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National Non-Domestic Rates Explanatory Notes

National Non-Domestic Rates Explanatory Notes for the current financial year, 2022 to 2023.


National Non-Domestic Rates

National Non-Domestic Rates (NNDR), or business rates, collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services.

Under the business rates retention arrangements introduced from 1 April 2013, authorities keep a proportion of the business rates paid locally. The money, together with revenue from council taxpayers, locally generated income and grants from central government, is used to pay for the services provided by local authorities in your area.

See further information about NNDR:

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NNDR instalments

Payment of business rate bills is automatically set on a 10-monthly cycle.

The government has put in place regulations that allow ratepayers to require their local authority to enable payments to be made through 12 monthly instalments. If you wish to take up this offer, you should contact the Business Rates Team as soon as possible.

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NNDR rating multiplier

The local authority works out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier.

There are 2 multipliers:

  • the national non-domestic rating multiplier
  • the small business non-domestic rating multiplier

The government sets the multipliers for each financial year, except in the City of London where special arrangements apply.

Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to certain other mandatory reliefs or are liable for unoccupied property rates) will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.

The multiplier for a financial year is based on the previous year’s multiplier adjusted to reflect the Consumer Price Index (CPI) inflation figure for the September prior to the billing year.

The current multipliers are shown on the front of your bill.

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Rateable Value

Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs. They compile and maintain a full list of all rateable values, available on the VOA website.

The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date specified in legislation. For the current rating list, this date was set as 1 April 2015.

The VOA may alter the valuation if circumstances change. The ratepayer (and certain others who have an interest in the property) can also check and challenge the valuation shown in the list if they believe it is wrong.

Further information about the grounds on which challenges may be made and the process for doing so can be found on the VOA website:

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Revaluations

At revaluation, the Valuation Office Agency (VOA) adjusts the rateable value of business properties to reflect changes in the property market.

The most recent revaluation came into effect in England and Wales on 1 April 2017, based on rateable values from 1 April 2015.

The next revaluation will come into effect on 1 April 2023, based on rateable values from 1 April 2021.

You can find your business rates valuation online and you can see a full list of all rateable values on the VOA website.

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Business Rate Reliefs

Depending on individual circumstances, a ratepayer may be eligible for a rate relief (a reduction in your business rates bill).

There are a range of available reliefs. Some of the permanent reliefs are set out below but temporary reliefs are often introduced by the Government at Budgets.

You should contact your local authority for details on the latest availability of business rates reliefs and advice on whether you may qualify.

See further detail on NNDR reliefs:

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Small Business Rates Relief

If a ratepayer’s sole or main property has a rateable value which does not exceed an amount set out in regulations, the ratepayer may receive a percentage reduction in their rates bill for this property of up to a maximum of 100%.

The level of reduction will depend on the rateable value of the property. For example eligible properties below a specified lower threshold will receive 100% relief, and you may receive partial tapered relief up to a specified upper threshold. The relevant thresholds for relief are set out in regulations and can be obtained from the business rates information on GOV.UK.

Generally, this percentage reduction (relief) is only available to ratepayers who occupy either:

  • (a) 1 property, or
  • (b) 1 main property and other additional properties providing those additional properties each have a rateable value which does not exceed the limit set in regulations

The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set in regulations. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a fixed additional period.

Full details on the relevant limits in relation to second properties and the current period for which a ratepayer may continue to receive relief after taking on an additional property can be obtained from the business rates information on the City of York Council website or from the business rates information on GOV.UK.

Certain changes in circumstances will need to be notified to the local authority by the ratepayer who is in receipt of relief (other changes will be picked up by the local authority).

The changes which should be notified are:

  • (a) the property falls vacant
  • (b) the ratepayer taking up occupation of an additional property, and
  • (c) an increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the local authority which granted the relief

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Retail, Hospitality and Leisure Relief Scheme 2022 to 2023

At the Budget on 27 October the Chancellor announced the introduction of a new business rates relief scheme for retail, hospitality and leisure properties worth almost £1.7 billion in 2022/23 to support businesses.

