Agenda item

To receive a report from the Deputy Chief Executive (S151) Officer and the Head of Finance, Property and Climate Resilience on the Business Rates Tax Base.

The Cabinet had before it a report * from the Deputy Chief Executive (S151) presenting the Business Rate Tax Base.

The Cabinet Member for Governance, Finance and Risk outlined the contents of the report with particular reference to the following:

• Officers were thanked for their diligent work in preparing this report. Their expertise and efforts ensured that work continued to manage business rates effectively, despite the many changes imposed by Central Government over the last few years, business rates had indeed become more and more complex since 2013.
• The business rates and financial implications for this Council. It was important to be absolutely clear from the outset: that this Council did not set business rates in the same way as Council Tax—the calculation of rates was set by the Government.  The Valuation Office Agency calculated the rateable values from which bills were worked out by billing authorities. Whilst this Council administered the collection, the rates themselves along with many relief schemes were entirely outside of the Council’s control.
• The Government had made a number of adjustments to the Business Rates that would, in some cases, materially alter the amount of rates due for businesses. Changes to some reliefs were ‘unfunded’ and others funded by Government via s31, an example of this would be Retail, Hospitality and Leisure Relief.
• The key changes taking effect from April 2025 included:

Ø  A reduction in Retail, Hospitality and Leisure Relief, which would drop from 75% to 40%. This meant businesses in those sectors would see an increase in the amount they were required to pay.

Ø  Private schools would no longer qualify for Charity Relief, following changes to primary legislation.

Ø  The restriction preventing councils from awarding discretionary relief more than six months after the end of the financial year had been removed, giving the Council greater flexibility in decision-making.

• Those changes could have a significant impact on some businesses, and for those that were affected, the Council would be in contact when annual bills were issued in March 2025.

Discussion took place with regards to:

• The local businesses would face a significant impact due to the increases in business rates tax base and the effects of national insurance employer’s contributions.
• Would advice and assistance be available for those that were affected?
• Retail Hospitality and Leisure Relief had been reduced from 75% to 40%.
• Approximately 300 business would be affected in key economic sectors.
• There were concerns about whether some businesses could afford their bills or would have to release some of their staff.
• What support would the Council offer to businesses to pay their bills, would the changes to the discretion relief make any difference?
• What was the collective figure for the sector in the region and what was the overall additional cost within this area?   

RESOLVED that Cabinet recommend to Council that:

1. The calculation of the NNDR1 net yield of £19,854,365 from 3,562 business rated properties be NOTED and APPROVED for 2025/26.
2. The proportions distributed to the respective authorities and Central Government be allocated as per the statutory regulations.
3. Members NOTE that Central Government would reimburse the Council through a Section 31 grant to compensate it for the reduction in collectable business rates as a result of introducing various reliefs.
4. Members AGREE to Mid Devon re-joining the Devon Business Rates Pool for 2025/26.

(Proposed by Cllr J Buczkowski and seconded by Cllr S Clist)

Reason for Decision:

Mid Devon District Council was a Statutory Billing Authority and had a duty to carry out this task each year as part of the budgetary process. It should be noted that due to changes in reliefs, collection of business rates was likely to be challenging in 2025/26.

Note: * Report previously circulated.