Agenda item
Calculation of Business Rates Income 2014/15
This report sets out the calculation of the estimated income from National Non Domestic Rates (NNDR), also known as Business Rates, to be used for 2014/15. This figure is used in the calculation of the council tax for 2014/15. Regulations require that the calculation is agreed by 31st January prior to the start of the financial year.
Minutes:
Conrad Hall (Chief Finance Officer) presented a report to the committee setting out the calculation of the estimated income from National Non Domestic Rates (NNDR), also known as Business Rates, to be used for 2014/15. This figure would be used in the calculation of the council tax requirement for 2014/15 and was required to be agreed by 31 January 2013. It was explained that the estimate for the actual income figure (or net rate yield) for 2014/15 would be based on a return to the Department for Communities and Local Government (DCLG) called the NNDR1. However, due to changes introduced in the Autumn Statement there had been delay in the DCLG issuing the required NNDR1 form. Members were advised that the government had stated that local authorities would be fully reimbursed for the cost of these changes and had produced a draft NNDR1; this had been used as the basis for recommending that the estimated income from NNDR for 2014/15 be set at £113.82m, of which Brent would retain 30 percent (£34.146m). It was acknowledged that it might prove necessary to amend the calculation as more details were released by the DCLG and therefore it was recommended that the Chief Finance Officer be given delegated responsibility to amend the proposed figure if appropriate.
Members were advised the net rate yield for 2014/15 was calculated by applying a multiplier set by the government to the aggregate rateable value for Brent as at 31 December 2013; this was a fixed figure based on the Valuation Office’s (VO) valuations for all Brent properties at that date. The resulting figure was then adjusted to account for various uncertainties. It was emphasised that due to these uncertainties, it could be very difficult to accurately estimate NNDR income. In particular, it was difficult to predict the impact of appeals against the Valuation Office. There were approximately 1,000 appeals outstanding, accounting for 24 percent of the total rateable value. In the case of successful appeals, the DCLG had indicated that it would allow the costs of backdated refunds to be spread over five years to avoid large fluctuations in income. The council was required to undertake a further calculation at the end of each year of a surplus or deficit on the NNDR part of the collection fund, with Brent either receiving or bearing responsibility for 30 percent of this.
During members’ discussion, it was queried whether the council had any powers to ask the VO to reassess a property or to seek assurance that the VO was satisfied that the correct valuation had been made. Clarification was sought on whether the council was responsible for the entire repayment in cases of successful appeals against the VO, noting that prior to 2013/14 there was no local retention of business rates.
In response, Conrad Hall advised that the council was not able to challenge a valuation of a property, as it was understood that this right only extended to the bill payer. In view of the considerable backlog of appeals, it was unlikely that the council could encourage the VO to re-examine a property; however, questions would be put to the VO regarding the processes by which it determined that valuations were correct. It was emphasised that the maximisation of NNDR income was best achieved by encouraging and attracting business to Brent. With regard to responsibility for backdated repayments following successful appeals, Conrad Hall advised that local authorities were currently bearing this burden, despite there having been a different system in place prior to 2013/14. The legislation had not been explicit on this matter and Local Authorities were making representations.
RESOLVED:
(i) that the estimated income from NNDR for 2014/15 be set at £113.82m;
(ii) that it be noted that Brent would retain 30 percent of the estimated income from NNDR for 2014/15, equaling £34.146m;
(iii) that authority by delegated to the Chief Finance Officer to amend these figures to reflect any changes necessary once the final guidance from the Government had been produced.
Supporting documents: