The IRRV welcome Business Rates Review by Treasury
THe IRRV has welcome the discussion paper launched by the Treasury on 16th March 2015
Administration of Business Rates in England: Interim Findings
At Autumn Statement 2013, the government announced it would open up a discussion with businesses and local authorities about long-term administrative reform to business rates in England after 2017. This paper summarises the government’s interim findings on the administrative reform of business rates and sets out how the government proposes to respond to businesses’ calls for clearer billing, better sharing of information and a more efficient appeals system. The Institute responded to this interim findings document.
LINK to original consultation paper:
Business rates avoidance
The government is committed to dealing with avoidance in the tax system. At Autumn Statement 2014, the government announced it would open up a discussion to:
- better understand the type and scale of business rates avoidance in England
- find ways to tackle business rates avoidance so that all ratepayers pay the business rates that they should pay
This document built on the work undertaken by the government’s anti-avoidance working group and requested responses from interested parties to further inform the government as to the types and scale of avoidance, as well as ideas around potential solutions. The IRRV responded to this consultation paper.
LINK to original consultation document: https://www.gov.uk/government/consultations/business-rates-avoidance-discussion-paper
Council Tax and business rates: powers of entry
Following its review of the powers of entry the DCLG identified two powers operated by the Valuation Office Agency which it proposed to amend. These powers of entry are operated by the Valuation Office Agency’s listing officers and valuation officers as part of their duty to assess domestic and non-domestic properties for banding purposes and rateable values respectively. The IRRV responded to this consultation.
LINK to original document: http://www.irrv.net/documents/Consultations/IRRV Response BRates Avoidance 280215.pdf
Scottish NDR Valuation Appeals System
On 27 November 2012, the Scottish Government published its consultation, Supporting Business – Promoting Growth, on reforms to the business rates system. An independent analysis of all responses was published on 4 September 2013, along with the Scottish Government response.
The analysis found that many respondents felt the appeals system was cumbersome, time-consuming and costly for ratepayers, who often have limited understanding of the system and need to pay professional advisors to assist with an appeal.
As a result of these comments, one action was that the Scottish Government would undertake a separate review of the valuation appeal system, beginning in 2014. This paper initiates that process, continuing the wider review of the Scottish business rates system ahead of the 2017 revaluation.
The Scottish Association of the Institute responded to this consultation paper.
Institute raises concerns regarding guidance in HB Circular U6/2014.
Senior Vice-President Jim McCafferty has written to Welfare Reform Minister Lord Freud concerning the wording of HB Circular U6/2014. Lord Freud’s reply accepts the point made by Mr McCafferty that It is over- simplistic to assume a link between rent set and the number of bedrooms; and that even in such cases where there is such a link the HB Decision Maker simply does not have the power to compel a change in rent. The Minister undertook to issue guidance to clarify this position.
Consultation: Community Amateur Sports Clubs:
Consultation Launched: 3rd June 2013
Consultation Closes: 12th August 2013
- This 44-page consultation from HMRC lays out proposals to amend the qualifying conditions and allow clearer, more detailed, rules to be specified in secondary legislation following a public consultation.
- The full consultation document can be found at:
- Chapter 4 sets out what is meant by the qualifying condition that a club must be ‘open to the whole community’. It focuses on the cost of membership and participation. The consultation seeks views on the maximum amount that a club can charge for membership and participation and qualify as a CASC. It proposes a maximum amount of up to £1,040 a year (£20 a week). This amount would include all the costs to a member for them to be able to participate in the sport.
- Chapter 4 also suggests how clubs that have to charge fees above the maximum amount might still be eligible for CASC status. Clubs would have to make appropriate arrangements to ensure those on low and modest incomes can fully participate. For example, a club could charge reduced rates for members on a low or modest income.
- Chapter 5 sets out the changes proposed to the qualifying condition that a club must be ‘organised on an amateur basis’. The consultation document proposes that a club can pay one player to play and that they can pay such a player a maximum of £5,000 a year.
- Chapter 5 also explores options for improving the current rules on expenses. Proposals include allowing clubs to pay players overnight subsistence costs such as hotels and evening meals in addition to travelling expenses. Chapter 5 also seeks views on the conditions that would need to be met if a club pays the expenses of playing members when they go on tour.
- Chapter 6 proposes definitions of a social member and a guest for the purposes of the scheme. The chapter also seeks views on the percentage of social members a club should be able to have at any one time and still be considered a sports club.
- Chapter 7 seeks views on the detailed rules to apply to a new qualifying condition on income. The purpose of this condition is to specify how much social and other non-sporting income a club should be able to raise and still remain within the scheme. This chapter sets out four possible options.
- Option 1 – Members income test. There would be no limit on any income from members. However there would be a limit on turnover from non-members of 20% as a percentage of total incomings of the club, capped at £25,000.
- Option 2 – Basic income test. This is a simple test that would limit only non-sporting turnover of a club. The proposed limit for non-sporting income is 30% of the total turnover, capped at £100,000.
- Option 3 – Different limits for different streams of income. This option would limit the turnover from various income streams such as the supply of food and drink (30%) and hiring of facilities (20%).
- Option 4 – Days open test. This option would not limit the amount of income that is generated on the days sport was taking place. In addition the club could open on non-sporting days for a certain number of days through the year.
- The Government is seeking views on the details of these options and any views on alternative suggestions.
- Chapter 8 sets out the changes the Government is proposing to help certain clubs retain their CASC status where they have high levels of social income. One of those options would be to extend corporate Gift Aid, which currently applies only to donations to charities. Trading subsidiaries of CASCs would be able to pay little or no tax on their profits by donating their profits to their parent CASC.
- Chapter 8 also proposes to increase the Corporation Tax exemption limits for CASCs on trading income and rental income from £30,000 and £20,000 to £40,000 and £25,000 respectively.
