Background and Purpose
Section 49 of the Local Government Finance Act 1988 gives the Council discretion to reduce or remit the payment of Business Rates where it is satisfied that the ratepayer would sustain hardship if it did not do so and that it is reasonable to award relief, having taken into account the interests of the Council Tax payers.
The purpose of this policy is to specify how the Council will operate the scheme, to detail the application process and indicate the factors which will be considered when deciding if a discretionary reduction in Business Rates can be awarded.
Each case will be treated on its own merits and all applicants will be treated fairly and equally in their accessibility to the Fund.
The legislation does not give a definition of hardship however the Council determines hardship as:
- The ratepayer is able to satisfy the Council that they are not able to meet their full Business Rates liability or part of their liability.
- The ratepayer is able to demonstrate that all reasonable steps have been taken to meet their full Business Rates liability.
- The ratepayer can prove that their current circumstances are unlikely to improve in the following 12 months making payment of the Business Rates impossible.
- The ratepayer has no access to assets that could be realised and used to pay the Business Rates.
Enforced payment of their full Business Rates liability would result in severe hardship and the closure of the business
The Council has determined the following policy principles:
- All grants of hardship relief are only intended as short term assistance and will not extend beyond the current financial year of the bill and should not be considered a way of reducing Business Rates liability indefinitely.
- Hardship relief will be the exception and not the rule.
- There must be evidence of hardship that justifies a reduction in Business Rates liability.
- The Council must be satisfied that the ratepayer has taken reasonable steps to resolve their situation prior to application including taking financial advice. This should include applying for all financial help available to them.
- There is a direct benefit to the ratepayer or the community or no adverse impact to other ratepayers or the community as a result of awarding relief.
- The cost to local Council Tax payers is proportional to the benefits of the community.
- The ratepayer’s business has been detrimentally affected by circumstances beyond the ratepayers control and that do not constitute part of the normal risks in running a business i.e. a natural disaster or an unusual or uncontrollable event in the neighbourhood of the business.
- By refusing to award the relief this may result in the loss of the business. The impact on local amenities must be considered if the business is the sole provider of a service in the local area i.e. the only village shop.
- By refusing to award the relief may result in the loss of the business. The impact on employment prospects in the local area must be considered i.e. if the closure results in a large number of redundancies, the social aspect of increasing unemployment and the possible negative impact in attracting further investment in the area must be considered.
- The Council’s finances allow for a reduction to be made and it is reasonable to do so.
The granting of relief does not infringe State Aid rules.
Hardship relief ends the sooner of:
- The end of the financial year;
- All or part of any unoccupied area becoming occupied
- A change of liable person
- The property becomes empty, or becomes occupied
- The ratepayer enters any form of formal insolvency
- The ratepayers financial circumstances significantly change (the rate payer must inform the council if their circumstance change e.g. a change in rateable value).
All applications should be made in writing, on the relevant form, from the ratepayer, their advocate/appointee or a recognised third party acting on their behalf, who the Council has accepted, and the ratepayer has given appropriate authorisation to them to discuss their affairs. This form can be submitted electronically.
All applications should be supported by a statement of income and expenditure, a balance sheet as well as supporting evidence such as the business plan to get the business onto a sound financial footing. It is for Council Officers to determine for each case what level of evidence is required.
All applications will be considered on their merits. Applications must demonstrate hardship as determined by this policy.
For claims made on the grounds of financial hardship, the applicant must be prepared to:
- Make an application for assistance that is separate from this application any relevant reliefs or discounts and exemptions;
- If a sole trader / self-employed , they must provide full details of their current income, capital (including assets) and expenditure
- Provide full details of the businesses current income, capital (including assets) and expenditure
- Agree that checks such as payment propensity are undertaken on them before any claim is considered;
- Take reasonable steps if relevant to resolve their situation including taking debt advice from the Citizens Advice Bureau or other organisations that offers free advice;
- Ensure that the Council is kept informed about the applicant’s circumstances
The applicant also acknowledges;
- That any application for hardship relief does not negate in any way the ratepayer’s obligation to pay Business Rates as demanded. Failure to do so may result in additional costs being added to the outstanding balance.
