PLease see below and update from the Sport and Recreation Alliance
Small Business Rate Relief
- In the 2016 Budget the Chancellor announced an extension of the small business rate relief scheme. Currently, properties with a rateable below £6,000 receive 100% relief with a tapered relief between £6,001 and £12,000. From April 2017 the threshold will be doubled: properties with a rateable value below £12,000 will receive 100% relief from rates with tapered relief between £12,001 and £15,000.
- Currently there are around 1.8 million properties assessed for rates and the sheer scale of the tax means that there are lots of local variations in how clubs are described.
- There are currently over 23,500 properties described as ‘Sports Ground and Premises’. Of these, only around 4,000 have current rateable values above £11,999.
- Similarly, there are approx. 11,500 properties described as ‘Clubhouse and Premises’ with almost 700 assessed above £11,999.
- Overall these figures suggest the extension of the small business rate relief scheme will be good news for community sport as the rate bills of a significant number of clubs will disappear from next year.
Ability to Pay
- Although from April 2017 many smaller clubs will be exempt from rates, the tax will continue to be an issue for larger clubs or those who have invested in their facilities and for those whose rateable value moves above the £12,000 threshold (which could occur as a result the next round of valuations due in late 2016/early 2017).
- Valuation Office Agency (VOA) guidance exists which is intended to ensure that rate bills for sports clubs are proportionate and directly connected to the financial position of clubs. However it is not clear to what extent the guidance is taken into account by VOA officials or how aware individual clubs are of its existence.
- The guidance establishes that if it can be shown that the only occupier of a sports facility is the incumbent organisation or club (or merely another one stepping into its shoes) then the rateable value of the clubhouse or ground must reflect that club’s ability to pay. The rating system requires that every property is assessed in its existing physical state and alternative uses are generally ignored. This means for rating purposes a rugby club must be considered as a rugby club, a tennis club as a tennis club etc.
- Applying the guidance can have a significant impact on the assessment of a club. In addition, ability to pay does not just apply to local community clubs but it can also apply to a much wider range of sporting facilities. It is therefore important that clubs challenge their valuation where they believe it does not reflect their ability to pay.
- The VOA guidance can be found here: http://app.voa.gov.uk/corporate//publications/Manuals/RatingManual/RatingManualVolume5/sect970/e-rat-man-vol5-s970-app2.html(see paras 2 and 5 (ii) in particular).