- The Government also welcomes other suggestions for improving the qualifying conditions for CASCs.
Welsh Government Consultation - Business Rate Relief for Charities, Social Enterprises and Credit Unions – Recommendations from an independent report to the Welsh Government
Consultation launched: 23 April 2013
Consultation closes: 19 June 2013
In October 2012, the Welsh Government responded to the recommendations of the Business Rates Review Wales, an independent report from the Business Rates Task and Finish Group. Recommendation 15 proposed consultation with the charitable and retail sectors to review the business rates reliefs that are available to charities and social enterprises. The Minister for Economy, Science and Transport asked the Task and Finish Group to undertake this consultation and prepare specific recommendations on this issue. The IRRV provided written and oral response to this process.
Their independent report has now been published and makes ten recommendations as well as further issues for consultation.
The Welsh Government seeks views on these recommendations. These responses will inform any further action that is taken. This consultation will run for eight weeks and builds on the engagement already undertaken by the Task and Finish and the previous call for evidence.
Summary of Recommendations:
Recommendation 1 - Use Planning Class
It is not recommended that a new Use Planning Class be introduced at this stage, but further consideration should be given to enabling the aims of such a change to be realised.
Recommendation 2 - Zoning
Any approach that is adopted to zone or limit the number of charity shops in a given area should be done at a devolved level of responsibility; this should be a matter for local authorities.
Recommendation 3 - Business Improvement Districts
Charity shops and their representative associations should be encouraged to fully participate as members of local organisations such as BID schemes that aim to rejuvenate and develop high streets in our towns and city centres.
Recommendation 4 - Bringing Long-Term Empty Property into Use
Any business which takes up new occupation of a property which has been vacant for 12 months or more would enjoy rate relief of 50% for the FIRST year of occupation.
Recommendation 5 - Bringing Long-Term Empty Property into Use
A business occupying a RETAIL property in a town centre that has been vacant for 12 months or more would enjoy 50% rate relief for TWO years. In addition, social enterprises may apply to have this 50% rate relief extended beyond two years at the discretion of the local authority.
Recommendation 6 - Tax Avoidance
The government should consider the following measure to tackle tax avoidance: all commercial premises that are occupied and used for charitable purposes could be subject to an upper RV limit of, say, £36K.
Recommendation 7 - Diversity on the High Street
New thresholds for charity shop rate relief should be created that will limit the amount of relief available for charity shops occupying premises of higher Rateable Value. These changes should be phased in for existing charity shops.
Recommendation 8 - Rateable Value Thresholds
The RV thresholds set out above should be reviewed at the time of the 2017 Rating List and subsequent Rating Lists. The threshold RVs may then rise or fall according to the tone of the List.
Recommendation 9 - Future Rating List
When the next Rating List for 2022 is introduced, consideration be given to reducing the mandatory 80% charitable relief to 50% for all charity shops and that as much as possible of charitable reliefs should be left to the discretion of the local authorities.
Recommendation 10 - Monitoring of New Goods Sales
To further address the issue of unfair competition on the high street, the amount of new goods being sold by charity shops be more effectivelymonitored by charitable organisations themselves (e.g. the CRA) - particularly in the run up to the Christmas period.
The implementation of welfare reform by local authorities
The House of Commons Communities and Local Government Committee announced in October 2012 that it was conducting an Inquiry into the implementation of welfare reform by local authorities.
The Committee invited submissions from interested parties covering the progress made to date on the implementation of welfare reform by local authorities. Those making submissions were asked to consider the following issues, though the list was not exhaustive and respondents could select which issues they wished to cover.
- How effectively are the Department for Work and Pensions and the Department for Communities and Local Government working together to implement Welfare Reform?
- Is the guidance available to local authorities from central government on implementing welfare reform adequate? Are there areas where more or better guidance is required?
- Is the Government’s timetable for implementing Welfare Reform achievable?
- Are local authorities being allocated sufficient resources to deliver services such as localised Council Tax Support and advice to claimants on Universal Credit?
- Are there financial risks to local authorities from Welfare Reform changes? Are such risks being adequately addressed?
- What impact have Welfare to Work schemes had, or are likely to have, on the numbers of benefit claimants?
- What evidence is there that local authorities are able to use effectively existing services or contracts for the delivery of new local Social Fund schemes?
- How will the separation of the administration of Council Tax Benefit and Housing Benefit affect claimants?
- How significant an issue is housing benefit fraud under the proposed new system and what measures are being taken to address it?
- Are there sufficient safeguards to protect social landlords from financial harm resulting from the payment of housing benefit direct to claimants?
The Institute submitted its evidence by the 14th December 2012 deadline.
Transforming bailiff action
This Ministry of Justice consultation paper sets out proposals for transforming bailiff action and providing more protection against aggressive bailiffs. The aim of the proposals is to simplify and clarify the process, improve the accountability of enforcement agents and address unnecessary or inappropriate enforcement activity. Deadline for responses: 14th May 2012.
Costs in Tribunals:Report by the Costs Review Group to the Senior President of Tribunals
Joint Response by: the Royal Institution of Chartered Surveyors; the Institute of Revenues, Rating and Valuation, and the Rating Surveyors’ Association
A joint response to the ‘Costs in Tribunals’ Report, submitted by the Royal Institution of Chartered Surveyors; the Institute of Revenues, Rating and Valuation; and the Rating Surveyors’ Association.
IRRV Evidence: Welsh Government Business Rates Policy Review
Call for evidence: Business Rate Policy Review
"We want your evidence and views on options for how the business rate
regime and related rate relief schemes can be modified to better encourage
economic development."Welsh Government
Start of consultation: 05/12/2011
End of consultation: 27/01/2012