Non-domestic rate discretionary relief policy
To seek approval for the adoption of policy and process relating to applications for discretionary rate relief.
Prior to the creation of Wiltshire council, each district council had its own set of policies and guidance on the application of rate relief. In December 2008, local businesses were informed that discretionary rate relief would stay the same for 2009-2010 but that it would be reviewed during that period along with hardship relief. In fact the review has taken longer than expected and hardship rate relief forms the first part of the review of all discretionary relief awarded by Wiltshire Council. This report focuses solely on discretionary rate relief.
- The main provision conferring the current discretionary power on billing authorities to grant rate relief is Section 47 of the Local Government Finance Act 1988. Under this provision billing authorities have discretion to grant rate relief to certain ratepayers from all or part of the non-domestic rates payable.
It must be noted that non-domestic rating regulations, which cover rate relief, are subject to change on a frequent basis. Non-domestic property is also re-valued every five years which may result in subsequent amendments to the policy. The latest revaluation became effective from 1st April 2010 when legislative changes were also announced affecting small business rate relief.
- Billing authorities are obliged to award mandatory relief to charities and other philanthropic or educational establishments, amounting to a maximum of 80% of the rates due in accordance with criteria set down in case law. Authorities also have the discretion to grant relief of up to 100% to ratepayers who qualify for mandatory relief. In cases where only discretionary rate relief is awarded, 75% of the cost of the discretionary relief is met by Central Government, with the billing authority meeting the remaining 25%. Where a charitable or philanthropic organisation receives mandatory rate relief the Billing authority may award a further discretionary top-up. The Billing Authority will meet 75% of any top-up award.
- Guidance on the 1988 Local Government Finance Act states that although authorities may adopt rules for the consideration of discretionary cases, they should not adopt a blanket policy either to give or not to give relief: Each case should be considered on its own merits and the application process kept as simple and streamlined as possible to enable decisions to be made quickly, but also in relation to other grants and funding made available by the council, requiring consultation on awards with the Head of Strategy, Community and Voluntary Sector Support.
Such businesses can also be considered for rural rate relief and each is treated on its merits by reference to the contribution and importance of the business to the local community.
It is agreed that qualifying businesses should be considered for discretionary relief based on a judgement of their contribution to the local community by the authorised officer (Head of Service). Representations made by the Head of Strategy, Community and Voluntary Sector Support will be taken into account.
Other types of business rate relief such as Small Business Rate, and Partial Occupation reliefs only require a decision as to whether a relief applies or not.
Every application will trigger a review of the applicants options to other more cost effective reductions before discretionary relief.
It is agreed that all existing reliefs be monitored and reviewed on a regular basis and that any relief awarded is reviewed after a maximum of 24 months.
The rule of backdating in discretionary cases is that an application received by 30th September in any year can be backdated to 1st April in the year the application was received.
The council could therefore receive applications in the first half of 2010/11 which could go back to 1st April 2010.
It is agreed that the above ruling is applied to any request for backdating.
Every recipient of discretionary rate relief has had two years notice (or protection), that the scheme will be subject to amendment and harmonisation as a result of the unification of Wiltshire council. It is intended that any change in policy will be effective from 1st April 2011 however there is a risk that any change in the council's policy framework could potentially disadvantage local businesses or organisations.
If a review is conducted during 2010/11 and it is decided to withdraw or reduce relief, then notices have already been served before 31st March 2010 for such a withdrawal or reduction to have effect from 1st April 2011.
The provision of discretionary rate relief has the potential to help safeguard services within rural communities. This should reduce the need for residents to travel outside their village or town to avail of services like post offices, petrol stations etc. If rate relief is not recommended emissions per head of population within the County (NI 186) could increase, as residents might need to travel further to use services.
A pilot equality impact assessment has been carried out and this policy has been determined of medium relevance. An impact assessment will therefore be carried out within the next six months.
The policy framework recommended above will ensure an equality and consistency of award for discretionary rate relief across Wiltshire.
The protocol at Appendix 1 ensures that the consideration and decision-making processes, which will be applied to all applications, are transparent and fair and accord with Government guidance. The process also provides unsuccessful applicants with an appeal mechanism. Any challenge to the decision of the Appeals Panel would be by way of judicial review in the High Court.
Taking all of the above into consideration, it is imperative that Wiltshire council adopts a considered policy and mechanism by which it awards discretionary rate relief in order to support the development of resilient communities and a sustainable economic base. The Cabinet is therefore recommended to approve the proposals set out in this paper and its appendices.
- Kindred organisations are non-profit or voluntary organisations, and they are entitled to receive mandatory relief equating to 80% of the business rates that would otherwise apply. (The full cost of Mandatory Relief is met by Government)
- Leisure Trusts and Hybrid Trusts are not-for-profit making distributing organisations (NPDO), which may or may not have charitable status
- At the discretion of the council they may receive up to 100% discretionary relief
- It is agreed that those organisations not in receipt of mandatory relief should be considered for discretionary relief and that all such requests should then be considered in accordance with the following guidelines
- The council has discretion over the award of rate relief to such premises, but it should be recognised that an award of relief on a sports club, including the bar, could potentially disadvantage other licensed premises
- It is agreed that any club that has an RV in excess of the limit for small business rate relief (18,000) does not qualify for discretionary rate relief, on the grounds that the bar facilitates income generation and should be run to support the financial well being of the club. Where the RV is less than 18,000 and the club has a bar then the relief will be limited to 50% of the rates payable. The council will encourage all sports clubs to attain Community Amateur Sports Club (CASC) status and thereby secure themselves 80% mandatory relief
Charity shops qualify for 80% mandatory relief provided that they:
- Are only occupied by a registered charity
- The charity utilises the profits from sales for the purpose of that charity
- The charity sells primarily donated goods
It is agreed that qualifying charity shops be granted 80% mandatory relief.
