What is a BID?

We’ve collated some frequently asked questions and answers below for your reference.

What is a BID?

A BID is a business-led and business funded body formed to improve a defined commercial area

Where did the BID idea start?

BIDs were first established in Canada and the US in the 1960s and now exist across the globe, including in South Africa, Germany, Japan, New Zealand and Australia.

How many BIDs are there in Britain?

The majority of BIDs exist in town centres, however there are increasing numbers in industrial areas, as well as commercial and mixed-use locations. There are over 200 BIDs in the UK.

The average size of a BID is 300-400 hereditaments, with some of the smallest having fewer than 50 hereditaments and the largest at 2,500.

Annual income is typically £200,000-£600,000 but can be less than £50,000 per annum or over £2 million.

How do you create a BID?

A BID can only be formed following consultation and a ballot in which businesses vote on a BID Proposal or business plan for the area.

The ballot by law is run by the local authority or outsourced by the local authority to a third party.

All businesses eligible to pay the levy are balloted.

For a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value (the value of a commercial property unit). This ensures that the interests of large and small businesses are protected.

There is no minimum turnout threshold.

Who pays and who collects the money?

The BID levy is on business occupiers ie. business ratepayers, rather than property owners. This is in line with the business rates system and differs from BIDs elsewhere in the world where the levy is on owners.

The BID levy is collected by the local authority into a ring-fenced account (called the BID Revenue Account) and passed to the BID Company for use on the projects and services set out in the BID proposal.

How much would I have to pay?

A BID is funded through the BID levy, which is a small percentage of a business’ rateable value. The majority of BIDs charge 1% of rateable value, however there are good reasons why some have opted for higher levies, particularly in locations with lower rateable values such as industrial areas.

Assuming a 1% levy, a business with a rateable value of £20,000 would pay £200 per annum.

Once a ballot is successful the BID levy is mandatory for all eligible businesses. BIDs can choose to exclude certain businesses from paying the levy (and therefore from voting in the BID ballot). Many BIDs exclude the smallest businesses and charities; some exclude certain business sectors or types of business.

BIDs are often successful at attracting funding in addition to the BID levy. They are particularly attractive to public sector grant making bodies (such as Regional Development Agencies) due to the private sector match-funding available through the BID levy. Local authorities, property owners, and businesses outside the BID area have all provided additional income for BIDs.

Is it just another tax?

No. The money does not go to the Central Government or the City Council. Funds are ONLY for the projects agreed and voted for by the participating businesses.

How do you ensure BIDs add value?

BIDs enter into baseline agreements with the local authority and other service providers which guarantee the level of service provision in the area. These ensure that any services the BID provides are truly additional.

An Operating Agreement is also entered into between a BID and their local authority governing how the BID levy monies are collected and administered and passed over to the BID.

What do BIDs actually do?

The improvements made by a BID are determined by businesses and can include core services such as additional cleansing and security or more wide-ranging projects such as recycling, business support, improved infrastructure, joint purchasing, area branding and promotion.

How long does a BID run for?

BIDs operate for a maximum of five years.