Small Business Rate Relief Scheme Announced

... starting in April 2007.

: "The Welsh Assembly Government recognises that small businesses have an essential contribution to make to the life and economy of communities in all parts of Wales," said Finance and Local Government Minister, Sue Essex.; Image by: WAG

October 02, 2006

For the first time ever, small businesses across the whole of Wales will soon be able to benefit from the business rate relief scheme.

The announcement by Finance and Local Government Minister, Sue Essex has been welcomed by Preseli Pembrokeshire Assembly Member Tamsin Dunwoody.

The new small business rate relief scheme will provide around 3,600 businesses across the county of Pembrokeshire with help with their business rates. Around 2,100 businesses in Pembrokeshire receive help under the current scheme.

The Assembly Government proposes to replace the rural rate relief scheme that operates in the predominantly rural areas of Wales with a small business rate relief scheme that will apply across the whole of Wales.

"I believe this step by the Welsh Assembly Government will make it easier for business to play on a level playing field," said Tamsin. "This Labour administration is ensuring that the economy of Pembrokeshire continues to thrive. Unemployment figures for August prove that Labour in Pembrokeshire has slashed the number of people claiming benefit – that is good for the whole of the local economy."

The new scheme, financed wholly by the Welsh Assembly Government, will provide relief to nearly 49,000 businesses across the whole of Wales. This is 28,000 more than the number of businesses currently receiving rate relief.

The new scheme, which will operate from 1st April 2007, gives businesses with a rateable value under £2000 a 50% reduction in their rates, while businesses with a rateable value between £2,000 and £4,999 will receive a 25% reduction.

In addition there will be enhanced relief for Post Offices in all parts of Wales. Post Offices with a rateable value under £9,000 will receive 100% relief, and those with a rateable value between £9,000 and £11,999 will receive 50% relief.

: "I believe this step by the Welsh Assembly Government will make it easier for business to play on a level playing field," said Tamsin Dunwoody AM.

"There has been great pressure on local post offices in recent years," added Tamsin. "Increased competition, progression with technology and changing consumer habits have all taken their toll on the local post office to stay open. I have received many letters and emails on the issue of protecting rural post offices. I believe that this step by the Welsh Assembly Government will assist post offices to continue to remain at the heart of local communities in Pembrokeshire."

Finance Minister, Sue Essex said "The Welsh Assembly Government recognises that small businesses have an essential contribution to make to the life and economy of communities in all parts of Wales. The rural rate relief scheme was extended following the outbreak of Foot and Mouth to help businesses in areas affected by the outbreak. This has been fully implemented and it is now time to extend rate relief to small business in all parts of Wales.

"Help for business with relatively low rateable value helps all parts of Wales but is particularly helpful for the poorest parts of Wales, be they rural or urban. We have also decided that the scheme should also recognize the important role of small post offices. The proposed enhanced provision of rate relief to Post Offices will make a major contribution to the Assembly Government’s objective of keeping Post Offices open in Wales and increasing the sustainability of small communities."

The new scheme is currently under consultation and full details can be found in the Consultations section of the Welsh Assembly Government website..

1. For full details of the proposed scheme go to http://new.wales.gov.uk/consultations. All comments should be sent to LGF1consultations@wales.gsi.gov.uk. The closing date for responses is Friday 27 October 2006.

2. Summary of the proposed Small Business Rate Relief Scheme
All eligible businesses in Wales* with a rateable value of under £2k will receive an automatic 50% discount off their rates, and businesses with a rateable value between £2k and £4,999 will receive a 25% discount.
Post offices with a rateable value of less than £9k will be exempted from paying business rates and post offices with a rateable value between £9k and £11,999k will receive 50% relief.

It will replace the rural rate relief scheme, be entirely funded by the Assembly, and will be automatically applied to rates bills without businesses needing to apply.

* Businesses not eligible to benefit from this scheme include those entitled to other types of mandatory relief, advertising rights (e.g. billboards), beach huts, communication stations (these include mobile phone masts), car parks and car spaces and sewage works.

In addition to the small business rate relief scheme, many other types of relief will remain available and not be affected by the new scheme. These include charitable occupations, community amateur sports clubs, and non-profit making organisations.

3. Summary of the existing Rural Rate Relief Scheme
The Rural Rate Relief Scheme was introduced in 1998. It was available to the sole post office or general store in a qualifying rural settlement with a Rateable Value of £5,000 or less. Those eligible automatically qualified for 50% mandatory relief, which local authorities could then top up with a further 50% discretionary relief. Whilst not eligible for mandatory relief, discretionary relief was also available to businesses with a rateable value up to £10,000. To qualify for relief the shop or post office must be the sole shop in a community.

In April 2002, the Assembly extended the scope of the scheme:

The Non Domestic Rating (Rural Rate Relief) (Wales) Order 2002 increased the rateable value thresholds for 50% mandatory relief for sole post offices or general stores from £5,000 to £6,000, with Councils having discretion to top-up the mandatory relief up to 100%.
Councils were given discretion to grant relief to any other rural business with a rateable value of less than £12,000 if it provides a vital service to the local community.
The scheme was extended to apply to rural pubs and petrol stations with a RV of £9,000 or less so that they qualify for an automatic 50% mandatory relief.
RV thresholds increased for discretionary relief to businesses that supply a vital role to the community to £12,000 at a level up to 100%.
The Assembly Government meets 100% of mandatory relief and 90% of discretionary relief from the non-domestic rating pool. The remainder is met by local councils which they raise locally from the council tax.

Print Article Email Article