Discretionary Rates Relief Policy

Transcription

1 Discretionary Rates Relief Policy

2 1. Introduction and Scope As part of its role in the administration of National Non Domestic Rates (NNDR) (more commonly referred to as business rates and referred to as such in this document), the Council has several areas where it can exercise its discretion to provide reductions to the amounts of business rates that are due to be paid. Changes to local government finance now mean that the income from business rates more directly impacts on the Council s financial position. As part of the Central Government funding process for local authorities, council s now retain 50% of all business rate income collected. Under the previous scheme, business rates income was paid into the government s central pool and redistributed back out to local authorities based on a formula grant. This policy document outlines the areas of local discretion and the Council s approach to various reliefs. This approach is cognisant of the impact on both the council s wider financial position and the Council Tax payers, and on the organisations and businesses that may apply for discounts and their role in supporting Copeland s residents, developing the borough and supporting the council in its growth and social inclusion policies. 2. Discretionary Rate Relief Scheme The Local Government Finance Act 1988 requires the Council to maintain a Discretionary Rate Relief Scheme to award business rates relief of up to 100% to certain organisations who operate within specified criteria. This includes: Charitable bodies (who receive 80% relief) the Council has further discretion to top up this relief to 100% of the rates due. Registered community amateur sports clubs (CASC s) (who receive mandatory 80% relief) the Council has further discretion to top up this relief to 100% of the rates due. Non-profit making organisations the Council has further discretion to grant standard discretionary rate relief of between 0 to 100% of the business rates due. We will invite applications from charities, CASC s and non-profit making organisations under the discretionary scheme. Applications made by agents must include written confirmation signed by the ratepayer that the application is being made on their behalf. The state aid declaration on the application form must be signed by the ratepayer. In determining applications, the Council may

3 Grant relief up to a maximum of 100% of the rates due; Grant relief for a sum less than 100% of the rates due; or Refuse any application for additional relief. 3. Charitable bodies (charities) A mandatory rate relief of 80% is granted to charities in the following circumstances: The ratepayer of a property is a charity or the trustees of a charity, and The property is wholly or mainly used for charitable purposes (including charity shops, where the goods sold are mainly donated and the proceeds are used for the purpose of the charity). Registration under the Charities Act 1993 is conclusive evidence of the charitable status. Bodies which, under the 1993 Act, are accepted from registration or are exempt charities are also eligible for mandatory relief. Provided the above criteria are met, 80% mandatory rate relief is granted. In cases where a charity is in receipt of mandatory rate relief of 80%, the Council has the discretion to grant up to 20% additional rate relief. This is called discretionary rate relief top up. The Council will consider applications for a discretionary rate relief top up from charities based on their own merits, on a case by case basis. Applications will be considered by the Revenues, Benefits and Customer Services Manager. Any decision on an application for relief will be made by the S151 officer based upon the recommendation of the Revenues, Benefits and Customer Services Manager. The principal consideration is that the relief is in the best interests of the tax payers of Copeland Borough Council, as the Council must bear a percentage of the cost of any relief granted. In determining the application, the following matters will be taken into consideration: How the charity supports and links into the Council s Corporate Strategy for the period 2016 to 2020: The purpose of the charity and the specific activity carried out within the building for which the relief is requested: Whether the charity operates at a local or national level and where appropriate, the local and national funding streams and financial position of the charity. 4. Registered Community Amateur Sports Clubs A mandatory rate relief of 80% is granted to registered community amateur sports clubs (CASC). To qualify as a CASC, a sports club must fulfil all of the following criteria: Open to the whole community;