The 2022/23 Retail, Hospitality and Leisure Business Rates Relief scheme will provide eligible, occupied, retail, hospitality and leisure properties with a 50% relief, up to a cash cap limit of £110,000 per business.

Properties which will benefit from relief

Hereditaments which benefit from the relief are those which for a chargeable day in 2022/23:

  • meet the eligibility criteria
  • and;
  • the ratepayer for that chargeable day has not refused the relief for the eligible hereditament. The ratepayer may refuse the relief for each eligible hereditament anytime up to 30 April 2023. The ratepayer cannot withdraw their refusal for either all or part of the financial year

Amount of relief available

Subject to the £110,000 cash cap per business, the total amount of government-funded relief available for each property for 2022/23 under this scheme is 50% of the chargeable amount for chargeable days from 1 April 2022 to 31 March 2023.

The relief will be applied after mandatory reliefs and other discretionary reliefs.

Subject to the cash cap, the eligibility for the discount and the relief itself will be assessed and calculated on a daily basis.

Ratepayers that occupy more than 1 property will be entitled to relief for each of their eligible properties up to the maximum £110,000 cash cap, per business.

Eligibility for the Retail, Hospitality and Leisure Relief Scheme

To qualify for the relief the hereditament should be wholly or mainly being used for the following qualifying purposes. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief.

The lists set out are not intended to be exhaustive as it would be impossible to list the many and varied uses that exist within the qualifying purposes. However, they are intended to be a guide for authorities as to the types of uses that the government considers for this purpose to be eligible for relief. Authorities should determine for themselves whether particular properties not listed are broadly similar in nature to those listed and, if so, to consider them eligible for the relief. Conversely, properties that are not broadly similar in nature to those listed should not be eligible for the relief.

Hereditaments that meet the eligibility for Retail, Hospitality and Leisure scheme will be occupied hereditaments which meet all of the following conditions for the chargeable day:

  • they are wholly or mainly being used:
    • as shops, restaurants, cafés, drinking establishments, cinemas or live music venues
    • for assembly and leisure; or
    • as hotels, guest and boarding premises or self-catering accommodation

Eligible hereditaments include:

  • Hereditaments considered as shops, restaurants, cafés, drinking establishments, cinemas and live music venues
  • Hereditaments that are being used for the sale of goods to visiting members of the public;
    • shops, such as florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets
    • charity shops
    • opticians
    • post offices
    • furnishing shops or display rooms, such as carpets, double glazing, garage doors
    • car or caravan show rooms
    • second-hand car lots
    • markets
    • petrol stations
    • garden centres
    • art galleries, where art is for sale or hire
  • Hereditaments that are being used for the provision of the following services to visiting members of the public;
    • hair and beauty services, such as hairdressers, nail bars, beauty salons, tanning shops
    • shoe repairs and key cutting
    • travel agents
    • ticket offices, for example for theatre
    • dry cleaners
    • launderettes
    • PC, TV, domestic appliance repair
    • funeral directors
    • photo processing
    • tool hire
    • car hire
  • Hereditaments that are being used for the sale of food and/or drink to visiting members of the public;
    • restaurants
    • takeaways
    • sandwich shops
    • coffee shops
    • pubs
    • bars
  • Hereditaments which are being used as cinemas
  • Hereditaments that are being used as live music venues;
    • live music venues are hereditaments wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Hereditaments cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or a theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987 (as amended).
    • hereditaments can be a live music venue even if used for other activities, but only if those other activities;
      • (i) are merely ancillary or incidental to the performance of live music, such as the sale or supply of alcohol to audience members, or;
      • (ii) do not affect the fact that the primary activity for the premises is the performance of live music, for example because those other activities are insufficiently regular or frequent, such as a polling station or a fortnightly community event
    • there may be circumstances in which it is difficult to tell whether an activity is a performance of live music or, instead, the playing of recorded music. Although we would expect this would be clear in most circumstances, guidance on this may be found in Chapter 16 of the statutory guidance issued in April 2018 under section 182 of the Licensing Act 2003
  • Hereditaments considered as assembly and leisure
  • Hereditaments that are being used for the provision of sport, leisure and facilities to visiting members of the public, including for the viewing of such activities;
    • sports grounds and clubs
    • museums and art galleries
    • nightclubs
    • sport and leisure facilities
    • stately homes and historic houses
    • theatres
    • tourist attractions
    • gyms
    • wellness centres, spas, massage parlours
    • casinos, gambling clubs and bingo halls
  • Hereditaments that are being used for the assembly of visiting members of the public;
    • public halls
    • clubhouses, clubs and institutions
  • Hereditaments considered hotels, guest and boarding premises, and self-catering accommodation
  • Hereditaments where the non-domestic part is being used for the provision of living accommodation as a business;
    • hotels, guest and boarding houses
    • holiday homes
    • caravan parks and sites

