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Rating Policy - Recent developments

Regional Rates

10 March 2015 - The Assembly has approved the 2015/16 Regional Rates Order brought forward by the Finance Minister. This Order sets the domestic and non-domestic regional rates for the forthcoming financial year and is an outworking of the 2015/16 Budget settlement, announced in January.

The domestic regional rate is frozen in real terms by increasing it only for inflation by 1.4%. The new non-domestic regional rate is also adjusted for inflation but is set lower than the current rate to reflect the change in values following the revaluation of non-domestic properties in Northern Ireland.

From 1 April 2015 the domestic regional rates, expressed in terms of ‘pence per pound of rateable value’, will be 0.4042 pence and the non-domestic regional rate will be 31.86 pence. Taken together, the domestic and commercial regional rates are forecast as part of the Budget to raise in the region of £650million in the forthcoming financial year.

Long Term Options for DFP Domestic Rate Rebate Scheme

11 March 2015 - A consultation report (pdf 50kb) and the individual responses received are now published. The next stage will be the Department engaging with the Committee of Finance and Personnel before policy recommendations are put to Ministers.

24 November 2014 - The Department of Finance and Personnel has published a further consultation paper (pdf:426kb) on options for a rate rebate replacement scheme. This is the third in a series of consultations. The previous two consultations were undertaken to inform how an interim rate rebate replacement scheme could be quickly developed to accommodate the early introduction of Universal Credit.

It had been envisaged that Universal Credit would be introduced in Northern Ireland during 2014 or 2015; however, due to delays nationally, it is now expected to roll out during 2016 at the earliest. The previous consultations considered modifications to the current rate rebate rules that operate under housing benefit so that Universal Credit claimants would not be disadvantaged. .

The new timetable for Universal Credit means that it should be possible to go directly to a long term solution for assessing entitlement to rate rebate; one which continues to help those most in need, promotes the universal credit principle of making work pay, is more efficient and

provides value for money. The work completed on the previous two consultations on an interim scheme has helped inform the options for a long term rate rebate scheme.

The purpose of this consultation is to seek views on proposed options for a long term rate rebate scheme together with illustrative impact assessments and modelling. It also seeks views on a new approach to some of the other entitlement conditions and for streamlined administrative processes.

The consultation will run for 12 weeks from 24 November 2014 to 16 February 2015.

District Rate Convergence Scheme - Publication of Subsidies

28 Janauary 2015 - The Department of Finance and Personnel has now published details of the subsidy for ratepayers who were facing increased rate bills because of the amalgamation of council areas and redrawing of boundaries.

The discount will be automatically applied to rate bills and no action is needed from ratepayers who are eligible for the subsidy. It will address only the increase in rate bills which is a direct result of the creation of the new larger councils.

The scheme will provide an 80% subsidy next year to reduce the district rate element of the bill in those areas that would have increased as a result of the convergence of council areas - in other words, the regrouping of ratepayers within the new structure. This subsidy will be phased out in stages over the next four years. It will have no direct bearing on the financing of the new councils who will still act independently next month in setting the district rates to cover their spending plans for next year.

Evaluation of the Small Business Rate Relief Scheme

This evaluation was undertaken by the Northern Ireland Centre for Economic Policy (NICEP) at the University of Ulster, informed by a public consultation between April and July 2014. A consultation paper,  the responses to the consultation and a factual consultation report (pdf: 51kb) have been published

4 December 2014: NICEP has completed the evaluation and their full evaluation report (pdf: 3.58mb) has now been published.

The Executive's draft Budget proposals makes provision of £20m for continuation of the scheme next financial year. A final decision will be made following the public consultation.

Details of the District Rates Convergence Scheme Published

20 November 2014 - The Finance Minister Simon Hamilton MLA has now decided upon the final details of the scheme to help manage the issue of rates convergence. The scheme will come into effect on 1 April 2015 to coincide with the creation of the new larger councils

The scheme is an outworking of the Executive’s decision to provide up to £30 million of support for the effects of District Rate Convergence on ratepayers (i.e. the result of district councils coming together or boundary changes). The subsidy will be applied automatically by LPS and therefore ratepayers do not need to claim this support.