4 Run as an amateur club; Be a non-profit making organisation; and Aim to provide facilities for, and encourage people to take part in, eligible sport In cases where a CASC is in receipt of mandatory relief of 80%, the Council has the discretion to grant up to 20% additional rate relief as a discretionary top up. The Council will consider applications for a discretionary rate relief top up from charities based on their own merits, on a case by case basis. Applications will be considered the Revenues, Benefits and Customer Services Manager. Any decision on an application for relief will be made by the S151 officer based upon the recommendation of the Revenues, Benefits and Customer Services Manager. The principal consideration is that the relief is in the best interests of the tax payers of Copeland Borough Council, as the Council must bear a percentage of the cost of any relief granted. In determining the application, the following matters will be taken into consideration (the list is not exhaustive): How the CASC supports and links into the Council s Corporate Strategy for the period 2016 to 2020: The membership and fee structure and whether the CASC is accessible to all residents, including whether there are concessions for certain groups, for example young people in education or persons of pension age; Membership numbers and the number and percentage of these members that are residents of Copeland; If the CASC has due regard to equality issues and it actively encourages membership from under-represented groups, for example minority ethnic residents, people over 50 and people with disabilities; Whether facilities are available to the wider community regardless of ability. We would also require additional financial information including: If the CASC runs a bar or food provision, the level of income from this activity and how this money is used; and Whether the CASC operates at a local or national level and where appropriate, the local and national funding streams and financial position of the CASC. Further information on CASC s may be found at or 5. Non-profit making organisations

5 The Council has the power to grant discretionary rate relief of up to 100% of the rates due to other non-profit making organisations. The relief could be given to properties used by non-profit making organisations for recreational, charitable, philanthropic or religious purposes or in connection with education, social welfare, science, literature or the fine arts. The Council will consider applications for a discretionary rate relief top up from charities based on their own merits, on a case by case basis. Applications will be considered the Revenues, Benefits and Customer Services Manager. Any decision on an application for relief will be made by the S151 officer based upon the recommendation of the Revenues, Benefits and Customer Services Manager. The principal consideration is that the relief is in the best interests of the tax payers of Copeland Borough Council, as the Council must bear a percentage of the cost of any relief granted. In determining the application, the following matters will be taken in to consideration (the list is not exhaustive): How the organisation supports and links into the Council s Corporate Strategy for the period 2016 to 2020; Whether the facilities provided include education and/or training for members as a whole or for special groups; The extent to which the facilities provided reduce the demand for Council services or produce savings to the Council; Any membership and fee structure and whether the facilities are accessible to all residents, including whether there are concessions for certain groups, for example young people in education or persons of pension age; If covered by a membership scheme, membership numbers and the number and percentage of those members that are Copeland residents; If the CASC has due regard to equality issues and it actively encourages membership from under-represented groups, for example minority ethnic residents, people over 50 and people with disabilities; We will also require additional; information including: If the organisation runs a bar or food provision, the level of income from this activity and how this money is used; and Whether the organisation operates at a local or national level and where appropriate, the local and national funding streams and financial position of the organisation.

6 6. Hardship relief The Council is able to exercise its discretion under section 49 of the Local Government Finance Act 1998 to provide either partial or full relief for non-domestic rate payments in cases of hardship where it would be reasonable to do so having due regard to the interests of Council Tax payers in general. The Council will consider applications for hardship relief from individuals and organisations based on their own merits on a case by case basis. The Council will consider applications for a discretionary rate relief top up from charities based on their own merits, on a case by case basis. Applications will be considered the Revenues, Benefits and Customer Services Manager. Any decision on an application for relief will be made by the S151 officer based upon the recommendation of the Revenues, Benefits and Customer Services Manager. Applications made by agents must include written confirmation signed by the ratepayer that the application is being made on their behalf. The state aid declaration on the application form must be signed by the ratepayer. When deciding to award hardship relief, as well as being confident that the organisation is experiencing hardship, the principle consideration will be that any relief is in the best interests of the taxpayers of Copeland, as the Council must bear the cost of any relief granted. 7. Local Business Rate Discount funded locally Section 69 of The Localism Act 2011 amends Section 47 of the Local Government Finance Act 1988 and allows Councils to grant locally determined business rate discounts (in addition to the already available discretionary rate reliefs). The new power recognises that the current business rates scheme is broadly prescribed by Central Government and its aim is to provide increased flexibility to local authorities to support organisations, recognising variations in economic conditions across and within local authority boundaries. The Council will consider applications for a discretionary rate relief top up from charities based on their own merits, on a case by case basis. Applications will be considered the Revenues, Benefits and Customer Services Manager. Any decision on an application for relief will be made by the S151 officer based upon the recommendation of the Revenues, Benefits and Customer Services Manager. When deciding to award a local business rate discount, the principle consideration will be that in granting any discount there should be a resultant substantial, positive impact for

