How BIDS are set up and operate
The BID proposer can be any non domestic ratepayer, property owner, local authority or other key stakeholder with an interest in the BID area.
The BID proposer is then required to develop a proposal and submit this to the local authority, along with a business plan. The proposal should set out the services to be provided and the size and scope of the BID. It will also set out who is liable for the levy, the amount of levy to be collected and how it is calculated.
The BID proposer or body will then ballot potential business members and is required to meet two tests: more than 50% of votes cast must be in favour of the BID and the ‘yes’ vote must represent more than 50% of the aggregate rateable value of votes cast. If this happens, the BID company is established and the BID levy, the primary funding mechanism, becomes mandatory on all defined ratepayers and is enforceable as per business rates collection. The local authority manages the ballot process.
Who pays the BID levy?
BID levy rules vary between BIDs and must be set out in the proposal document businesses were balloted on, covering who is liable for the levy, the amount of levy to be collected and how it is calculated.
The proposal will also provide details of any relief from the BID levy that may apply and who is eligible. The amount and type of relief is dependent on local circumstances but could typically include charity relief.
How long will a BID last?
The maximum term is 5 years. Once the term is completed the BID will automatically cease. If the BID company wishes to continue its activities it must hold a new ballot (commonly referred to as a renewal ballot).
Who manages the BID?
A BID is managed by a Business Improvement District body, this is often a private company and most are not-for-profit companies.
The BID body is responsible for developing and implementing the proposal which sets out how the BID will operate. They will provide the local authority with this proposal along with the business plan (including the estimated cash flow and predicted revenue to be generated by the BID levy along with the financial management arrangements).
The local authority will manage billing and the collection of the BID levy, holding the levy in a ring-fenced revenue account on behalf of the Business Improvement District body.