The Deferral Scheme
Background
On the 31st March 2009 the Chancellor announced that the Government will enable businesses to defer payment of a proportion of the increase in their 2009-10 business rates bills. The deferred payments will be paid in 2010-11 and 2011-12.
In the budget the Government stated that ratepayers could defer 60% of the increase in their 2009-10 rates bill caused by the retail price index (RPI) adjustment to the non-domestic multiplier; and the end of the transitional relief scheme for the 2005 revaluation period.
For ratepayers who were not receiving transitional relief in 2008-09, they can choose to defer £13.80 for every £1,000 of the rateable value. To repay the amount, £6.90 would be added to both the charge for 2010-11 and the charge for 2011-12.
For ratepayers who were in receipt of transitional releif in 2008-09, they can defer both the increase in RPI and 60% of the amount of transitional relief they received as at 31st March 2009.
An application pack is being sent to all businesses in Doncaster based on the information held on the business rates database.
Eligibility
We are required to grant a deferral to all businesses that pay rates in 2009-10 and who apply for the scheme, except:
Where the ratepayer has already paid the 2009-10 rates liability in full. This is because the regulations cannot be applied retrospectively so refunds cannot be provided.
Where the ratepayer is due to pay the 2009-10 rates liability in full within 21 days of receiving the application.
Where the ratepayer has lost the right to pay by instalments due to non-payment.
If a ratepayer applies for a deferral and is found to be ineligible then we will write to confirm this and the reasons why.
Where a ratepayer occupies a property part way through 2009-10 they are still eligible for deferral. The amount that can be deferred will be pro-rata to the period of occupation during 2009-10.
Applying for the scheme
The form of application has been specified by Government. An electronic version is available below.
For ratepayers who wish to apply for numerous properties only one application form needs to be completed, however, details of all properties being applied for must be submitted with the form.
The application form must be signed by the ratepayer or a person authorised to sign by the ratepayer. A person authorised to sign on behalf of the ratepayer means, where the ratepayer is:
In any other case a person authorised to sign by the ratepayer.
Once an application is received we will:
establish eligibility as outlined above
calculate the amount that the ratepayer can defer
amend payment schedules
issue a revised demand notice
We are hoping to process applications within 21 days of receipt. However, with over 8,000 ratepayers in the area this depends on the number of applications received.
Adjusted Instalments
Once your eligibility to the scheme has been confirmed and the deferred amount calculated an amended bill will be issued with a revised instalment plan.
Where instalments have already fallen due but have not been paid then these will not be changed. Instead the deferred amount will be deducted from instalments which have not fallen due.
Your bill will show details of any overdue instalment amount, the amount of future instalments, the total amount deferred into 2010-11 and the total amount deferred into 2011-12.
Where the remaining balance on your account is less than the amount which can be deferred the maximum deferral amount will be the balance on the account. For example where the balance on your account is £100 and the calculated deferral amount is £200, only £100 can be deferred.
Changes in Circumstances
Where there is a change to your liability for business rates during the year, for example where the rateable value of the property changes or your eligibility for small business rates relief changes, your deferral amount will need to be adjusted. Below is a list of changes which may occur and how this will affect you.
Your liability for business rates ends on the property to which deferral applies - The full balance including the deferred amount becomes due.
There is a change to the rateable value - The amount of increase deferred will be automatically adjusted and new bills issued reflecting the change.
Your property is split/merged - The agreed deferred amount on your previous liability ends (see above). You can apply for a deferral on your new liability.
Repaying the Deferred Amount
The deferred amount will be repayable over the next two financial years, 2010-11 and 2011-12, 50% in each year. Your bills for these years will show an additional amount for the deferred amount due that year and will be included in your instalment plan for that year.
Enforcement
Where a deferral has been agreed and you default on your instalment arrangement, meaning that you lose the right to pay by instalments, the full balance, including any deferred amount will become due.
Questions
If you require any further information on deferred liability please contact the business rates team at the above address.