7 residents and taxpayers in the borough, as the Council must partly bear the cost of any relief granted. Unless specifically advised by Central Government the cost of localism reliefs shared 50% Central Government, 49% Copeland Borough Council and 1% precepting authorities unless the Council has reached the national non domestic rates safety net or levy where adjustments are made to ensure billing authorities are acting prudently in setting up localised reliefs. Applications made by agents must include written confirmation signed by the ratepayer that the application is being made on their behalf. The state aid declaration on the application form must be signed by the ratepayer. The following criteria will also be taken into account when considering applications: How the organisation supports and links into the Council s Corporate Strategy for the period 2016 to 2020; Whether the organisation provides substantial and essential long term benefits to both the community and the Council Tax payer, such as increasing employment or improving amenities available to the local community; Consideration of whether there are other businesses in the area which provide the same or similar services or facilities and whether the award could have an anticompetitive effect on other businesses in the Borough 8. Local Business Rates Discount wholly funded by Central Government There are now two areas of relief that, if awarded, are fully funded by Central Government. They are: New Build Empty Property Relief, and Business Rates Reoccupation Relief. 8.1 New Build Empty Property Relief Central Government has determined that the Council can use its discretionary powers to exempt all newly built commercial property completed between 1 October 2013 and 30 September 2016 from empty property rates for the first 18 months, up to state aid limits. The Government has stated that it will be fully funding any relief granted within the agreed protocols. The Council can agree to use these powers and invites applications from organisations that meet the criteria. Determination and award of any exemption will be in accordance with the Department for Communities and Local Government (DCLG), Business Rates New Build Empty Property Guidance (September 2013). 8.2 Business Rates Reoccupation Relief

8 The Business Rates Reoccupation Relief provides a 50% business rates discount for eighteen months for businesses moving into previously empty retail premises between 1 April 2014 and 31 March 2016 up to State Aid De Minimis limits. Properties that will benefit from the relief will be occupied properties that: When previously in use, were wholly or mainly used for retail (see 8.3 below); Were empty for 12 months or more immediately before their reoccupation; Became reoccupied between 1 April 2014 and 31 March 2016; and When reoccupied, the business premises can be for any use (i.e. not just retail uses) except for properties/businesses wholly or mainly being used as betting shops, payday loan shops, and pawn brokers. There is no rateable value limit for the property in respect of either the previous or reoccupied use. However, State Aid De Minimis limits apply and will apply and may limit the amount of relief given. 8.3 Property/business previous use eligibility criteria. In relation to a premises previous use for the purposes of Reoccupation Relief, retail means (i) Properties/businesses that were being used for the sale of goods to visiting members of the public; Shops (such as florist, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licence, chemists, newsagents, hardware stores, supermarkets, etc.) Charity shops Opticians Post Offices Furnishing shops/display rooms (such as carpet shops, double glazing, garage doors) Car/Caravan show rooms Second hand car lots Markets Petrol stations Gardens centres Art galleries (where art is for sale/hire) (ii) Properties/businesses that were being used for the provision of the following services, principally by visiting members of the public Hair and beauty services (such as hair dressers, nail bars, beauty salons, tanning shops etc.) Shoe repairs/key cutting Travel agents Ticket offices e.g. theatre Dry cleaners Launderettes PC/TV/ domestic appliance repair

9 Funeral directors Photo processing DVD/video rentals Tool hire Car hire (iii) Properties/businesses that were being used for the provision of the following services principally to visiting members of the public: Financial services (e.g. banks, building societies, bureaux de change, payday loan shops, betting shops, pawn brokers) Other services (e.g. estate agents, letting agents, employment agencies) (iv) Properties/businesses that were being used for the sale of food and/or drink to visiting members of the public: Restaurants Takeaways Sandwich shops Coffee shops Public houses Bars The list set out above is not intended to be exhaustive as it would be impossible to list the many and varied retail uses that exist. There will also be mixed uses. However, it is provided by Government as a guide to the types of uses that is considers for this purpose to be retail. The Council will determine on a case by case basis whether particular properties/businesses not listed are broadly similar in nature to those above and, if so, to consider them to be retail. Conversely, properties that were not broadly similar in nature to those listed above will not be considered to be retail. 8.4 Reoccupied use The new use of the reoccupied premises can be for any use (i.e. not just retail uses) except for properties/businesses wholly of mainly being used as betting shops, payday loan shops and pawn brokers. In the context of the public debate about the cumulative impact of betting shops, payday loan shops and pawn brokers the Government does not consider it the best use of public funds to offer tax relief that would encourage and incentivise the proliferation of these types of uses. The Council supports this approach. 8.5 The Council s approach In considering the exercise of the discretion the Revenues, Benefits and Customer Services Manager alongside officers previously detailed will consider each application for relief based on:

