(This note is not part of the Regulations)

These Regulations amend the Non-Domestic Rating (Rates Retention) Regulations 2013 (S.I. 2013/452) (“the Rates Retention Regulations”) and the Non-Domestic Rating (Levy and Safety Net) Regulations 2013 (S.I. 2013/737) (“the Levy and Safety Net Regulations”) to provide for:

  1. a

    changes to the administration of the rates retention scheme to give effect to the Government's decision to create, from 1st April 2019, further business rates retention pilots in Berkshire, Buckinghamshire, East Sussex, Greater London, Hertfordshire, Lancashire, Leicestershire, Norfolk, Northamptonshire, North and West Yorkshire, North of Tyne, Solent, Somerset, Staffordshire and Stoke, West Sussex and Worcestershire (“75% pilot areas”), in which authorities will retain 75% of locally raised rates;

  2. b

    changes reflecting local government reorganisations taking effect on 1st April 2019;

  3. c

    changes to the baseline funding level of the Council of the Isles of Scilly.

These Regulations also make provision in relation to the distribution of the remaining balance of the levy account kept by the Secretary of State under Part 6 of Schedule 7B to the Local Government Finance Act 1988 (“the 1988 Act”).

Amendments to the Rates Retention Regulations

Regulations 3 to 5, 7, 8 and 10 amend provisions in the Rates Retention Regulations which require billing authorities to make certain calculations for each financial year; make payments to the Secretary of State and major precepting authorities and to make transfers between their collection fund and general fund. The amendments relate to the introduction of the 75% pilot areas and the coming to an end of 100% pilot arrangements in place for the financial year 2018-19.

Regulation 6 amends regulation 11 of those Regulations to deal with the situation in which there needs to be a reconciliation between the outcome of calculations made before and after a financial year.

Regulation 9 makes amendments in relation to the rules in Schedule 4 to the Rates Retention Regulations which govern how billing authorities estimate and apportion a surplus or deficit in their collection fund.

Amendments to the Levy and Safety Net Regulations

Regulation 12 amends regulation 2 of the Levy and Safety Net Regulations to amend the definition of “business rates baseline”.

Regulation 13 amends regulation 5 of those Regulations to provide for the business rates baseline for certain authorities for the financial year commencing on 1st April 2019, and for the Council of the Isles of Scilly for the financial year commencing on 1st April 2018. Regulation 14 amends regulation 6 of those Regulations to provide for the levy rate of both authorities in 75% pilot areas and those subject to local government reorganisation (and see also the amendments made by regulation 13). Regulation 18 inserts Schedule 5 to the Levy and Safety Net Regulations to reflect local government reorganisation.

Regulation 15 amends Schedule 1 to those Regulations to provide for the calculation of “retained rates income” for billing authorities in 75% pilot areas and for all authorities to take account of compensation paid to local authorities in respect of the changes to small business rate relief announced in the 2016 Autumn Statement.

Regulation 17 substitutes Schedule 4 to the Levy and Safety Net Regulations (set out in Schedule 3 to these Regulations).

Basis of distribution of levy account surplus

Regulation 19 provides a basis for calculating, when a determination is made to distribute a surplus in the levy account kept by the Secretary of State under Part 6 of Schedule 7B to the 1988 Act, how much is payable to each authority. In doing so, it refers to the table of values in Schedule 5 to these Regulations.

Regulation 20 makes amendments to Schedule 5 from 1st April 2019 to reflect local government reorganisations which come into force on that date.

An impact assessment has not been produced for this instrument because it amends an existing local tax regime. Publication of a full impact assessment is not necessary for such legislation.