What
is Non Domestic Rating (Business Rates)
How
it all began…
The
Origin of ‘National Non Domestic Rates’ (NNDR)
can be traced back to the Elizabethan Poor Law of 1601
In
1598, under Elizabeth I, the ‘Acte For the Reliefe
of the Poore’ was passed, requiring every parish
to appoint Overseers of the Poor who were responsible
for:
- Finding
work for the unemployed, and
- Setting
up parish houses for those incapable of supporting themselves.
The
Act of 1601
This
‘Acte for the Reliefe of the Poore’, passed
three years later, was essentially a refinement of the
previous Act, but is often said to mark the foundation
of the Old Poor Laws. Under this Act, the responsibility
of the parish was established. It was obliged to:
- Relieve
its aged and helpless,
- Bring
up unprotected children in ‘habits of industry’,
and
- Provide
work for the able-bodied who could not work in their
usual trade.
The
Overseers, who were unpaid, were to be elected annually
by the parish vestry meeting, and they were to dispense
money and bread, and supervise the parish poorhouse. The
aims were to provide work for adults, apprentice poor
children and set them to work, and suppress and punish
beggars and vagabonds, in some cases by admitting them
to county "Houses of Correction".
Thus
every parish was a self-governing body, responsible for
its own poor people.
Overseers
were given the power to raise money by charging parishioners
according to their ability to pay. This charge, called
the Poor Rate, was originally a form of income tax, but
evolved into a property tax or "rate" based
on the value of real estate. Generally the tenant paid,
instead of the owner. Failure to pay could lead to a summons
to appear before the Justices, a fine and sometimes prison.
The
basic system is exactly the same now as it was then. If
your property was worth £100 you might have to pay
a tax (for example) at the rate of sixpence in the pound
i.e.
100
* 6d = 600 pennies (£2 and 10 Shillings)
The
Parish or Overseer determined the value of the property
and The Parish or Overseer also determined the Rate in
the Pound
1601 to 1990
Not
a great deal changed until 1990, although in 1929 ‘Rates’
became a general tax rather than a specific ‘poor
relief’ tax.
The
‘parish’ evolved into the Inland Revenue and
the Local Council.
The
Inland Revenue became responsible for the Valuation, and
the Local Authority became responsible for setting the
Rate in the Pound and collecting the tax.
The
primary legislation regarding rating was the General
Rate act of 1967
From
1990 to Date, National Non Domestic Rates (NNDR)
In
1990 Domestic Rates were abolished and were replaced by
the Poll Tax (Community Charge) which was later replaced
by Council Tax.
‘Rates’
became ‘Business Rates’ or ‘National
Non Domestic Rates’.
The
primary legislation regarding rating was the Local
Government Finance Act 1988
The
setting of the Rate in the Pound was taken away from the
Local Councils and became the responsibility of Central
Government – i.e. there would be one Uniform Business
Rate (UBR) for the whole of England. Wales would also
have their own UBR. Scotland had to wait until 1995 for
their Unified Business Rate.
How is Rate Liability Calculated?
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