Renewable Installations Business rates

DaveGrohl

Member
Mixed Farmer
Location
Cumbria
They contacted me and billed from date of commissioning. I think the local councillor may have tipped them off!!
I just assumed that because the council had granted us planning that they'd be in touch in due course. This sounds like a positive aspect of non-joined-up govt that I can get on board with :)
 

Still Farming

Member
Mixed Farmer
Location
South Wales UK
I just assumed that because the council had granted us planning that they'd be in touch in due course. This sounds like a positive aspect of non-joined-up govt that I can get on board with :)
The valuation office works it out The council collects it .
The one dont speak to the other they just enforce their bits to the bigger picture ??
 
So what is defined as ratable?

Pv on a farm generating power for farm use? What about if some of the power is sold to tenants?

Same with biomass. Heat generated for use in farm house, office and Grainstore? What if some is sold to tenants also?

Sounds like a grey area to me :scratchhead:
 

PhilSL

Member
Trade
Location
Manchester
We have looked into this as an energy consultancy, and it's a minefield.

Historically Local authorities collected business rates and sent it to central Gov. Now LA's only send some of the business rates to central Gov and keep some, but the LA's now keep all of the business rates on renewable energy installations. Most will just keep the 'new' additional tax revenue!
 

Bob

Member
Location
Co Durham
We have looked into this as an energy consultancy, and it's a minefield.

Historically Local authorities collected business rates and sent it to central Gov. Now LA's only send some of the business rates to central Gov and keep some, but the LA's now keep all of the business rates on renewable energy installations. Most will just keep the 'new' additional tax revenue!

do you know on what grounds the Valuation Office are seeking 3 fold increases in rates on medium wind turbines?. There is a wind 5MW wind farm 2 miles from me and their Rateable Value seems to be getting cut next April by 20%???

Have contact Valuation Agency today took half an hour to get through, Lady says she has never come across this and someone is going to contact me within 10 working days to discuss
 

PhilSL

Member
Trade
Location
Manchester
do you know on what grounds the Valuation Office are seeking 3 fold increases in rates on medium wind turbines?. There is a wind 5MW wind farm 2 miles from me and their Rateable Value seems to be getting cut next April by 20%???

Have contact Valuation Agency today took half an hour to get through, Lady says she has never come across this and someone is going to contact me within 10 working days to discuss

No, everyone I have spoken to today from renewable funders to major installers can't make head nor tail of it!

It has been on the cards for some years though!!

It does seem from an industry perspective, and endusers perspective, that it's usual Gov - give with one hand and take much more with the other!!!

As a consultancy we are talking with a respected Business Rates Valuations independent company that handles appeals as a few of our funders have asked us to look into the situation.

Here is some text from an article written last year by David Hunt, Head of the Renewable Energy Association;

As usual last week I had the privilege of chairing the REA’s (Renewable Energy Association) Onsite Renewables sector group meeting at Eversheds in London. As you would expect much of the discussion and information sharing was in relation to the comprehensive FIT review that is underway, and RHI budget. Both significant, but not the lead ‘stories’ of the day. Given that we have a new government, new ministers at DECC and a summer recess in the offing, no real news is expected on either issue before Oct-Dec this year. Anything you hear in the meantime is likely to be just speculation, hearsay or scaremongering. Clearly at the REA we are lobbying for the FIT to continue in a viable fashion, and for RHI budgets to be confirmed to 2020, as ‘promised’ by the last coalition government. But as I say, for now that is a waiting game.

Of more concern to those present, and course to anyone with any interest in the UK solar market, be they manufacturer, developer, installer or distributor, is the ‘news’ that business rates will start to affect the ROI of solar (and all renewable) installations on most commercial properties, including solar farms, wind farms and district heating systems. This is something that many will have been aware of, it’s been mentioned a reasonable amount in many circles. Having said that many people have been, and are blissfully unaware.

The Good News

In the last couple of years there have been changes to the way business rates are collected, previously they had been collected by Local Authorities (LA’s), but ALL income sent directly to central government. More recently changes have been made that LA’s can keep some of the income, but importantly they are able to keep ALL income from business rates on renewable energy installations. Why is that good, clearly if the LA is going to get the income, they should be incentivised to allow planning consent. The other good news is that this only applies to 50kwp + systems.

The Bad News

Who has factored in annual business rate costs into their ROI and payback calculations for their customers? Not many I’m sure, if any. When experts in the field are still unsure exactly how calculations will be made how could you? The mechanisms for calculating the rateable value are the same as have been used for many years to value land, buildings, plant and rateable assets. Clearly they were not designed for renewable installations with high capital cost, and FIT, ROC or RHI support, all of which is included in the calculation. Presently a rate of £8,000 PA per MW capacity seems typical, though with changes to all business rates (from 2008 to 2015 baseline costs) that could, according to a Partner of GeraldEve rise to £20,000. The rates are likely to be owed by the owner/operator of the asset, so if you have provide a ‘free’ system on a PPA then that means you! Again there is some uncertainty as to who owes the money if the electricity is used exclusively on site. The long is short is there are many unknowns as to how this will play out, but one thing is for sure, with LA’s desperate for income, they are increasingly onto this income stream. The other thing is that any business rates deemed payable can be backdated to 2010. A nasty surprise to many an owner/operator of solar or other renewable assets.
 

