09 February 2007 David hanson announces regional rate poundages for 2007/2008
This year’s Domestic Regional Rate is the first to use the new capital values which require a change in the way the tax rate is expressed.
Finance Minister David Hanson explained why the reforms are being introduced and what this particular change means.
He said:
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The new system re-distributes the rate burden in a much fairer way and is of particular benefit to households in less prosperous areas. Those who find themselves having difficulty paying their rates will have access to a carefully thought-out range of reliefs to help them cope”.
The Minister was speaking following the laying of the Rates (Regional Rates) Order (Northern Ireland) 2007 at Westminster on Thursday, 08 February 2007. The Order contains details of the Domestic and Non-Domestic Regional Rate poundages for 2007/2008.
He said:
“
On 14 December 2005, at the launch of the Revised Priorities and Budget for 2006/2008, Peter Hain confirmed the Government’s plans for the Regional Rates for Northern Ireland."
The Minister indicated that the Domestic Regional Rate has been fixed at 0.3608 pence, the equivalent of a 6% increase on last year. The Non-Domestic Regional Rate has been fixed at 29.10 pence, up 3.3%.
He went on to say:
“The change in the regional rate poundage will result in more than £20million in additional investment in public services over the coming financial year. In particular it will allow for further investment in the Children & Young People Funding Package including enhanced early years provision and child protection as well as improved support for children with special needs and disabilities. In addition, the revenue will contribute to the increase in pupil funding for schools announced by Maria Eagle in January.
“The additional regional rate income will also support improvements in the provision of local public services more generally, for example, enabling continued progress in reducing waiting times for hospital treatment as well as improved standards of care.”
The Regional Rates Order that fixes these figures is routine and simply implements the rate increases announced in the budget.
NOTES TO EDITORS:
The current rating system is based on outdated rental values and from April this year the government is reforming the system to distribute the rating burden among householders based on capital value. This will require a change in the way the tax is expressed and the new regional rate has been recalculated accordingly, to reflect a 6% increase for 2007/2008. In 2006/07 the Regional Rate was 198.17 pence. This year it will be 0.3608 pence to reflect the change over from rental values to capital values. This is much lower than the recent trend to help ease the transition to the new system.
In addition, the government is introducing a transitional relief scheme for all those facing the largest increases as a result of this redistribution of the rating burden. The Government is also providing a new low income relief scheme and a public information campaign will begin shortly to advise ratepayers of the details of the scheme.
Public expenditure in Northern Ireland is funded by a block grant from Westminster and the Regional Rates. The Regional Rates are struck by the Department of Finance and Personnel as a contribution towards services provided by the devolved Government Departments. They are not assigned to financing specific elements of public expenditure.
The ratepayer in Northern Ireland has a combined rate bill consisting of Regional and District Rates. District Rates are fixed by each District Council to meet their net expenditure on such functions as leisure facilities, economic development and environmental matters. District Rates vary from District to District reflecting the rateable resources and spending policies of individual Councils.
The Regional and District Rates are both collected by the Rate Collection Agency and the product of the District Rates is paid over to each Council.
The full bill is not yet known as District councils have yet to strike their Rates (by 15 February 2007).
