessRatesTeam@portsmouthcc.gov.uk

This information is a general guidance and is not a substitute for the relevant statutes and regulations.