Non-eligible hereditaments

The following list sets out the types of uses that the government does not consider to be an eligible use for the purpose of this discount. It is for local authorities to determine for themselves whether particular properties are broadly similar in nature to those below and, if so, to consider them not eligible for the discount under their local scheme.

  • Hereditaments that are being used for the provision of the following services to visiting members of the public;
    • financial services, such as banks, building societies, cash points, bureaux de change, short-term loan providers, betting shops
    • medical services, such as vets, dentists, doctors, osteopaths, chiropractors
    • professional services, such as solicitors, accountants, insurance agents, financial advisers, employment agencies, estate agents, letting agents
    • post office sorting offices
  • Hereditaments that are not reasonably accessible to visiting members of the public

The cash cap and subsidy control

Under the cash cap, no ratepayer can in any circumstances exceed the £110,000 cash cap across all of their hereditaments in England.

Where a ratepayer has a qualifying connection with another ratepayer then those ratepayers should be considered as 1 ratepayer for the purposes of the cash caps. A ratepayer shall be treated as having a qualifying connection with another:

  • a. where both ratepayers are companies, and
    • i. one is a subsidiary of the other, or
    • ii. both are subsidiaries of the same company; or
  • b. where only 1 ratepayer is a company, the other ratepayer (the “second ratepayer”) has such an interest in that company as would, if the second ratepayer were a company, result in its being the holding company of the other

Furthermore, the Retail, Hospitality and Leisure Relief Scheme is subject to the subsidies chapter within the UK EU Trade and Cooperation Agreement (TCA). The subsidies chapter within the TCA only applies to subsidies over the value of approximately £343,000 per beneficiary over a 3 year period (consisting of the current financial year and the two previous financial years) (the Small Amounts of Financial Assistance limit). Extended Retail Discounts granted in 2020 to 2021 or 2021 to 2022 do not count towards the limit. COVID-19 business grants received from local government and any other subsidy claimed under the Small Amounts of Financial Assistance limit over the 3 year period should be counted.

Therefore, to claim the Retail, Hospitality and Leisure relief you must not have exceeded either the £110,000 cash cap for 2022 to 2023 or the Small Amounts of Financial Assistance limit of £343,000 over 3 years (including 2022 to 2023).

The award of this relief must comply with Subsidy rules. See further information regarding Subsidies on GOV.UK.

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Expanded Retail Discount 2021 to 2022

The government’s Budget announcement on 3 March 2021 included support for businesses most affected by the COVID-19 pandemic through Business Rate Reliefs.

