Rating Policy - Recent developments

Welfare Reform: Rate Rebate Replacement Arrangements - Preliminary Consultation Paper

The Northern Ireland Executive has agreed to the publication of a paper to begin a preliminary consultation on changes to rates support for low income households. These changes have to be made as a result of the UK wide programme of Welfare Reform.

The introduction of Universal Credit in April 2014 will mean that modifications will have to be made to existing rates support for low income households because many of the current mechanisms for deciding entitlement will start to disappear for working age claimants.

The preliminary consultation paper sets out the background to the change along with options for an interim scheme.

The consultation period closed on the 10 April 2013.

A copy of the factual consultation report outlining responses received can be accessed here.

During the consultation period the Institute of Fiscal Studies also published a report entitled "Universal Credit in Northern Ireland: what will its impact be, and what are the challenges?" Chapter 4 of that report covered the issues relevant to the preliminary consultation, relating to the designing of a rate rebate scheme to work alongside Universal Credit. The report can be accessed here:-

Review of Rates Liability for the Landlord Sector Consultation Paper

The Department of Finance and Personnel has agreed to the publication of a paper to begin a consultation on changes to rates liability in the landlord sector.
No decisions have been made yet but the scope of the changes being considered by the Department involves the following:-

•That all rented property with a capital value of £150,000 or under will be subject to compulsory landlord liability;
•The removal of the criteria for rent to be payable or collected at intervals shorter than quarterly;
•The landlord allowance to be standardised at 10% across the all rental sectors; and
•The award of the allowance will occur regardless of whether the property is occupied or vacant.

The Department has now produced the attached consultation paper setting out the proposed changes.

The consultation will run for a 12 week period.  Comments should be provided by 28 June 2013.  Written responses should be sent to:

Department of Finance and Personnel,
Rating Policy Division,
3^rd Floor Longbridge House,
20-24 Waring Street, Belfast BT1 2EB

E-mail responses may also be sent to: ratingpolicy.cfg@dfpni.gov.uk or faxed to 028 9034 7435

Hard copies can also be provided upon request by calling 028 9127 7606

Ministerial Statement on Non-Domestic Rating - extending support to business through the rating system

In a statement to the Assembly on 26 November, the Finance Minister Sammy Wilson announced a number of measures, extending existing policies, to help businesses through the non domestic rating system.

A copy of the Ministers statement can be found here.

2015 Non-Domestic Revaluation

On 5 April 2012 the Northern Ireland Executive agreed that preparations should be put in place to undertake a revaluation of non-domestic properties in Northern Ireland, to come into effect in 2015.  Work is already underway and will take over two years to complete.  Further information on the revaluation can be found here.

Latest news

The Department of Communities and Local Government in England recently announced the postponement until 2017 of the Revaluation in England on the grounds of giving businesses certainty over the next few years to concentrate on delivering growth.

The circumstances in England are different to those in Northern Ireland.

The rest of the UK had a Revaluation in 2010 but NI has not undertaken one since 2003. There is no technical reason why NI cannot proceed alone, as it has done in the past. Furthermore, the  local business community has been urging the Department to carry out a Revaluation as soon as possible, to update the values and redistribute the rating burden.

On 26 November the Finance Minister stated it was his intention that the Non Domestic Revaluation will go ahead in Northern Ireland in 2015.

Background

Business rates are a long established local property tax levied on all non-domestic ratepayers, proportionate to the individual rental value of each property. It is necessary, therefore, to revalue periodically the entire stock of non-domestic property.

There are around 72,500 non-domestic properties in Northern Ireland. Non-domestic rates currently contribute around £550 million a year towards regional services (roads, hospitals, schools, etc.) and local services provided by District Councils.

Those areas and business sectors that have fared better than others over the period since the last Revaluation will face higher rate bills from April 2015, despite the fact that values have declined across the board since the downturn.

Business premises that have experienced rental value decreases more than the average will pay less following a revaluation and vice versa.

Many will find their rate bills not changing much. The last time a general revaluation took place in 2003 almost three quarters of business ratepayers’ rates bill went up or down by less than 20%.

Land & Property Services has already begun the work to assemble the evidence and begin the process of revaluing non-domestic properties in Northern Ireland.

Revaluations are a regular feature of all business rates systems, and make sure that liability for rates is fairly spread across all sectors in line with up to date rental values.

In year review of the Small Business Rate Relief scheme

The Finance Minister, Sammy Wilson, has announced an in year review of the Small Business Rate Relief scheme, which was extended in April 2012.  This is not a full policy evaluation, however the Department is seeking comments from business ratepayers and interested parties on how well the scheme is operating.

The Department is particularly interested in the operation of the multiple properties exclusion and the merits of retaining double relief for business ratepayers who are also entitled to other support, such as derating (industrial, freight transport and sport and recreation relief). Wider views on the benefits and limitations of the scheme are most welcome, bearing in mind that the Department is only considering refinements to the scheme for its remaining life (up to 31 March 2015).  

The terms of reference for the review can be found here.

Responses received from the review which closed on 5th October can be found here.

Minister Announces 2015 Non-Domestic Revaluation

On 5 April 2012 the Northern Ireland Executive agreed that preparations should be put in place to undertake a revaluation of non-domestic properties in Northern Ireland in 2015, aligning with the rest of the UK. Revaluations of non-domestic property are also scheduled to take place in England, Scotland, and Wales in 2015.

Business rates are a long established local property tax levied on all non-domestic ratepayers, proportionate to the individual rental value of each property.  It is necessary, therefore, to revalue periodically the entire stock of non-domestic property.

There are around 72,500 non-domestic properties in Northern Ireland. Non-domestic rates currently contribute around £550 million a year towards regional services (roads, hospitals, schools, etc.) and local services provided by District Councils.

Those areas and business sectors that have fared better than others over the period since the last Revaluation will face higher rate bills from April 2015, despite the fact that values have declined across the board since the downturn.

Business premises that have experienced rental value decreases more than the average will pay less following a revaluation and vice versa.

Many will find their rate bills not changing much.  The last time a general revaluation took place in 2003 almost three quarters of business ratepayers’ rates bill went up or down by less than 20%.

Land & Property Services will shortly begin the work to assemble the evidence and begin the process of revaluing non-domestic properties in Northern Ireland

Revaluations are a regular feature of the business rates system, and make sure that liability for rates is fairly spread across all sectors in line with up to date rental values