£1.3 million Shropshire business rate relief scheme revealed
A fund worth £1.3 million will be split between more than 1,000 businesses hit by hikes in business rates hikes under plans unveiled today by Shropshire Council.
The authority has been working on its business rate relief scheme for several months, and came under fire in June for not making the money available earlier.
The government has made £1.3million available to help businesses in Shropshire affected in this financial year.
The funding will continue for three years following but will reduce considerably year-on-year – to £635,000 for 2018/19, to £262,000 for 2019/20, and £37,000 in 2020/21.
Any of the funding not handed out will then be taken back by the government.
Under the council plans it is estimated that more than 1,100 businesses will be eligible for the rate-relief fund.
They money will help mitigate against increases in business rates brought about by the first revaluation of properties in seven years. It means some businesses face an increase in bills of up to 42 per cent.
A report prepared by James Walton, Shropshire Council's head of finance, states: "Working to the above parameters Council Officers have identified 1,129 businesses with a rateable value between £15,000 and £200,000 that have seen an increase in their net rates."
A number of different criteria have been set out by the council for those businesses eligible for the relief.
They include not being available to businesses with a rateable value of £15,000 or less, or to national companies.
Under the plans new occupiers of properties will not receive relief, as it is intended to protect ratepayers from large increases from the revaluation. New occupiers will not have been affected by the revaluation.
As part of the report, which will be considered by Shropshire Council's cabinet next Wednesday, concerns are raised that the relief could leave businesses unprepared for large increases in bills over the next few years.
It states: "Some qualifying businesses, as a result, will see a minimal increase in their rates bill in 2017/18 when compared to 2016/17, despite their rateable value increasing by, perhaps, four to five times.
"As the New Business Rate Relief Scheme funding cannot be carried forward into future years, there is a real danger that businesses are not fully aware of the impact of the rateable value increase in later years given the confusing and complex arrangements in place this year. There is a risk that businesses in Shropshire will, to a greater extent, need New Business Rate Relief Scheme funding in later years, but with the funding available tapering significantly, and with the inability to carry funding forward, there will not be the support available for these businesses at that time."
The report, which recommends a two-week internet-based consultation on the plans, says that difficulties in formulating the scheme are behind the delay in its implementation.
It states: "There are a very large number of small to medium businesses in Shropshire (approximately 12,000) and without a clear focus for a local scheme, there is a risk that a scheme could become unworkable and could allocate insubstantial amounts of funding across a wide number of businesses. Furthermore, the costs of administering a local scheme could significantly outstrip available resources if designed inappropriately. To mitigate this the scheme is designed to target the most appropriate businesses."
