RHL 75% Business Rates reduction

[SHARPYWAN]

Hi,
So i currently own 2 leisure businesses, both currently benefitting from the 75% business rates reduction.
I am in the process of opening a 3rd, however the council are insisting that i have to pay full business rates from the point the lease is signed to the date we open to the public (approx 3months). this is quite a significant sum at over £3k per month. Surely this can't be right, as they are charging me full rates when we have zero income, but once we're open the 75% discount applies. No backdating permitted. Seems very odd and completely goes against what the scheme was set up for. Any help/advice on this greatly appreciated.

 

[WaveJumper]

Sounds like they are splitting hairs unfortunately BR are liable (there has been a lot of case law around this topic) even whilst fitting out and it sounds like they will not grant you your RHL until business is actually under way (splitting hairs and I assume proving to them it merits the reduction) worth remembering there's a cap on the figure across all properties

 

[lesliedocherty]

Sounds like they are splitting hairs unfortunately BR are liable (there has been a lot of case law around this topic) even whilst fitting out and it sounds like they will not grant you your RHL until business is actually under way (splitting hairs and I assume proving to them it merits the reduction) worth remembering there's a cap on the figure across all properties

I read it as he has different companies for each place

 

[SHARPYWAN]

They are refusing to budge on this unfortunately. I eeven said what if we put phonelines and internet in now and take online bookings? no they said you have to be fully open to the public. Can't find anywhere any document says this, i think they're just making it up as they go along. Not really sure where to go next with it? golf course with a brown envelope perhaps

 

[Jprandss]

I would make sure you are doing some kind of trading from day one. Coffee machine at the front door? Out of a window? Excercise classes outside? (expensive) Paid tours of the building site? I would imagine you only need one booking/payment a day, maybe even none to be trading.
Handwritten signs, it doesn't matter. Only open for half an hour a day? Doesn't matter.
There are many clothes shops that have days and even weeks without a customer, which are certainly trading businesses.

Just be able to show them that you are attempting to trade.

 

[SHARPYWAN]

This is still ongoing....council now taking me to court for non payment. I have read every document i can find on the RHL 75% discount scheme, and i've found nothing that clearly states you can't qualify for it whilst you're in the process of setting the business up. Any advice or evidence either way would be greatly appreciated. many thanks

 

[eteb3]

i've found nothing that clearly states you can't qualify for it whilst you're in the process of setting the business up

Business Rates Relief: 2025/26 Retail, Hospitality and Leisure Scheme

This guidance is intended to support billing authorities in administering the 2025/26 Retail, Hospitality and Leisure Business Rates Relief Scheme.

www.gov.uk

1. Hereditaments that meet the eligibility for Retail, Hospitality and Leisure scheme will be **occupied hereditaments** which meet all of the following conditions **for the chargeable day**:

a. they are wholly or mainly **being used**:

i. as shops, restaurants, cafes, drinking establishments, cinemas or live music venues,
ii. for assembly and leisure; or
iii. as hotels, guest & boarding premises or self-catering accommodation,

As always, it’s the occupation on the chargeable day that counts, not any planned occupation.

 

[SHARPYWAN]

Business Rates Relief: 2025/26 Retail, Hospitality and Leisure Scheme

This guidance is intended to support billing authorities in administering the 2025/26 Retail, Hospitality and Leisure Business Rates Relief Scheme.

www.gov.uk

1. Hereditaments that meet the eligibility for Retail, Hospitality and Leisure scheme will be **occupied hereditaments** which meet all of the following conditions **for the chargeable day**:

a. they are wholly or mainly **being used**:

i. as shops, restaurants, cafes, drinking establishments, cinemas or live music venues,
ii. for assembly and leisure; or
iii. as hotels, guest & boarding premises or self-catering accommodation,

As always, it’s the occupation on the chargeable day that counts, not any planned occupation.

We were in occupation building the play centre for 4 months. Although not open to the public, we were in occupation

 

[eteb3]

But the nature of the occupation was not eligible: the hereditament was *being prepared for use* as X, it was not *being used* as X.

The guidance specifies further:
“Hereditaments that are being used for the sale of goods to visiting members of the public”

If the public aren’t able to visit and buy goods, the hereditament isn’t eligible.

 

[SHARPYWAN]

But the nature of the occupation was not eligible: the hereditament was *being prepared for use* as X, it was not *being used* as X.

The guidance specifies further:
“Hereditaments that are being used for the sale of goods to visiting members of the public”

If the public aren’t able to visit and buy goods, the hereditament isn’t eligible.

I still don’t think it’s crystal clear, no reference to whilst building to be on leisure facility. I feel councils could easily decide to grant the discount using their own powers of discretion

 

[eteb3]

I can’t see what’s unclear about it myself. “Being used” is a present participle to indicate the use carried on on the chargeable day. Which, is always the test in rating.

If I was *planning* to turn a warehouse into a mosque, even if I was in the act of fitting it out, it would not be exempt as a place of public worship while I did: The public would have to be able to actually come and worship in it. The day they can is the day it’s exempt

Maybe councils have some discretion, I’m not sure, but have you seen their balance sheets?

 

[Nathanto]

I still don’t think it’s crystal clear, no reference to whilst building to be on leisure facility.

Being blunt I think you need to take a step back and look again; it is crystal clear.

Your property was not "being used wholly or mainly" for anything as it was still being setup, ergo it was not eligible for RHL relief. As @eteb3 already said, "being used" is simply not the same as "will be used".

You were given some suggestions last year on how you may have been able to get around this (e.g. very limited trading from day one) but I'm guessing you didn't action this so that ship has now sailed.

I really think you need to switch to damage limitation mode and try to negotiate a payment plan with the council before legal costs and fees make the original business rates look like pocket change...