As a result of the merger to one council there are a wide range of "other organisations" who have been awarded varying percentages of relief. These include village halls, youth organisations, museums, local social welfare and cultural organisations and nursery schools.
It is agreed that all existing cases receiving both mandatory relief and or discretionary relief must reapply for a discretionary relief and 20% top up. Top up relief attracts a 25% government subsidy.
Cases that receive less than 100% relief in total should be dealt with as follows:-
- Where there are instances of similar organisations currently being granted different levels of relief, then all such organisations should be reconsidered as a whole to ensure a consistency in approach
- All such cases should be considered on their merits by the authorised officer(s) to ensure that a fair and consistent approach is applied. Representations made by the Head of Strategy, Community and Voluntary Sector Support, will be taken into account in the decision making process
- That the introduction of this new scheme coincides with a review of all current recipients through their re-application for relief before January 2011
The council may award rural rate relief to qualifying businesses in designated rural settlements (settlements identified with a population of less than 3000).
Qualifying businesses include:
- Post offices
- Food shops with a rateable value of less than £8,500
- The only public house
- The only petrol filling station in the designated rural settlements with a rateable value of less than £12,500
In all three scenarios 50% mandatory rural rate relief should be applied in the first instance.
It is agreed that qualifying businesses operating within designated rural settlements who receive mandatory rural rate relief should also be considered for the award of discretionary rural rate relief.
It is further agreed that a regular review is undertaken of qualifying rural settlements every five years and in line with revaluation to ensure that they do not exceed the population threshold.
Post Offices are an important component of many local communities, and particularly so in rural areas.
Qualifying Post Offices, in designated rural areas with an RV of less than 8,500 are eligible for 50% mandatory rural rate relief. However the Council can also apply an additional 50% discretionary relief if it considers such an award appropriate.
It is agreed that qualifying Post Offices should be considered for 50% discretionary relief in all cases.
Some larger rural Post Offices do not qualify for mandatory rural rate relief consideration because their rateable value exceeds the current limit of £8,500, and it is further agreed that in these cases they should be considered for discretionary rate relief.
Village stores with a rateable value of less than £8,500, filling stations and pubs with a rateable value of less than £12,500, are eligible for 50 % mandatory rate which is borne by the business rate pool.
The council can also apply an additional 50% discretionary relief if it considers such an award appropriate.
It is agreed that qualifying village stores, filling stations and pubs should also be granted 50% discretionary rate relief.
Appendix 1: Discretionary rate relief application and assessment protocol
- As a pre-requisite to applying for relief, every applicant must complete an application form
- The Revenues and Benefits (R&B) team will issue and collate all new and reapplications for discretionary rate relief. The protocol will ensure that all applications can be tracked and ensures that all relevant information is gathered. The application form will state the obligations on the applicant to make available relevant information e.g. applicants will be required to provide a minimum of 2 years accounts and details of charitable status
- Should an inspection be needed this will be carried out by a the local rating expert from the R&B team (if required) to guide the applicant through technical aspects of discretionary relief or other and more appropriate reliefs, like Small Business Rate Relief
- In the unlikely cases where the local rating expert does not consider the application to be appropriate, that the business is actually in hardship, or it cannot meet the obligations for application (e.g. no accounts information), then the business will be referred to Business Link for advice and support and consideration given to hardship relief rather than discretionary relief
- The rate payer will submit their application to the R&B team
- The Local Rating expert will provide an assessment report to the R&B Management Team to assist with the decision making process
- In order to process applications, whether that be bulk renewals or new or rolling renewals, quickly and in a consistent and fair manner Assessment Panel will meet on a monthly basis. The Discretionary Rate Relief Assessment Panel will comprise representatives from R&B and the Wiltshire COMPACT. In the case of large or contentious applications, a representative from the Spatial Planning Team will also be included. The R&B team will circulate the completed applications and assessment reports to panel members a week before the meeting.
- The panel will meet and review each application and make recommendations for its approval or rejection based on the impact that supporting or not supporting the application will have on the benefits to local rate payers.
This will include:
- The impact of the loss of the business or organisation on the least resilient and most vulnerable communities
- The impact on local supply chains
- Whether the business or organisation has been responsible for contributing to the development of value added skills
- The contribution to local distinctiveness
- Whether rate relief would lead to displacement of production or employment or loss of key service or community facility
- For applications for rate relief of less than RV £18,000, the Head of Revenues at Wiltshire council, in consultation with the Head of Revenues and Benefits, will determine the application
- For applications for rate relief in excess of £18,000, the decision whether to make an award will rest with a Chief Finance Officer
- In all cases, discretionary rate relief would be granted for a maximum of 24 months
In cases where applications for rate relief have been rejected and the rate payer appeals, an Appeals Panel will consider the appeal. The Appeals Panel will comprise 3 members drawn from the existing Appeals Committee. The decision of the Appeals Panel will be final.
- For applications which are under the delegated limit of RV£18,000, the target for notification of award/rejection to be received within a maximum of 5 weeks of the application being received by Wiltshire council
- For applications referred to The Head of Finance, the target for notification of award/rejection to be received within a maximum of 6 weeks of the date of the first Hardship Rate Relief Assessment Panel meeting
- For appeals, the target for notification of award/rejection to be received within 6 weeks of the appeal being received by Wiltshire council
On a yearly basis, the Revenues Service will report on the number and progression of discretionary rate relief applications and awards in conjunction with any hardship issues being raised in their economic strategy development and review programme for Wiltshire and through Wiltshire COMPACT.