Correspondence

6/2023: Publication of Business Rates Relief information

Published 15 December 2023

Applies to England

To: Chief Finance Officers of English Billing Authorities - For the attention of the Business Rates section

From: Non-Domestic Rates Team, LGF - Local Taxation, Department for Levelling Up, Housing and Communities (ndr@levellingup.gov.uk)

Date: 15 December 2023

Business Rates Information Letter (6/2023): Publication of Business Rates Relief information

This is the sixth business rates information letter to be issued by the Department for Levelling Up, Housing and Communities this year. 

See previous letters and archived letters.

Improvement Relief Draft Regulations: Summary of responses and government response

1. Section 1 of the Non-Domestic Rating Act 2023 created a new mandatory relief to support businesses making improvements to properties they occupy. From 1 April 2024, businesses that have made qualifying improvements may benefit from 100% relief from higher bills for 12 months. The scheme will run until 1 April 2029.

2. Draft Regulations setting out detailed proposals for the relief were consulted on between June and August 2023. The government has now made the final improvement relief regulations and published the government response to the consultation. Links to these documents can be found at the end of this section.

3. Much of the regulations is concerned with the meaning of qualifying improvement works, when and how certificates should be issued and the value to be certified – all of which are the responsibility of the VOA. Alongside the regulations (at the same link) is an Explanatory Memorandum which includes further information about qualifying improvement works.

4. The VOA is already working with local government on the systems and processes necessary to deliver improvement relief and will prepare guidance to local authorities and ratepayers.

The conditions for the relief (regulation 3)

5. Billing Authorities are responsible for checking whether the conditions for the relief are met. The conditions for the relief to apply are that:

a. a certificate has been issued by the VOA and that it has not been withdrawn or ceased to have effect, and

b. the same person has been the occupier on each day since the day the qualifying improvement works commenced.

6. In considering this test the regulations allow the billing authority to “lift the corporate veil” such that, for example, changes in occupation between subsidiaries of the same group would not in itself invalidate a claim for improvement relief. The regulations also provide that the conditions of continuous occupation by the same person apply to predecessor hereditaments in a case where there has been a split or merger since the works commenced.

7. As a result of these conditions, a hereditament which falls vacant will lose any entitlement to improvement relief, and that entitlement cannot be restored in respect of the same works if subsequently reoccupied – even if by the same person.

Applying improvement relief within the transitional relief scheme

8. The 2023 Act provides that improvement relief is applied at the level of gross rates through a deduction (“G”) to the rateable value shown in the rating list. The new schedule for calculating the chargeable amount for local list occupied properties (Schedule 4ZA) therefore provides that bills are based on the value “A” being either:

a. the rateable value shown in the list, or

b. where improvement relief applies, the rateable value shown in the list less G. The regulations (at regulation 6) provide that G is the value certified by the VOA in the improvement relief certificate.

9. The regulations also include a consequential amendment to transitional relief regulations (at regulation 8) to ensure that the same principle from the Schedule is followed through into bills found under the transitional relief rules. The amendment provides that, where appropriate, references in the transitional relief regulations to the rateable value shown in the list should be taken to be a reference to the value “A” adopting the same meaning of A as in Schedule 4ZA.

10. For more information, please see the below link:

Summary of responses and government response

Publication of guidance for the Retail, Hospitality and Leisure relief 2023/24

1. At Autumn Statement 2023, the Chancellor extended the business rates relief scheme for retail, hospitality, and leisure properties, worth an estimated £2.4 billion into 2024-25.

2. The government has published guidance setting out the eligibility criteria for the scheme. The RHL relief scheme guidance provides local authorities with information about the intended operation and delivery of the policy. The government anticipates that local authorities will include details of the relief to be provided to eligible ratepayers for 2024/25 in their bills for the beginning of the 2024/25 billing cycle. This guidance can be found at the link at the end of this section.

3. The 2024/25 Retail, Hospitality and Leisure (RHL) relief scheme will provide eligible, occupied, retail, hospitality, and leisure properties with 75% relief. The total value of relief available per business, whether occupying one or more properties, is capped at £110,000. Any ratepayer who would be eligible for a sum of relief above £110,000 if there were no cap in place, should be awarded relief up to the full value of £110,000 (as has been the policy for previous years).

4. For more information, please see the below link:

Business Rates Relief: 2024/25 Retail, Hospitality and Leisure Scheme