Agenda item

To receive a report from the Chief Officer Financial Services presenting a briefing on current business rates issues.

The report of the Chief Officer Financial Services provided an update on issues relating to Business Rates following the work undertaken by the Strategy and Resources Scrutiny Board last year.

In particular, the report provided an overview of the current Business Rates Retention pilot and the application for a Business Rates Retention pilot in 2019/20.  It also gave reasons for the volatility of Business Rates and looked at issues within the context of the Fair Funding Review and the Business Rates System Reset.

In attendance at the meeting were:

·  Cllr. James Lewis – Executive Member for Resources and Sustainability

·  Doug Meeson – Chief Officer, Financial Services

·  Richard Ellis – Head of Finance

In consideration of the report, the following key points were made:

·  Business Rates remains a high profile issue and featured in the Chancellor’s recent budget announcement, with further discounts being awarded to businesses in properties that have a rateable value up to £53,000;

·  Numbers of appeals in Leeds continue to reduce, with 851 being settled within the first six months of this year;

·  Whilst there were 1,843 outstanding appeals as of 30^th September 2018, it was not known how long it would take to reduce the backlog. It was noted that this may be dependent on the difficulty of the cases outstanding;

·  A large number of outstanding appeals were lodged against the 2010 ratings list. No appeals had yet been lodged against the 2017 ratings list. Linked to this, it was noted that the Government had reformed the appeals process with a new system, coming into force for the 2017 list, called ‘Check, Challenge, Appeal’. Under this system ratepayers have to put forward a suggested alternative Rateable Values for their property, and give more robust arguments why this Rateable Value should apply.

·  It was noted that the introduction of a new portal coming online in the Autumn of 2018 could potentially impact on appeal trends as this will allow ratings agents to lodge appeals on behalf of multiple clients.

·  It was noted that HMRC calculate the rateable value of properties and this is updated regularly. Details of property values are publically available and listed on the Data Mill North;

·  The Business Rates team check the planning permissions and ensure charges are applied as quickly as possible;

·  Local MP’s were asked to lobby the Government to support the Council’s application for the Business Rates Retention Pilot in 2019/20 as this could provide a £7m saving. The outcome of the application would not be known until 6^th December 2018.

·  Clarification was sought regarding Business Rates Relief for charitable organisations and Academies. It was noted that as the number of Academies increases, this reduces income to the local authority for which there is no compensation.

·  Concern was raised about the potential misuse of mandatory charity relief to evade or avoid taxation. Whilst it was noted that due diligence is taken in relation to ascertaining credibility of charitable organisations, it would prove difficult to assess all organisations on a regular basis.

·  In maintaining a watching brief of issues surrounding Business Rates, the Chair requested that lead officers from the Council’s Business Rates Team be invited to contribute to future discussions of the Board.

RESOLVED – To note the content of the report.

(Cllr. J McKenna joined the meeting at 11:05 am during this item)