Rural Business Rates

Posted by on May 1, 2013 in Business Rates | 0 comments

A little warning of a potential issue for those who have found an alternative use for a building on their farm but are yet to pay any business rates.  From April 2013, local councils will take on a more direct relationship with the business rates which they collect.  Whereas the current regime means that a local authority is responsible for collecting business rates, the money collected is then transferred to central government.  From central government, funds are distributed according to a prescribed formula which does not rely on the amount of business rates collected.  This provides little incentive for local authorities to investigate new premises.

Under the new regime it is possible that cash-strapped councils will put resources into ensuring that the revenue they raise from business rates is as high as possible as they will be able to keep the cash.  This may include sweeping in those diversification projects which have until now escaped rates or re-visiting rated properties to ensure that the amount being charged is appropriate to the current use.  Perhaps the most daunting prospect is any back-dating of rate payments.

Assuming that all/most on farm conversions have obtained planning consent, these are all public documents and readily available to the council so it remains to be seen whether there will be any cross-referencing between departments within councils and the Valuation Office.

Time will tell whether this will set hares running or whether under-resourced councils struggle to effect any benefit to their coffers through this change in collection mechanism.