- Relief will not to be granted where the amount is outstanding as a result of wilful refusal or culpable neglect on the part of the ratepayer to pay Business Rates.
- Relief will not to be granted in order to prevent recovery action being instigated by the Council or to stop bankruptcy or committal proceedings commenced by the Council or any other body.
Hardship relief will only be awarded once to each eligible ratepayer. The Council expects the ratepayer to take the opportunity of any relief granted to place their financial affairs in proper order.
Hardship relief will only be granted if there is sufficient budget available for the financial year in which an application is determined.
Hardship relief will be capped to a maximum award to one individual equivalent to the lesser of the outstanding Business Rates charge for the current financial year at the point of application or £10,000.
The ratepayer must notify the Council immediately by phone, email or in writing about any changes in their circumstances which might affect their claim for a discretionary reduction. All changes in circumstances must be notified within one month of the date of change.
Failure to notify a change in circumstance may result in the withdrawal of the reduction granted. The ratepayer will be required to repay any outstanding amount to the Council.
The Council may revise an award where the applicants circumstances have changed and they affect the liability.
The amount and the duration of the award will be determined at the discretion of the Council and will be based on the evidence supplied and the circumstances of the claim.
The start date of any award will be determined by the Council. The maximum length of any award will not exceed the end of the financial year in which the award is made.
Awards made on the grounds of financial hardship will end the sooner of;
- The end of the financial year;
- The ratepayer moves;
- The ratepayer enters into any form of insolvency arrangement;
- The ratepayer’s financial circumstances change and financial hardship relief is no longer appropriate.
Any award granted shall reduce the amount of Business Rates liability and will be made direct to the Ratepayers Business Rates, thereby reducing the amount of Business Rates payable.
No cash awards will be made.
Applications will usually be determined within 21 days of receiving sufficient information.
The ratepayer will be informed in writing of the Council’s decision, the reasons for the decision and receive a revised Business Rates demand if appropriate.
If the ratepayer is dissatisfied with the decision they may request a redetermination of the Council’s decision. The request must be in writing, submitted within 28 days of the original decision and contain any additional information necessary that will justify a change to the original decision. Additional evidence may be required to support a review.
The redetermination will be carried out by the Head of Customer, Digital, Revenues & Benefits. The 151 Finance Officer and the Portfolio Holder may also be consulted during the review. Redeterminations will usually be determined within 21 days of receiving sufficient information.
The ratepayer will be informed in writing of the Council’s redetermination decision, the reasons for the decision and receive a revised Business Rates demand if appropriate.
If the applicant remains dissatisfied with the outcome of any review, certain appeals against the Council’s decision can be made to the Independent Valuation Tribunal Service.
The Council is committed to protecting public funds and ensuring funds are awarded to the people who are entitled to them. The ratepayer agrees, on making a claim, that any and all information given may be shared with other public authorities for the purpose of detecting fraud.
Personal information provided to claim reliefs may be shared with fraud prevention agencies to prevent fraud and money laundering, and to verify people’s identity. If fraud is detected, you could be refused certain services, finance or employment. More details can be found on our Investigations webpage
Any claim for a reduction in Business Rates liability based on falsely stated circumstances or false evidence will be investigated and may lead to criminal proceedings.
The Council will not tolerate fraudulent claims. Any fraudulent claim will be investigated and prosecuted. The amount of the hardship relief will be cancelled and must be repaid in full to the Council. The Council always publicises successful prosecutions in local media and names and gives the address of the tax payer.
The tax payer must sign any claim to certify that the information given is accurate and reflects their circumstances and accepts the Council may prosecute them.
The Council’s complaints policy and procedure will be applied in the event of any complaint received about this policy.
This policy will be reviewed every year and updated as appropriate to ensure it remains fit for purpose. A review may take place sooner should there be any significant changes in legislation.