It will see the effects of rates convergence phased in over the full council term with an 80% subsidy applied next year (2015/16). This will remove 80% of the amount which has been identified as the “convergence” effect. That support will then be gradually phased out over the 4 year term and will be applied at increments of 60%, 40%, and 20% over the remaining years of the scheme. There will be no threshold applied to the scheme and the only exclusions applied will be in respect of public sector bodies and those properties which are already converged through social sector standardisation.

This serves to effectively neutralise any sudden and significant increases as a result of the specific effects of district rate convergence. This will not interfere with the District Rates that are set independently by the new Councils next year, as these decisions are based on a range of other factors under the control of local government and outside the scope of this ratepayer support scheme. Councils, therefore, have an equally important part to play in managing their finances and acting responsibly when striking their District Rates over the course of the scheme.

The support scheme will also avoid any ‘netting off’ due to the non-domestic revaluation. It will operate by discounting the District Rate to the same extent in each of the affected areas and therefore those business ratepayers who stand to benefit from the revaluation will get their full entitlement from next April.

The model selected for the final scheme was the one broadly supported during the consultation exercise and the funding available has been utilised so as to reflect that preference, particularly given the unprecedented pressure on public finances over the next few years.

The estimated cost does, however, comes very close to the maximum funding of £30m made available by the Executive.  As a result the Department will be monitoring actual spend carefully for the mid-term review which is planned in advance of the 2017/18 rating year, to establish if any adjustment to the scheme will be required in the latter years. The Department is already required to do this under statute in line with the provisions of the Local Government Finance Act (Northern Ireland) 2014.

The next stage is the calculation of the various District Rate Discounts that will be applied to rate bills in each of the affected areas over the life of the scheme, to implement the above policy. These will be published on this website in the coming weeks.

De-Rating of Commercial Window Displays

This concerns a relatively minor policy proposal being considered by DFP and currently subject to a targeted consultation over the coming weeks. It would involve a concession being made so that window space in empty shops can be used for the display of goods without incurring a full occupied rate.

A short policy paper (pdf: 80kb) has been circulated around interested parties seeking views. This supplements a wider consultation undertaken by DFP in 2012, to inform the current policy which disregards the non-commercial use of window displays in empty shops in assessing liability for rates.

Non Domestic Rates Revaluation 2015 – publication of draft values

13th November 2014 - Land & Property Services (LPS) has completed the revaluation of all non-domestic properties in Northern Ireland for rates purposes. A Schedule of Draft Rateable Values is now available to view. These values will be used to assess rate bills from April 2015 onwards.

Currently non domestic (business) rate bills are based on 2001 rental values. From April 2015 they will be based on 2013 rental values. This will rebalance business rates because the proportion of the rate burden (what each ratepayer pays) will be shared out relative to the 2013 rental value of their property. The new values are informed by rents and trading information provided by ratepayers.

Further details of the Revaluationa and the schedule of draft values can be accessed on the Reval 2015 NI website.

Public Consultation on Review of Public Administration - Managing Convergence of District Rates

In May 2014 the Department of Finance and Personnel launched a public consultation on the details of the Transitional Rate Relief Scheme to manage rates convergence as a result of local government reorganisation. The purpose of the scheme is to help ratepayers who would otherwise face sudden increases in District Rates.

The consultation document* sought views on the following:

  • The eligibility criteria for the scheme;
  • The duration of the scheme;
  • The level of relief to be provided each year.

In response to early feedback from Local Government Officials, a technical annex was also produced with tables showing more analysis on the phasing in options. These tables provided a more detailed breakdown of the high level figure work presented in the consultation paper.

The consultation closed on Tuesday 19th August 2014.

A consultation report and details of the responses received have now been published by the Department.