10 The individual merits of each application taking into account whether the business property is or is not supporting the council s wider objectives and/or whether it is determined to be having a detrimental impact on neighbourhoods and communities. This is especially relevant for off licences, take away and late night food establishments, public houses and bars where applications will be considered in the context of the impact on the neighbourhood and community. The impact (as it does currently through the planning regime) of a business property designation transferring from retail use to another use. Whether the property is wholly occupied and bona fide within the spirit of guidance. Relief will not be granted where occupation of the property/business is contrived so as to mitigate the impact of the empty property charges. The description is not exhaustive and the Council reserves the right to decline an application or withdraw an award where the property and business is determined to be having a detrimental impact on the neighbourhood or community. For example, the Council would be unlikely to favourably consider an application for relief if a property/business has had their premises licence reviewed by the Council within the last twelve months. 8.6 Relief amounts Relief will be available for eighteen months from the first day the property/business becomes occupied as long as the first day falls between 1 April 2014 and 31 March 2016, subject to the property/business remaining continuously occupied. The eligibility for the relief and the relief itself will be assessed and calculated on a daily basis. Under this scheme the relief available for each property is 50% of the business rates liability after any mandatory or other discretionary reliefs (other than retail relief) have been applied, up to State Aid De Minimis limits. 8.7 Other impacts (i) Change of ratepayer The relief will run with the property rather than the ratepayer. So if a property/business is in receipt of Reoccupation Relief and a new ratepayer becomes liable for the same property they will normally benefit from the remaining term of the relief, subject to the ratepayers State Aid De minimis limits. (ii) Impact on Enterprise Zones Where a property is eligible for Enterprise Zone relief, that relief will be granted and this will be funded under the rates retention scheme by a deduction from the central share. If a property in an Enterprise Zone is not eligible for Enterprise Zone relief, or that relief has ended, Reoccupation Relief may be granted in the normal way, and this would be reimbursed by grant under section 31 of the Local Government Act Rural Rate Relief

11 The Council is required to maintain a Rural Settlement List which identifies all rural settlements within its area. A qualifying rural settlement must have a population of less than 3,000. Rural Rate Relief applies to the following types of property and is subject to the following rateable value thresholds: The sole post office or general store with a rateable value up to 8,500; A food shop with a rateable value up to 8,500 (this does not include properties where food is consumed on the premises or takeaways); The sole public house or filing station with a rateable value up to 12,500. From April 2017 it is proposed that mandatory 100% rural relief will be awarded to qualifying rural properties. 10. Part occupied [Section 44(a)] Relief Section 44(a) of the Local Government Finance Act 1988 enables the council to grant relief on business premises that are partly occupied, as long as this situation is for a short time only. The length of this period is at the council s discretion and will considered on the basis of each application for his relief. The situation must be happening at the present time, so retrospective claims cannot be considered. This is a discretionary power, and Copeland Borough council must be satisfied that the property is partly occupied before requesting a certificate of apportionment from the Valuation Office. This certificate determines the rateable value for both the occupied and unoccupied parts of the building. In order to apply for S44(a) relief, the ratepayer must put a request in writing to the council including a plan of the property clearly marking the areas that are occupied and unoccupied. A plan will also be required to show it is intended to bring the unoccupied part back into use and within what timescales. The relief will end at the expiry of the short period depending on the circumstances of the case or at the end of the financial year if that is sooner. 11. Application Process All applications for discretionary relief should be made in writing where possible using the Council s application form. The Council will also require evidence to support applications, the details of which will be provided on the Council s website. The application form will request details of any funding received in order to comply with the State Aid rules (please see paragraph 13 below).