This relief will apply to occupied retail, leisure and hospitality properties in the year 2020/21. A subsidy ‘Cash Cap’ is applied to this relief. Eligible properties will therefore receive:

  • 100% relief from 1 April 2021 to 30 June 2021. No ‘Cash Cap’ applies for this period.
  • 66% relief from 1 July 2021 to 31 March 2022, up to a value of £2,000,000 per business for properties that were required to be closed on the 5 January 2021; where a business was not required to close on 5 January 2021, a £105,000 per business ‘cash cap’ will apply

There will be no rateable value limit on the relief.

Hereditaments that meet the eligibility for Expanded Retail Discount will be occupied hereditaments which meet all of the following conditions for the chargeable day:

  • they are wholly or mainly being used:
    • as shops, restaurants, cafés, drinking establishments, cinemas and live music venues
    • for assembly and leisure; or
    • as hotels, guest and boarding premises and self-catering accommodation

The government consider shops, restaurants, cafés, drinking establishments, cinemas and live music venues to mean:

  • 1) Hereditaments that are being used for the sale of goods to visiting members of the public:
    • shops (such as: florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets)
    • charity shops
    • opticians
    • post offices
    • furnishing shops/ display rooms (such as: carpet shops, double glazing, garage doors)
    • car and caravan show rooms
    • second hand car lots
    • markets
    • petrol stations
    • garden centres
    • art galleries (where art is for sale or hire)
  • 2) Hereditaments that are being used for the provision of the following services to visiting members of the public:
    • hair and beauty services (such as: hairdressers, nail bars, beauty salons, tanning shops)
    • shoe repairs/key cutting
    • travel agents
    • ticket offices (for example for theatre)
    • dry cleaners
    • launderettes
    • computer, television, domestic appliance repair
    • funeral directors
    • photo processing
    • tool hire
    • car hire
    • employment agencies
    • estate agents and letting agents
    • betting shops
  • 3) Hereditaments that are being used for the sale of food and/or drink to visiting members of the public:
    • restaurants
    • takeaways
    • sandwich shops
    • coffee shops
    • pubs
    • bars
  • 4) Hereditaments which are being used as cinemas
  • 5) Hereditaments that are being used as live music venues:
    • live music venues are hereditaments wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Hereditaments cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or a theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987 (as amended)
    • hereditaments can be a live music venue even if used for other activities, but only if those other activities;
      • (i) are merely ancillary or incidental to the performance of live music (for example the sale/supply of alcohol to audience members), or;
      • (ii) do not affect the fact that the primary activity for the premises is the performance of live music (for example because those other activities are insufficiently regular or frequent, such as a polling station or a fortnightly community event)
    • there may be circumstances in which it is difficult to tell whether an activity is a performance of live music or, instead, the playing of recorded music, although we would expect this would be clear in most circumstances, guidance on this may be found in Chapter 16 of the statutory guidance issued in April 2018 under section 182 of the Licensing Act 2003 [footnote 4]

The Government considers assembly and leisure to mean:

  • 1) Hereditaments that are being used for the provision of sport, leisure and facilities to visiting members of the public (including for the viewing of such activities).
    • sports grounds and clubs
    • museums and art galleries
    • nightclubs
    • sport and leisure facilities
    • stately homes and historic houses
    • theatres
    • tourist attractions
    • gyms
    • wellness centres, spas, massage parlours
    • casinos, gambling clubs and bingo halls
  • 2) Hereditaments that are being used for the assembly of visiting members of the public.
    • public halls
    • clubhouses, clubs and institutions

The Government considers hotels, guest and boarding premises and self-catering accommodation to mean:

  • 1) Hereditaments where the non-domestic part is being used for the provision of living accommodation as a business:
    • hotels, Guest and Boarding Houses
    • holiday homes
    • caravan parks and sites

To qualify for the discount the hereditament should be wholly or mainly being used for the above qualifying purposes. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation.

Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief. For the avoidance of doubt, hereditaments which have closed due to the government’s advice on COVID-19 should be treated as occupied for the purposes of this relief.

