Welcome to your guide.

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

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, £35,750. 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 49.9p and over £51,000 the higher multiplier of 51.2p. 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.

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 01/04/20 multiplied by the small business rates (SBR) multiplier of 49.9p.

The next step is to work out what your rates bill was for 2020/2021, less any supplement if applied and after transitional relief has been deducted. If you had a change in rateable value in 2020/2021, or moved in part way through the year, you will need to work this out base on the daily rate you were paying on 31/3/21 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 0.0%. 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 0.0% inflation, or 1.2 x 1.000 = 1.2. Multiplying your base liability BL by this AF gives the maximum amount you have to pay for 2021/22, 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

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 49.9p.

The next step is to work out what your rates bill was for 2020/2021, less any supplement if applied and after transitional relief has been deducted. If you had a change in rateable value in 2020/2021, or moved in part way through the year, you will need to work this out base on the daily rate you were paying on 31/3/21 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 0.0%. You’ll see this part called the (AF) or appropriate fraction. So for businesses in 2020/21 of an RV less than £28,000 the AF is a reduction of 35% x 0.0% inflation. Multiplying your base liability BL by this AF gives the new bill you have to pay for 2020/21, 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.

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 £9,000, therefore they would receive full Small Business Rates relief and have a £0.00 charge

Charity relief and exemptions. These remain unchanged. Whatever your bill is after transitional relief, if you received charity relief in the previous year, then this will apply at the same 80% rate in 2021/22. Similarly, some empty properties receive exemption, the rules for which are also unchanged.

Business rate suppliments

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) - 2021/22

Budget changes

Retail Discount

For 2020/21, the Government announced an increase in the level of the retail discount from a one-third to 100% for eligible retail businesses. This scheme will run for one more year from April 2020. This discount will be applied to the bill after the application of any reliefs, excluding any local discounts.

For eligibility criteria, please review the Government Guidelines.

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.