Renewable Energy Generation Rate Relief: A Slight Relief?
Last year we commented on the change made to this relief which significantly restricted it to:
- sites (producing heat or power from biomass, biofuels, fuel cells, photovoltaics, water, wind, solar and geothermal sources) where there are arrangements in place entitling at least one community organisation to at least: (a) 15% of its annual profit or (b) an amount of the annual profit as is attributable to 1MW of the total installed capacity of the project in respect of which reductions of between 2.5% and 100% in business rates could still be obtained depending on the rateable value (see table undernoted); and
- new qualifying projects (i.e. those which were first entered onto the valuation roll for rates’ purposes on or after 1st April 2016) which attracted a lesser reduction of 10% where the value of the relevant land is £500,000 or less and 1.5% in any other instance.
New regulations which took effect on 1st April 2017 have slightly improved the relief in both scenarios as follows:
- in relation to the first scenario as set out at 1 above, the relevant amount of annual profit for community organisations has been reduced from 1MW to 0.5MWs of the total installed capacity of the project; and
- for new qualifying projects, an additional relief has been introduced whereby sites used solely for the generation of renewable heat or power (or both) from water (including waves and tides but excluding production from the pumped storage of water) having a total installed capacity of up to 1MW can obtain a 25% reduction from business rates.
If you would like to learn more about these changes or have any questions then please contact Laura Tainsh in our renewables team on 0131 625 9191.
|Up to £145,000||100%|
|£145,001 to £430,000||50%|
|£430,001 to £860,000||25%|
|£860,001 to £4million||10%|
|More than £4million||2.5%|