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Charity and Community Amateur Sports Club Relief

Charities and registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the charity or the club and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the club (or of that and other clubs).

The local authority has discretion to give further relief on the remaining bill. Full details can be obtained from the local authority.

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Unoccupied Property Rate Relief

Business rates are generally payable in respect of unoccupied non-domestic property. However, they are generally not payable for the first 3 months that a property is empty. This is extended to 6 months in the case of certain other properties (for example industrial premises).

See full details on property exemptions and reliefs:

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Partly Occupied Property Relief

A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time, the local authority has discretion in certain cases to award relief in respect of the unoccupied part.

See full details on property exemptions and reliefs:

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Transitional Rate Relief

At a revaluation, some ratepayers will see reductions or no change in their bill whereas some ratepayers will see increases.

Transitional relief schemes are introduced at each revaluation to help those facing increases. This relief has been funded by limiting the reduction in bills for those who have benefitted from the revaluation. Transitional relief is applied automatically to bills.

See further information about the Transitional Relief Scheme.

See business rates information on GOV.UK.

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Local Discounts

Local authorities have a general power to grant discretionary local discounts and to give hardship relief in specific circumstances.

See further information about business rates reliefs.

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Relief for Local Newspapers

The Government is providing funding to local authorities so that they can provide a discount worth up to £1,500 a year on office space occupied by local newspapers. This scheme provides up to a maximum of one discount per local newspaper title and per hereditament, and up to subsidy limits.

The relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988).

In a Written Ministerial Statement on 27th January 2020 the Government announced that the extension of the £1,500 business rates discount for office space occupied by local newspapers, will apply for an additional 5 years until 31st March 2025.

An eligibility criterion for this relief is set out in a GOV.UK guidance note: The case for a business rates relief for local newspapers.

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Rate Relief for Businesses in Rural Areas

Certain types of properties in a rural settlement with a population below 3,000 may be entitled to relief. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500, or the only public house or the only petrol station and have a rateable value of less than £12,500. The property has to be occupied.

An eligible ratepayer is entitled to relief at 100% of the full charge (50% being mandatory relief and 50% centrally funded discretionary relief).

See further information about rural rate relief.

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Subsidy - formerly State Aid

Following the UK withdrawal from the European Union, the Brexit transition period has ended and new rules on subsidy control now apply. Subsidies have replaced State Aid.

A subsidy:

  • is given by a public authority. This can be at any level – central, devolved, regional or local government or a public body
  • makes a contribution (this could be a financial or an in kind contribution) to an enterprise, conferring an economic advantage that is not available on market terms. Examples of a contribution are grants, loans at below market rate, or a loan guarantee at below market rate or allowing a company to use publicly owned office space rent free. An enterprise is anyone who puts goods or services on a market. An enterprise could be a government department or a charity if they are acting commercially
  • affects international trade. This can be trade with any World Trade Organisation member or, more specifically, between the UK and a country with whom it has a Free Trade Agreement. For example, if the subsidy is going towards a good which is traded between the UK and the EU this could affect trade between the EU and the UK. Please note that you are not being asked whether the subsidy could harm trade but merely whether there could be some sort of effect. Subsidies to very local companies or a small tourist attraction are unlikely to be caught as this is unlikely to affect international trade

See further information regarding Subsidies on GOV.UK.

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Rating Advisers

Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. However, ratepayers who do wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors (RICS) and the Institute of Revenues, Rating and Valuation (IRRV) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.

Before you employ a rating adviser or company you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.

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Information Supplied with Demand Notices

Information relating to the council’s gross expenditure for the relevant and previous financial years is available at www.york.gov.uk.

A hard copy is available on request by contacting the Council’s Business Rates Team on any of the details below.

Postal Address:

Business Rates Team
City of York Council,
West Offices,
Station Rise,
York,
YO1 6GA

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Also see

Business Rates

West Offices, Station Rise, York, YO1 6GA

Telephone: 01904 551140