Appendix 4
S.I. 2012/148: memorandum from the Department
for Communities and Local Government
Non-Domestic Rating (Small Business Rate Relief)
(England) Order 2012 (S.I. 2012/148)
1. The Committee has requested a memorandum on
the following points:
Explain whether, by specifying the figure "5,000,000"
as E in the case of hereditaments with a rateable value of not
more than £6,000, the provision made by article 4(3) is tantamount
to the granting of an exemption for such hereditaments and, if
so, what is the authority for doing so.
2. Where the condition in section 43(4B)(a)(i)
of the Local Government Finance Act 1988 is fulfilled, the chargeable
amount which a ratepayer is liable to pay for a chargeable day
is calculated in accordance with the formula set out in section
43(4A)(a) (in England) in substitution for the formula in section
43(4). This forms the mechanism by which eligible ratepayers benefit
from small business rate relief. Section 44(9)(a) of the 1988
Act provides that the value of E in that formula is such amount
as may be prescribed by the Secretary of State by order.
3. E being specified as "5,000,000"
means that the formula results in a chargeable amount that is,
after rounding, zero. The small business rate relief in this instance
therefore amounts to 100 per cent. of what would have been the
chargeable amount. However, it represents the maximum amount of
relief available, not, in the view of the Department, an exemption,
as the ratepayer still retains a liability to pay the chargeable
amount for each chargeable day, even if the chargeable amount
is nil.
4. Article 7 of the Non-Domestic Rating (Small
Business Rate Relief) (England) Order 2004 (S.I. 2004/ 3315),
which was inserted into the 2004 Order in 2010 by S.I. 2010/1655,
also specified the value of E as "5,000,000".
Department for Communities and Local Government
5 March 2012
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