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Chapter 3 – ESG and Business Improvement Relief

As we embark on our ESG month in April, the month in which World Earth Day falls, our Rating Diary this month has a green focus.

When talking about ESG in the context of business rates, we are typically referring to businesses that align their operations and practices with ESG principles. While ESG principles themselves don't directly alter the calculation or structure of business rates, they can influence how businesses approach the rates liability and their overall strategy.

Aspects of ESG and business improvement relief do coincide, as outlined by the Government introducing exemptions for eligible plant and machinery used in an onsite renewable energy generation and storage. Additionally, a 100% relief applies for eligible low carbon heat networks that have their own rates bill.

The business improvement relief supports businesses to invest in their property. The new relief came into effect from 1st April 2024 and will apply to works completed by 31st March 2028.  Any improvement you make must increase the rateable value of the property.

You don’t need to specifically apply for improvement relief, as the VOA ought to automatically notify your council if they become aware you have made a qualifying improvement to your property.

If you qualify, the VOA will send a certificate to you and your local council confirming:

The new Rateable Value for the property.

The amount of Rateable Value to which improvement relief may apply.

When the relief ought to expire.

Furthermore, construction that increases the floor area of the property like extensions and works that otherwise improve installation of air conditioning or other rateable plant and machinery, may also qualify for this relief.

The ratepayer must be in occupation of the property on each day since the works commenced to qualify for the relief. The relief will therefore not apply where a landlord improves a vacant building. Additionally, improvements to existing features or equipment do not qualify.

Understanding the process of what this relief is and who may qualify, requires a thorough review and discussion. The SHW Rating team can provide advice as to whether works being undertaken may qualify for relief.  If you’re thinking of ways to improve your property, you want to know more about this relief or if you have any questions relating to the business rates…please contact Kierran Celestine.