Policy Local Discretionary Rate Relief policy

Show all parts of this policy

2. Specific policy areas

4.1 Awarding Local Discretionary Rate Relief

4.1.1 We recognise the importance of having a thriving, competitive local economy and seeks where it can to help retain existing and encourage new employment. It is anticipated that relief will only be granted in exceptional circumstances and for a temporary period. When considering an application for rate relief the following factors will be taken into account:

  • That relief is for a temporary period
  • The significance of potential loss of employment in the area
  • The measurable impact on other businesses & the local community
  • Opportunities for new business growth, expansion and employment within the area
  • The positive effects on business cash flow and evidence of positive impact on future viability
  • Sufficient evidence of likelihood of recovery of the applicant’s business
  • The capacity of EDDC intervention to secure further investment and retained and/or new employment opportunities
  • Reassurance of duration of retained employment and continued production/operation in the area.
  • Uniqueness of service/commodity being provided within the community/district
  • Whether relief is for occupied or unoccupied rates
  • What proactive measures the business/organisation is taking to reduce overheads, etc
  • Measures being taken to reduce their rate liability, for example occupying smaller premises, letting out parts of the building, etc
  • Consideration will also be given to rate deferral, reprofiling of instalments, arrangements as an alternative method of support.
  • Cost of funding relief and the constraints on EDDC’s finances
  • It is in the interests of council tax payers as a whole to give relief

4.1.2 Giving rate relief to a business/organisation must be balanced against whether this creates unfair market conditions to the detriment of others. See also section 4.4 State Aid.

4.1.3 It should also be recognised that one of the main overheads of any business is non-domestic rates and therefore it is reasonable to expect that businesses have made provision to pay this.

4.1.4 Businesses can appeal against the rateable value or where there is a material change can apply to the Valuation Office Agency to have the rateable value reassessed. EDDC would expect businesses to use this mechanism first, as relief under this policy will only be given in very exceptional circumstances and for a temporary period.

4.1.5 Payment record history will also be taken into account.

4.1.6 Relief will be withdrawn/ cancelled if:

• the conditions or circumstances on the basis of on which the relief was granted change or fail to materialise, or the information submitted as part of the application proves to be misleading

• the applicant ceases to be the ratepayer

• business/organisation ceases to trade (in case of occupied rates) or downscales operations and workforce in contravention of any agreement

• the use of the property changes.

Where relief is cancelled this will normally take effect from the actual date of change. However, in certain circumstances this may be withdrawn in full. A revised rates bill will be issued for payment.

4.1.7 Ratepayers are required to notify us of any change in circumstances that may affect entitlement to discretionary rate relief.

4.2 Funding

4.2.1 From 1 April 2013 the cost to East Devon District Council of funding discretionary rate relief is 40 per cent as it forms part of the business rates retention scheme.

4.3 Legal background

4.3.1 Section 69 of the Localism Act 2011 amends Section 47 of the Local Government Finance Act 1988 with effect from 1 April 2012 to allow billing authorities to grant discretionary rate relief in any circumstances provided it is in the interests of the local Council Tax payers to do so.

4.3.2 A decision to award discretionary rate relief must be made during or within six months after the end of the financial year to which it relates.

4.3.3 There is no provision within the regulations to withhold payment whilst an application for relief is pending therefore recovery action may continue.

4.4 State Aid

4.4.1 There are European Union (EU) regulations that restrict the award of state aid under certain circumstances. Relief from taxes, including non-domestic rates, can constitute state aid. State aid rules aim to ensure fair competition and a single common market. Discretionary rate relief must at all times fall within the criteria specified by the relevant Articles of "Functioning of the EU" for it to be treated as "de minimis aid".

4.4.2 The total de minimis aid which can be given to a single recipient is currently €200,000 over three fiscal years. This ceiling takes into account all public assistance given to the applicant or any linked organisation (such as another group company) and includes the monetary amount of any aid given in respect of operational locations outside East Devon.

4.4.3 Discretionary rate relief will not qualify as de minimis aid if given on condition that use of domestic materials is to be preferred over imported materials, or if given to an organisation defined by the EU as "an undertaking in difficulty" (which EU defines as a company in respect of the absence of "outside intervention by public authorities will almost certainly condemn it to go out of business in the short or medium term").

4.4.4 The Council must ensure that it is complying with State Aid rules when awarding discretionary rate relief.

4.5 Administering the scheme

4.5.1 Local discretionary rate relief must be applied for in writing by the ratepayer.

4.5.2 It is expected that the ratepayer will need to provide:

• The period and percentage of relief being sought

• Reasons why relief should be given and how this meets our policy

• Details of all other support/recovery measures the business /organisation is undertaking or receiving

• Audited accounts

• Business Plan including growth forecasts (to suggest that the Council is helping an organisation/business that is demonstrating potential to become sustainable)

• Explanation as to how it meets the interests of the local council tax payer as a whole.

• Its declaration as to the amounts that it or any other organisation in its group has received under either the "de minimis aid scheme" and/or "notified scheme" and/or "block exemption scheme" (as prescribed by the EU) in the last three years

4.5.3 We will reserve the right to request any other information it feels appropriate in order to consider an application.

4.5.4 Successful applicants will be notified in writing of the amount and period Discretionary Rate Relief has been awarded for. Any entitlement is applied to the rate account and a revised bill is sent.

4.5.5 Unsuccessful applicants will be notified in writing together with the reason for the decision.

4.5.6 We will aim to make a decision within 14 days of receiving all the information required.

4.6 Right of appeal

There is no statutory right of appeal against a decision made by us regarding discretionary rate relief. However, we recognise that ratepayers should be entitled to have a decision reviewed if they are dissatisfied with the outcome.

4.6.2 A review of a decision will be dealt with by Chief Executive in consultation with the Leader or Deputy Leader of the Council. There is no right of appeal.

4.6.3 A request for review must be made within one calendar month of the date of the decision letter.

4.6.4 This review process does not affect a ratepayer’s legal right to seek leave to challenge a decision by way of Judicial Review.