12 The application form will require organisation to provide its last three years audited accounts unless excepted. The form will also require the organisation to evidence the level of funding given to it by the Council and/or any other external bodies. The income from the business will be calculated in accordance with the methodology detailed at Part 6 Section 4 (regulations 37 to 39) of the Housing Benefit Regulations The Council, may in exercise of its discretion, accept completed electronic versions of these forms. 12. Awards (i) Period of Award The Council will decide the period that relief will be awarded for depending on the circumstances of the application. The minimum period of relief that can be awarded is one day. Unless stated otherwise, relief will be awarded for the current financial year or until the end of the following financial year of the application where it is made between January and March. Towards the expiry date of the current award, the Council will invite a renewal claim. (ii) Changes in liability If there is a change to the organisations liability during the period of relief, the following amendments to the awarded amount will apply: Increase in liability/charge Where the liability/charge increases, the amount of the award will continue at the rate originally granted up to the appropriate renewal date. Reduction in liability/charge The amount of the award for the remaining financial year will be the required percentage of the new liability/charge. (iii) How payments will be made All relief awarded will be credited against the business rate bill. (iv) Notification The Council will inform the ratepayer in writing of the outcome of their application for relief within seven working days of making a decision. Where the application is unsuccessful, the notification will provide full reasons as to why the Council have decided not to award relief and the applicant s right to ask the Council to look at its decision again. Where an application is successful, the notification will include the following information: The period of the award; The percentage of the rate liability awarded for that period; The amount of relief to be awarded for the period;

13 Details of when an amended non-domestic rate demand will be issued (unless the bill is being issued with the decision letter); and The right to ask the Council to look at the decision again. (v) Overpayments The Council will recover all overpayments of Discretionary Rate Relief through the organisation s business rate account. (vi) Right of Review There is no statutory right of appeal regarding discretionary rate relief decisions however the council will review decisions if requested to do so by the ratepayer. If the organisation disagrees with a decision made under this policy, then they can request a review either in writing or electronically. Such a request should include the reasons for requesting the review and evidence in support of that request. Such a request must be made within one calendar month of the date the original decision was issued. The review will be carried out by officers of the Council who did not make the original decision. 13. State Aid State Aid refers to forms of assistance from a public body, or publicly funded body, given to selected undertakings (any entity which puts goods or services on the given market) which has the potential to distort competition and affect trade between member states of the European Union. European Union state aid rules generally prohibit Government subsidies to businesses. Relief from taxes, including business rates, can in some cases constitute state aid. However, there is a general exception from the state aid rules, where the aid is below a de Minimis level (see Comm Reg 69/2001). This is 200,000 to any one business over any three-year period. The Council will be mindful of these rules and will ensure compliance with the legal requirements and any permitted exemptions. Each case will be considered based on the organisation s individual circumstances in full consideration of the state rules. Further guidance may be found at Other considerations (i) Equal Opportunities

14 The organisation should have an appropriate policy that aims to give equal opportunity to both any employees it has and to the people of the community it serves. A copy of the formal policy should be submitted with the Discretionary Relief application. However, if a written policy is not available, evidence must be provided that the organisation does not unfairly discriminate against any section of the community. (ii) Fraud The Council is committed to reducing fraud in all its forms. An organisation which tries to fraudulently apply for Discretionary Rate Relief by falsely declaring its circumstances, or providing a false statement or evidence in support of their application, may have committed an offence under the Theft Act Where we suspect such a fraud may have occurred, the matter will be investigated and may lead to criminal proceedings being instigated. (iii) Interest of Members and Officers Members and officers who have an interest in any aspect of an application for relief must not participate in the decision making process and must declare their interest. Members and officers who have an interest in any aspect of an application for relief must not canvass the decision making officers either in support of an organisation in which either: 1. They have an interest in the organisation making an application; or 2. The organisation making the request is one that is a rival organisation to the one in which they have an interest. Examples of interests include those in the following list. However, the list is not intended to be exhaustive. Membership of the organisation making an application; Being a trustee or board member of the organisation making an application; A close relative who is a member of the organisation making an application; An interest in the property for which the relief is being sought Membership of a similar organisation (e.g. a rival sporting club) Where a Councillor is unsure whether they have an interest they should seek advice from the Council s Monitoring Officer. Where an officer is unsure whether they have an interest they should seek advice from the Section 151 Officer. 15. Policy Review This policy will be reviewed at the point at which the Council considers its Corporate Strategy from 2020 onwards or sooner if there is a change in legislation that would affect its operation.