What is Discretionary Rate Relief
Financial assistance if your rateable value increased from 1st April 2017
The Valuation Office Agency (VOA), an Executive Agency of HMRC, is responsible for assessing all rateable values across England and Wales.
From the 1 April 2017, the VOA updated the rateable value of all business properties. The revaluation is based on rental values on 1 April 2015. It reflects changes in the property market across England and Wales since 2008.
Revaluation is done to maintain fairness in the system by redistributing the total amount payable in business rates. It reflects changes in the property market. The Government has committed to fund a relief scheme for Businesses adversely affected by the 2017 Business Rates revaluation. The intention is that the scheme will last for four years. It will be funded by a s31 grant under the 2003 Act.
What you need to do
We have reviewed the guidance provided by the Government and created a Business Rates Discretionary Rate Relief scheme.
If you have not been issued an application form, but feel you qualify for relief, download an application form. Return the completed form to the address quoted.
Where required applications must be made on the prescribed forms supplied by the Authority. Ratepayers are expected to provide sufficient evidence to enable a determination to be made by the Authority.
- Applications for relief cannot be backdated more than 6 months following the end of the financial year to which they relate. Even in the case of a change in rating list by the Valuation Office Agency.
- All applications must be signed by a person of sufficient responsibility within the organisation. For example, a Director or Company Secretary.
- Any award applied is dependent on supporting legislation.
Calculation of Relief 2017/18
The value of any award will be based on the increase in rate liability (after any other reliefs or reductions) less 12%.
Calculation of Relief 2018/19
Due to a reduction in the funding available, the value of any award will be based on the Increase in rate liability (after any other reliefs or reductions) less 29%.
Calculation of Relief 2019/20
Due to a reduction in the funding available, the value of any award will be based on the Increase in rate liability (after any other reliefs or reductions) less 48%.
A ratepayer dissatisfied with a decision made under this Criteria may appeal requesting that the decision be reviewed. The exception is for decisions made by the Portfolio Holder which shall be final. Requests to review a decision should be received by the Council within four weeks of the award notification or refusal of an award.
State Aid law is how the European Union regulates state funded support to businesses. Providing discretionary relief to ratepayers is likely to amount to State Aid. However discretionary relief will be State Aid compliant where it's provided in accordance with De Minimis Regulations (1407/2013)2.
The De Minimis Regulations allow an undertaking to receive up to 200,000 euros of De Minimis aid in a three-year period. This consists of the current financial year and the two previous financial years.
To administer De Minimis it is necessary for the local authority to establish that the award of aid will not result in the undertaking having received more than €200,000 of De Minimis aid.
The threshold only relates to aid provided under the De Minimis Regulations. Aid under other exemptions or outside the scope of State Aid is not relevant to the De Minims calculation. In basic terms this means discretionary assistance which could have the effect of distorting competition between similar undertakings within the European Union.
Review of the Scheme
Funding has been confirmed by Government for 2017/18 and is indicative for the three subsequent years. Continued support to businesses under this criteria will therefore be dependent on confirmation of future years funding by Government.
The allocation of funding is broadly fifty per cent smaller in year two. It will be a further fifty per cent smaller in year three. In 2020/21, the fourth and final year, the anticipated award is minimal (£10,000 or less in total).
A review of the business rates revaluation support relief scheme was undertaken in 2017/18. It continues to be reviewed in subsequent years.
It will ensure that support is most appropriately distributed. It will continue to support those local independent businesses experiencing the highest increases in their bills. With the limited funding available in 2019/20 and 2020/2021, it may not be possible to provide relief of 100% of a determinable increase.