Jim Pace

Member
Just had a Business Rate assessment from the Valuations Officer. I have also been informed that because of the assessment I can no longer claim Small business Rate relief on the first Installation

Has anyone appealed any of these in regards to renewables ?
Hi- I doubt that there is much point in appealing. they are pretty standard numbers applied and the evidence is on their side. Also the April 17 list has only just come out, and i expect an appeal would take many months or even an year to be heard. is the ownership of both turbines the same? As I understand it, you could hold one and your wife the other, or you could introduce a company to own one. That would be two separate legal entities and so two sets of small business rates relief. We hold our turbines in separate companies partly for this reason. Hope this helps.
Jim
 

f0ster

Member
when you register a biomass installation or a pv installation they need a rates bill but being a farm that is rates exempt you cannot get a rates bill so we contact the local council and they provide a letter confirming it is a farm and as such rates exempt,
 

PhilSL

Member
Trade
Location
Manchester
....unless they can use all of the produced energy all of the time.

Not strictly true...here's an extract from an article of Nov 2016:

'In particular, it says ambiguity must be resolved around what exceeds the de minimis (minor use) allowance for non-agricultural use of the energy generated.

The threshold is currently around 5%, which means that if more than 5% of electricity is exported or used for non-agricultural uses the whole installation is likely to be liable for business rates.'

And this footnote speaks volumes.....
'The Solar Trade Association recently signed an agreement with the VOA which means most solar systems exporting to the grid, or via a Power Purchase Agreement to tenants, will see a decrease in business rates, reflecting falling costs, and lower subsidies.'

An Association fight it's own corner and still whinging and whining about tariff cuts. That set it could set a precedent for appeals for those renewable assets own by farmers and not large financial institutions?

Read the full article here, it's quite informative.

http://www.fwi.co.uk/business/farmers-urged-to-check-business-rate-changes-for-energy-projects.htm

and the latest article: Advise on Business Rates Appeals for Energy Porjects ;

http://www.fwi.co.uk/business/advice-on-business-rates-appeals-for-energy-projects.htm
 

PhilSL

Member
Trade
Location
Manchester
Hi- I doubt that there is much point in appealing. they are pretty standard numbers applied and the evidence is on their side. Also the April 17 list has only just come out, and i expect an appeal would take many months or even an year to be heard. is the ownership of both turbines the same? As I understand it, you could hold one and your wife the other, or you could introduce a company to own one. That would be two separate legal entities and so two sets of small business rates relief. We hold our turbines in separate companies partly for this reason. Hope this helps.
Jim

Good idea but you have to be aware that the rates demand can be back dated to 2010! So it's important to get the asset transfer is done in such a way which does not prompt the backdating of the business rates demand.

There's always the Charity route!! Relief of up to 80% if a property is used for charitable purposes, rising to 100% if topped by discretionary relief, if the council allows it.
 

DaveGrohl

Member
Mixed Farmer
Location
Cumbria
Just had a conversation with a friend who is usually more genned up on these things but I'm now a bit confused about these new ratings. I understood that it was the multiplier (ie say 40p in the £) that was about to go up by as much as 250% and not the rateable value of an installation. He says it's the other way round ie the rateable value will increase by 250% and the multiplier will stay the same.

I had assumed that the multiplier was set by councils and the rateable value was set by the VOA in Birmingham. I'd read that it was the individual coucils who could now set their own multiplier and it was through this avenue that they were gonna fill their boots. Does anyone know which way round this is to alleviate my confusion?
 

Bob

Member
Location
Co Durham
Just had a conversation with a friend who is usually more genned up on these things but I'm now a bit confused about these new ratings. I understood that it was the multiplier (ie say 40p in the £) that was about to go up by as much as 250% and not the rateable value of an installation. He says it's the other way round ie the rateable value will increase by 250% and the multiplier will stay the same.

I had assumed that the multiplier was set by councils and the rateable value was set by the VOA in Birmingham. I'd read that it was the individual coucils who could now set their own multiplier and it was through this avenue that they were gonna fill their boots. Does anyone know which way round this is to alleviate my confusion?

It is the rateable value set by the VOA that has increased for installations benefitting from Feed in Tariff the multiplier is set by government I think and is around 47pence to the £ depending if you qualify as a small business

My 500Kw turbines RV increased from £10500 to £31000 each from 1st April 2017 Fortunately Transitional relief applies as they had already been assessed prior to this latest valuation.

If the local authority have not caught up with you yet you will not be able to claim this relief and they will backdate to installation date .

It is just another Tax to claw back Fit payments IMO
 

HAM135

Member
Arable Farmer
It is the rateable value set by the VOA that has increased for installations benefitting from Feed in Tariff the multiplier is set by government I think and is around 47pence to the £ depending if you qualify as a small business

My 500Kw turbines RV increased from £10500 to £31000 each from 1st April 2017 Fortunately Transitional relief applies as they had already been assessed prior to this latest valuation.

If the local authority have not caught up with you yet you will not be able to claim this relief and they will backdate to installation date .

It is just another Tax to claw back Fit payments IMO


Lucky you! No transitional relief north of the border,something else to thank Sturgeon and her stooges for,we have went from £12500 to £32500,had small business relief last year now nothing.
 

SFI - What % were you taking out of production?

  • 0 %

    Votes: 80 42.3%
  • Up to 25%

    Votes: 66 34.9%
  • 25-50%

    Votes: 30 15.9%
  • 50-75%

    Votes: 3 1.6%
  • 75-100%

    Votes: 3 1.6%
  • 100% I’ve had enough of farming!

    Votes: 7 3.7%

Red Tractor drops launch of green farming scheme amid anger from farmers

  • 1,293
  • 1
As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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