Discounts, exemptions and reliefs
Retail, Hospitality and Leisure Relief Scheme 2025-26
At the Autumn Statement on 30 October 2024 the Chancellor announced an extension to the Retail, Hospitality and Leisure Relief scheme into 2025-26. It will continue to provide eligible, occupied, retail, hospitality and leisure properties with a 40% relief, up to a cash cap limit of £110,000 per business.
The relief will end on 31 March 2026.
Who can benefit from Retail, Hospitality and Leisure Relief?
Hereditaments that will benefit from the discount will be occupied and are wholly or mainly being used:
- As shops, restaurants, cafes, drinking establishments, cinemas and live music venues
- For assembly and leisure; or
- As hotels, guest & boarding premises and self-catering accommodation
Find out more about the scheme including a detailed list of eligible and illegible hereditaments.
How it is awarded
Southampton City Council will, for the 2025-26 financial year:
- Automatically award this relief to businesses that it does consider will be eligible for this scheme
- Withhold this relief where it is likely that the business ratepayer will breach the cash limit
If you have not received the award but believe you are eligible
If your business has not automatically been awarded this relief, and you are of the opinion that it does meet the qualifying criteria, please contact business rates.
Opting out
If you do not wish to accept the Retail, Hospitality and Leisure Relief, you can opt out by contacting business rates. Please note that you cannot withdraw your refusal for either all or part of the full financial year.
Cash caps
In line with the conditions set by the Government, a ratepayer may only claim up to £110,000 of support under the 2025-26 Retail, Hospitality and Leisure Relief Scheme for all of their eligible hereditaments. This cash cap applies at a Group company level (so holding companies and subsidiaries cannot claim up to the cash cap for each company). It also applies to organisations which, although not a company, have such an interest in a company that they would, if they were a company, result in its being the holding company.
Furthermore, the Retail, Hospitality and Leisure Relief Scheme is subject to the Minimal Financial Assistance limits under the Subsidy Control Act. This means no recipient can receive more than £315,000 over a three-year period (consisting of the current financial year and the two previous financial years). Covid business grants received from local government and any other subsidy claimed under the Minimal Financial Assistance, or Small Amounts of Financial Assistance limit over the three-year period, should be counted.
Therefore, to claim the Retail, Hospitality and Leisure relief you must not exceed the £110,000 cash cap for 2025-26 or the Minimal Financial Assistance limit of £315,000 over three years (including 2025-26). See further details of the cash cap and subsidy control.
If you have exceeded the £110,000 cash cap for 2025-26 or the Minimal Financial Assistance limit, or you are not eligible for this relief for any other reason, you must let us know immediately. Contact business rates.
The Government and Southampton City Council does not tolerate the falsification of records or the providing of false evidence to gain this discount. This includes the claiming of support above the cash cap or the exemption threshold. A ratepayer who falsely applies for any relief, or provides false information or makes false representation in order to gain relief may be guilty of fraud under the Fraud Act 2006.
Unoccupied Property Rating
Business Rates will not be payable in the first three months that a property is empty, or six months in the case of industrial properties. After this period, rates are payable in full. However, there are certain exemptions from the empty charge which include listed buildings and properties with a rateable value of less than £2,900.
Exemptions
The following will remain subject to a zero rate when empty if:
- The property has a rateable value of less than £2,900
- Occupation prohibited by law
- Vacant due to action taken on behalf of the Crown
- Subject to building preservation notice – listed building
- Included in schedule of monuments as compiled under Ancient Monuments & Archaeological Areas Act 1979(b)
- Owner entitled to possession only in his capacity as personal representative of a deceased person
- In respect of owner’s estate there subsists a bankruptcy order
- Owner entitled possession as trustee under deed of arrangement
- Owner is a company subject to winding-up order under the Insolvency Act 1986 or being wound up voluntarily under that act
- Owner in administration or subject to administration order
- Owner entitled to possession in capacity as liquidator
Exemption will also be approved where the ratepayer is a charity or trustee for a charity and it appears that when next in use the property will be wholly or mainly used for charitable purposes.
The same applies where the ratepayer is a registered club and it appears when next in use it will be wholly or mainly used for the purposes of that registered club or clubs.
Partly occupied property relief (section 44a)
Where part of a property is unoccupied for a short time, the Council has the discretion to award rate relief for the unoccupied part of the property. The Council must ask the District Valuer to apportion the rateable value between the occupied and unoccupied parts for the current financial year. For this to happen the occupied and unoccupied areas must be clearly defined and separately identifiable.
In order to be considered for the relief the following criteria must be met:
- Any empty period of a hereditament in a rate year must be for a minimum of one month. Any periods less than this will not be considered for this relief
- The relief is only intended to be used where a property is temporarily not used or its use is temporarily reduced. S44a relief will not be awarded in respect of partly occupied property where the partial occupation of the property may be considered to arise due to the ordinary day to day nature of the business (for example the operation of a warehouse)
- The relief will be awarded for a maximum of three months (or six months in the case of industrial hereditaments). The relief will end after that period, at the end of the financial year, or when the unoccupied area becomes occupied, whichever comes first
The relief is intended for use where there are practical difficulties in occupying or vacating a property in one operation. Applications will not be considered for retrospective periods.
The relief will not be awarded where it has not been possible for the Council’s Property Inspector to verify the circumstances stated in the application. S44a relief is not intended where a property is partly occupied due to refurbishment.
All guidance provided by the Ministry for Housing, Communities and Local Government (or their previous incarnation) will be considered. Please submit any requests for this relief by email to the Revenues Section at Business.Rates@Southampton.gov.uk.
Please provide full details on the date of vacation of the relevant part of the property, the reason for the vacation and provide plans for the property clearly showing the occupied and the empty parts of the property.
Business rates – transitional relief scheme
The government has provided a Transitional Relief Scheme to phase in any increased rates charges due to Revaluation 2023. The relief does not apply to increases due to changes to the property after the revaluation date, 1 April 2023. Any Transitional Relief will be shown on your bill if it applies.
The transition scheme for Revaluation 2023 limits bill increases to the following percent plus inflation (the government has set inflation at 0% for 2023/24 transition purposes):
| Rateable Value | 2023/24 | 2024/25 | 2025/26 |
|---|---|---|---|
| Small < £20,000 | 5% | 10% | 25% |
| Medium £20,000 to £100,000 | 15% | 25% | 40% |
| Large > £100,000 | 30% | 40% | 55% |
Example: Medium Rateable Value (RV) increase
- 31/03/23 RV = £20,750
- 01/04/23 RV = £37,500
2023/24 year one
- Base Liability (BL): £20,750 x 49.9p (2022/23 small business multiplier) = £10,354.25
- Appropriate Fraction (transition limit & inflation)(AF): 1.15 + 0% = 1.15
- Notional Chargeable Amount (NCA): £37,500 x 49.9p (2023/24 small business multiplier) = £18,712.50
- Transition = (BL x AF) – NCA = £11,907.39 - £18,712.50 = -£6,805.11
2023/24 bill
- Gross Charge £18,712.50
- Transitional Relief -£6,805.11
- Amount Due £11,907.39
2024/25 year two
- BL: £11,907.39
- AF: 1.25 + 2%* = 1.275
- NCA: £37,500 x 50.9p* = £19,087.50
- Transition = £15,181.92 - £19,087.50 = -£3,905.58
*using hypothetical 2% inflation
2024/25 bill
- Gross Charge £19,087.50
- Transitional Relief -£3,905.58
- Amount Due £15,181.92
