Business Rate Review - Consultation
As part of a Business Rates Review, the Department has recently completed a consultation exercise on the future direction of the system within Northern Ireland. The eight week consultation period was launched on 16 September 2019. The consultation period closed on 11 November 2019. The Department is currently analysing the responses to this exercise.
The Review is of strategic importance for government to ensure that the business rating system is fit for purpose in order to fund Northern Ireland’s key services, both at regional and district level. The system, together with the suite of support measures, needs to be positioned to respond to changing marketplaces and local economic conditions, and should align with wider government strategy to promote economic growth right across Northern Ireland.
It will evaluate the current position and make recommendations as to how the business rates system can be effective and fair, while still ensuring that overall, the same amount of revenue is available.
Review of Rating System - Innovation Lab
In May 2019, the Permanent Secretary for the Department of Finance announced her intention to initiate a fresh appraisal of the fundamental features of the rating system in Northern Ireland.
The first step towards that appraisal process will be an Innovation Lab process at the start of July 2019. This Lab (undertaken alongside the other Departments) will assess and respond to the significant changes that have taken place in relation to Northern Ireland high streets and town centres. The Lab event will gather leading experts in the field of urban regeneration, taxation and the high street.
The Lab process will serve to guide the strategic direction of a subsequent fundamental appraisal process for the rating system conducted by the Department of Finance. The process of stakeholder engagement will see any interested parties engage with the Department of Finance’s Rating Policy Division in order to inform its policy appraisal work in this area. Any stakeholders interested in this process can register their interest now by e-mailing firstname.lastname@example.org
The outcome of both the cross-Departmental Innovation Lab and the subsequent stakeholder engagement and appraisal of rating will put the Department in the best position to provide up to date and relevant advice to any incoming Finance Minister, and to input into the direction of any future Executive’s Programme for Government.
Northern Ireland Budgetary Outlook 2018-19
The Department has published the impact assessment work undertaken as part of the Budgetary Outlook paper.
Rates Bills 2018-19
On Wednesday 28 March 2018 the Northern Ireland (Regional Rates and Energy) Bill gained Royal Assent following its passage through Westminster. The Bill sets the amounts of the regional domestic and non-domestic rates for the financial year ending on 31 March 2019. The Bill implements an increase in the domestic regional rate of 4.5 per cent. The non-domestic rates increase by 1.5 per cent, in line with inflation.
In her statement on 8 March 2018 the Secretary of State for Northern Ireland also confirmed that the budget settlement for 2018-19 would provide the basis for the Small Business Rate Relief to continue. The legislation extending the scheme for 2018-19 has now been made by the Department of Finance and comes into operation on 1 April 2018.
In September 2017, the new rate rebate scheme for working age claimants awarded Universal Credit, who can no longer avail of Housing Benefit was introduced. This policy was previously agreed by Executive Ministers, following three consultations. The regulations for the new rate rebate scheme were made on 11 September 2017 and came into operation from 27 September 2017.
Universal Credit (UC) replaces housing benefit for rent only therefore a localised scheme for help with rates in Northern Ireland had to be devised. The new scheme will gradually replace housing benefit for rates in tandem with the introduction of universal credit by geographical area.
The new scheme is therefore only available in areas where UC has been introduced and you must qualify for UC to be entitled to rate rebate. Rates support for those not eligible to claim UC will continue to be provided through the social security system by housing benefit.
The local low income rate relief scheme, which is a top up of housing benefit, will also be phased out alongside housing benefit for rates.
Details on how to claim can be found on nidirect.
Play your part in Rates Rethink process - Ó Muilleoir
Finance Minister Máirtín Ó Muilleoir has published a consultation paper on the package of measures announced on the 22 November. This initiates a nine week consultation period, ending on 16 February 2016.
The Minister said: “My Rates Rethink proposals are the biggest package of reforms to our rates system for a generation. I want to see a modern, fairer rates system, which encourages regeneration, investment and entrepreneurship, while at the same time discourages dereliction and decline.
“The changes I wish to take forward have fairness at their heart with everyone contributing according to their ability. They have three underlying objectives. Firstly, to spread the burden wider, secondly to be more discerning with the application of reliefs and allowances and finally, to use the rating system as a lever of social and economic development.”
The proposed measures include:
- a new £22m a year Rates Investment Scheme for smaller retail and hospitality business
- piloting Business Empowerment Zones in two areas (Lower Newtownards and Lower Falls Roads)
- increasing rates on empty commercial properties
- Charity shops to make a contribution
- charging the highest value homes more
- removing the early payment discount
- reducing landlord allowances
- Student halls of residence to start paying rates
- a three year rates holiday for first residents of new energy efficient home.
The Minister added: “It is vitally important that we get these changes right for future generations to help build growth across our society and that’s where you can play your part. This consultation will give everyone the opportunity for their voice to be heard on these important issues.
“I would strongly encourage people to respond to this consultation so that collectively, we create a 21st Century rating system that is responsive to both the views of ratepayers and the needs of our public finances in paying for our public services. The consultation closed on 16 February 2017.”
Rates Liability for Domestic Rental Properties
In March 2016 the Department launched a public consultation exercise in relation to rates liability in the domestic rental sector.
The Department intends to use the consultation process to establish the case for change in this policy area with the aim of ensuring that arrangements:
- are fair, not simply to those in the sectors concerned but to the wider body of ratepayers
- are workable and affordable (and that any allowances that are provided are no more and no less than they need to be)
- support the effective and efficient collection of rates
- ensure clarity of responsibilities for rate liability for both landlords and tenants, and
- are consistent, so that one type of landlord is not placed at a disadvantage compared to another type of landlord
The consultation exercise ran for an 8 week period and closed on 3 June 2016.
Responses to the consultation exercise and an accompanying consultation report have now been made available on the Rating Policy Division’s website. The results of the consultation exercise have now been analysed and presented to the Minister, in order to information policy decisions in this area.
Future of Small Business Rate Relief Scheme
On 21 March, the Minister of Finance and Personnel along with his Department for Social Development counterpart launched a discussion paper on the future of small business rate relief scheme.
The Departments are seeking views on alternatives to small business rate relief, with a particular focus on town centres. The discussion period ended on 13 May 2016.
Review of Non-Domestic Rating System
The Department has considered the responses from the public consultation and have now published a report.
Rate relief for sports clubs
On 19 January 2016 Finance Minister Mervyn Storey introduced legislation in the Assembly to allow enhanced rate relief to be provided to struggling community amateur sports clubs.
This Bill permits the Department to put community sports on the same footing as community halls by granting 100 per cent rate relief to unlicensed club premises and associated sporting facilities.
The Rates (Amendment) Bill passed its Final Stage in the Assembly on 2 February 2016 and gained Royal Assent on 28 February 2016.
On 2 March the Department launched a targeted consultation document in relation to the proposed use of the enabling power. The consultation ended on 9 May 2016.
The Assembly passed the necessary legislation for these changes to apply from 26 October onwards. The change enhances relief from 80 per cent to 100 per cent for Community Amateur Sports Clubs without a bar. Clubs must apply in order to receive the enhanced relief.
District Rate Convergence Scheme - publication of subsidies
28 January 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 provides a subsidy 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 have been published.
4 December 2014: NICEP has completed the evaluation and their full evaluation report has now been published.
The Executive's draft Budget proposals made provision of £20 million for continuation of the scheme.
De-Rating of commercial window displays
November 2014 - 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 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
13 November 2014 - Land & Property Services (LPS) 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.