Business Rates Retail Relief
Introduction and purpose
The Government announced in the Budget on 29 October 2018 that it will provide a Business Rates Retail Discount scheme for occupied retail properties with a rateable value of less than £51,000 in each of the years 2019-20 and 2020-21.
This provides guidance about the operation and delivery of the policy including:
- Factors that should be considered when making a decision to award or refuse relief
- Arrangements to delegate authority to award relief in appropriate circumstances
- Appeals procedure for customers dissatisfied with the Council’s decision
If you'd like further advice on the application of the scheme please contact the Business Rates section.
How relief is provided
As this is a measure for 2019-20 and 2020-21 only, the Government is not changing the legislation around the relief’s available to properties. Instead the Government will, in line with the eligibility criteria set out in this guidance, reimburse the Council where it uses its discretionary relief powers, introduced by the Localism Act (under section 47 of the Local Government Finance Act 1988, as amended) to grant relief.
It is for the Council to decide on the scheme which they chose to adopt and decide in each individual case when to grant relief under section 47.
Properties that will be benefitted
Properties that will benefit from the relief will be occupied properties listed for rating a hereditament with a rateable value of less than £51,000 that are wholly or mainly being used as shops, restaurants, cafés and drinking establishments.
We consider shops, restaurants, cafés and drinking establishments to mean:
Hereditaments that are being used for the sale of goods to visiting members of the public:
- Shops such as: florist, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets, etc
- Charity shops
- Opticians
- Post offices
- Furnishing shops or display rooms such as: carpet shops, double glazing, garage doors
- Car or caravan show rooms
- Second hard car lots
- Markets
- Petrol stations
- Garden centres
- Art galleries where art is for sale or hire
- Cinemas
- Theatres
- Museums
- Nightclubs
- Music venues
- Gyms
Hereditaments that are being used for the provision of the following services to visiting members of the public:
- Hair and beauty services such as: hairdressers, nail bars, beauty salons, tanning shops, etc
- Shoe repairs or key cutting
- Travel agents
- Ticket offices such as theatre tickets
- Dry cleaners
- Launderettes
- PC or TV or any domestic appliance repair
- Funeral directors
- Photo processing
- Tool hire
- Car hire
Hereditaments that are being used for the sale of food or drink to visiting members of the public:
- Restaurants
- Takeaways
- Sandwich shops
- Coffee shops
- Pubs
- Bars
To qualify for the relief the hereditament should be wholly or mainly being used as a shop, restaurant, café or drinking establishment. In a similar way to other relief’s such as charity relief, this is a test on use rather than occupation. Hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief. 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. The list is intended to be a guide as to the types of uses that the Council considers for this purpose to be retail. The Council will determine whether particular properties not listed are broadly similar in nature to those above and, if so, to consider them eligible for the relief.
Conversely, properties that are not broadly similar in nature to those listed above should not be eligible for the relief.
Properties that will not be benefitted
The list below sets out the types of uses that the Council does not consider to be retail use for the purpose of this relief. Again, the Council will determine whether particular properties are broadly similar in nature to those below and, if so, to consider them not eligible for the relief under their local scheme.
Hereditaments that are being used for the provision of the following services to visiting members of the public:
- Financial services such as: banks, building societies, cash points, bureaux de change, payday lenders, betting shops, pawn brokers
- Other services such as: estate agents, letting agents, employment agencies
- Medical services such as: vets, dentists, doctors, osteopaths, chiropractors
- Professional services such as: solicitors, accountants, insurance agents or financial advisers, tutors
- Post office sorting offices
Available relief
The total amount of retail relief available for each property for each of the years under this scheme is one-third of the net Business Rates payable. There is no relief available under this scheme for properties with a rateable value of £51,000 or more. The eligibility for the relief and the relief itself will be assessed and calculated on a daily basis. A new hereditament created as a result of a split or merger during the financial year, or where there is a change of use, should be considered afresh for the relief on that day.
The following formula should be used to determine the amount of relief to be granted for a particular hereditament in the financial year:
Amount of relief to be granted = V/3 where,
V is the daily charge for the hereditament for the chargeable day after the application of any mandatory relief and any other discretionary reliefs. The relief will be applied against the net bill after all other relief’s. This will be calculated ignoring any prior year adjustments in liabilities which fall to be liable on the day. Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties, subject to State Aid de minimis limits.
State Aid
State Aid law is the means by which the European Union regulates state funded support to businesses. Providing discretionary relief to ratepayers is likely to amount to State Aid. Retail Relief will be State Aid compliant where it is provided in accordance with the De Minimis Regulations (1407/2013).
The De Minimis Regulations allow an undertaking to receive up to €200,000 of De Minimis aid in a three-year period (consisting 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.
Where the Council makes an award based on an assumption that the undertaking will not been in receipt of more than €200,000 of De Minimis aid, an explanatory note will be provided and the undertaking requested to contact the Council where they believe they have may or have reached the De Minimis threshold. In such instances the council reserves the right to withdraw.
Period of award and backdating
This is a measure for 2019-20 and 2020-21 only. Where the Council has reason to believe (based on the information held) that the criteria for relief has been met, it will make an annual award at the start of each financial year 2019-20 and 2020-21. Where liability starts, ends or changes part way through a year entitlement to relief will be reviewed in line with the guidance set out above. The council will not accept any backdated requests for relief beyond the end of financial year for which relief is being claimed.
Decision-making and appeals
Where the Council has reason to believe (based on the information held) that the criteria for relief has been met, it will award relief without the need for an application. In all other circumstances an application will be required in writing setting out how the criteria for relief have been met. In the interests of efficiency, the authority to consider applications is delegated to the Revenues Manager, who will ensure that a decision is notified in writing within 21 days of receipt of application or as soon as is reasonably practical thereafter.
Any appeal against the decision to award or not award relief or against the level of relief must be made in writing within four weeks of notification of the decision. Authority to consider appeals is delegated to the Head of Revenues and Benefits Partnership who will notify the applicant of the final decision in writing within 10 days whether an appeal is refused or accepted, with a full explanation of the reasons for the decision.