Decision details

The Cabinet Member:

1.    Approved the Local Discretionary Rate Relief scheme for 2018-19 as set out in Appendix A;

2.    Instructed officers to ensure that the reliefs for the three government initiatives (LDRR, public houses, small businesses) are processed in accordance with the agreed schemes for the qualifying properties and rebilling takes place at the earliest opportunity;

3.    Instructed officers to process the reliefs for future years for small businesses and public houses (if further extended by the government) at an appropriate time in accordance with the relevant qualifying criteria;

4.    Approved the award of Discretionary Rate Relief for charities and similar organisations shown on the attached schedule at Appendix B to 31 March 2019;

5.    Rejected the applications for the award of Discretionary Rate Relief for charities and similar organisations shown on the attached schedule at Appendix C.

Spring budget 2017 schemes funded by central government.

The LDRR scheme will provide additional rate relief for businesses who continue to experience an increase in their net rate payable arising specifically from the 2017 revaluation following the application of all other relevant reliefs and is set out in appendix A.

The key elements of the scheme include a Rateable Value (RV) of less than £200k, ensuring the property was occupied on 31^st March 2017, basing the calculation on the net rate increase between years, exclusion of local authorities, preceptors in line with legislation.

In addition further exclusions will include empty properties, charity shops, other public bodies such as NHS and national or multi-national organisations. The awarding of relief will also be subject to state aid rules.

The scheme will be based around the national transitional relief scheme which covers small (RV up to £20k), medium (RV £20k to £100k) and large properties (RV over £100k). This scheme provides relief at varying levels in order to reduce the impact of the increase in rates due to the 2017 revaluation. The local discretionary scheme will provide further relief for the qualifying properties by reducing net increases between 2016/17 and 2018/19 (2 years) to 5% (inflation) for small properties; 15% for medium properties and 25% (limited to 50% relief) for large properties up to 200k RV. Additional parameters applying to all properties are increases of up to £50 will not be awarded and the maximum award will be capped at £2.5k.

By structuring the reliefs in this way, reliefs will be targeted towards smaller properties in line with the government’s intentions but also provides some relief for higher value ratepayers with RV’s up to £200k experiencing higher levels of increase.

The estimated number and amount of relief is as follows

The relief for public houses is awarded after any other reliefs has been given in accordance with current rules and provides relief of up to £1000 for 2018/19 only for properties with a rateable value of less than £100,000. It is possible that the government could extend this relief for a further year and the recommendations instructs officers to process any reliefs in future years  if this were to happen. The total value of reliefs for 2018/19 is estimated as £40k.

The support for small businesses is a very specific relief affecting a small number of properties previously in receipt of small business rate relief. In cases where the rateable value has increased to a level that eliminates or drastically reduces the small business rate relief, the increase in business rates is substantial. As the standard transitional relief scheme introduced by the government does not take account of losses due to changes in reliefs this new scheme limits the increase for these businesses to £600 p.a. The scheme will run for the period of the current rating list and relief granted in this report covers 2018/19 but the recommendations instructs officers to process any further reliefs due in future years. The total value of relief for 2018/19 is estimated at up to £15k.

The cost of granting these three reliefs will be funded by Central Government via a Section 31 grant, in the case of the LDRR up to the maximum value allocated - the Government have confirmed that there can be no carry forward of any allocation.

Peterborough discretionary rate relief

Following the introduction of the business rates retention scheme on 1 April 2013, whereby councils are able to retain a proportion of business rates, the Council is required to submit an annual declaration within statutory deadlines and forms part of the Council’s formal budget process. The final calculation of business rates to be retained locally has several calculations including deducting an estimate for Discretionary Rate Relief before apportioning the Councils local share of 49%. The council has estimated that £0.4m Discretionary Rate Relief will be awarded for 2018/19 following applications from businesses and organisations.

The value of the proposed relief at Appendix B for the 2018/19 financial year is £16,260.11, with an additional £14,536.81 in respect of 2017/18, giving a total of £30,796.92which is in line with the original estimate. Any over or under estimate will be adjusted for accordingly at the end of the financial year.

Appendix C details the applications which have been rejected and the reason for the recommendation, the total value of the relief in question being £10,715.20. The granting of this relief would result in a loss of income to the Council of £5,250.45 based on its 49% share.

Awards of relief under the government schemes are granted under the discretionary relief scheme which is detailed in s47 Local Government Finance Act, as inserted by Section 69 of the Localism Act 2011. 

Awards of discretionary relief are allowed under s47 Local Government Finance Act 1988 (as amended by the Local Government Act 2003) and the Local Government and Rating Act 1997 to the following rate payers:

Ø  Charities where the property in question is used wholly or mainly for charitable purposes;

Ø  Organisations not established or conducted for profit whose main objectives are, charitable or otherwise philanthropic, religious, concerned with education, social welfare, science, literature or the fine arts;

Ø  Clubs or societies not established or conducted for profit where the property is wholly or mainly used for the purposes of recreation.

Ø  Where the property is within the authorities Rural Settlement list, the rateable value of the property is less than £16,500 and the property is used for purposes that benefit the local community.

Ø  Where none of the above applies, where the Billing Authority considers it reasonable to award relief, having regards to the interests of persons liable to pay Council Tax set by it.

In respect of the three government funded schemes other than not setting up a scheme and delivering relief funded by the Government there are no other realistic options.

For the Peterborough scheme alternative options to be considered include not allowing discretionary relief and allowing relief at a higher or lower level. However, to ensure consistency and equality, the recommendations are in line with the Council guidelines and with previous decisions for similar organisations. 

None.

None.