Business rates reductions and exemptions

Introduction

• A National Non-Domestic Rate (NNDR) is payable on all non-domestic properties.
• The amount payable is calculated by multiplying the rateable value (set by the Valuation Office Agency) with a national multiplier (which is increased each year by the retail price index). Councils are responsible for the collection of rates and any business rate growth or loss is shared between Central Government, the Council and its preceptors.
• Councils have the power to grant discretionary rate relief (DRR) to organisations that meet certain criteria.
• The provisions for DRR are set out in Section 47 of the Local Government Finance Act (LGFA) 1988 and subsequent amending legislation. Councils have discretion to grant rate relief from all or part of the amount of non-domestic rates.
• Section 47 of the LGFA 1988 determines the qualifying conditions for DRR as one or more of the following:
  • the ratepayer is a charity or trustees for a charity, and the hereditament is wholly or mainly used for charitable purposes (whether of that charity or of that and other charities);
  • the hereditament is not an excepted hereditament, and all or part of it is occupied for the purposes of one or more institutions or other organisations none of which is established or conducted for profit and each of whose main objects are charitable or are otherwise philanthropic or religious or concerned with education, social welfare, science, literature or the fine arts;
  • the hereditament is not an excepted hereditament, it is wholly or mainly used for purposes of recreation, and all or part of it is occupied for the purposes of a club, society or other organisation not established or conducted for profit.
• Section 47(2) Local Government Finance Act 1998
• This Policy outlines Coventry City Council’s (hereafter referred to as ‘the Council’) criteria for granting discretionary relief from non-domestic rates for charitable and non-profit making organisations.
• This Policy takes effect for all applications made in respect of rate liabilities incurred from 1 April 2015 onwards and for applications made after the 1 April 2015 in respect of liabilities incurred prior to 1 April 2015.
• The Council has ultimate discretion in considering an application for DRR. This policy provides an overarching framework for DRR in order that the Council’s decision- making in respect of DRR may be fair, consistent and transparent.
• The Council is responsible for 49 per cent of the cost of funding the DRR scheme and therefore DRR represents a direct cost to council tax payers in the city. This policy seeks to ensure that the DRR scheme is fair, transparent and ultimately affordable to the Council and the local council tax payers that it serves.

General exclusions

• In general terms the following organisations are unlikely to be granted DRR:
  • Schools
  • housing associations
  • Charity shops who do not operate exclusively in Coventry
  • National charities
  • Organisations that provide gaming facilities and/or a licensed bar as the major function in relation to the services provided
  • Those that do not meet the specific objectives that the Council wishes to promote, and which are set out in the Key Criteria below.

Key criteria

• The following criteria must be satisfied by organisations wishing to claim DRR:
  • The organisation must submit its two most recent sets of audited accounts in order that the Council may conduct a financial assessment. Where such an assessment shows that an organisation has the means to pay its full rate liability DRR will not be granted;
  • Applications must be made annually;
  • The organisation must demonstrate that it supports the Council’s objectives of attracting business, growth and jobs to the city or that it is a community group or an advice organisation providing advice or support to the most vulnerable residents;
  • The organisation must provide services primarily to people who live in Coventry;
  • The organisation must be accessible to all. Membership should be open to all sections of the community. Applicant organisations should operate equal opportunities policies; and
  • In the case of sports clubs the organisation must not provide payments or other significant benefits to players.
• Where an organisation has been successful on the basis of the criteria outlined above, and where that organisation is liable for non-domestic rates at more than one property, the Council will award DRR in respect of one property only – that being the property with the highest rateable value unless additional costs fall to the council tax payers from such a position.

Organisations providing services on behalf of the Council

• 13.The Council may grant up to 100 per cent discretionary rate relief to those charities and other organisations where contractual commitments exist with the Council, therefore alleviating the need for the Council to provide services direct and where additional costs would fall to council tax payers.
• The requirement to submit an application form, provide any other information and/or meet the financial assessment criteria (see point 11.I.) is at the discretion of the Council.
• Where the organisation is liable for non-domestic rates at more than one property, the Council may award DRR in respect of more than one property.

General principles

• To be eligible for relief properties must be occupied and used for the purposes of the organisations objectives to the benefit of Coventry people. DRR will not normally be considered for properties that are empty.

Relationship to other forms of Rate Relief

• Applications under this policy will only be considered after consideration of any other forms of rate relief to which the applicant may be eligible (excluding hardship rate relief).

Claiming DRR

• All applicants are required to complete annually the Council’s discretionary rate relief application form which will be available on the Council’s website.
• The Council may request additional information in support of an application for DRR. If supporting information is not provided within one calendar month from the date of request the Council may deem the application to be unsuccessful.

Maximum award

• The Council will consider the merits of each application and the specific circumstances of each applicant. The maximum amount of DRR that will normally be awarded is 50 per cent of the net rate liability but this is subject to paragraphs 11 above and 18 below.

• Subject to the criteria detailed in ‘Key Criteria’ above, community groups or advice organisations providing advice or support to the most vulnerable residents may be eligible for up to 100 per cent relief.

Timescale for decisions

• Decisions will be made within three months of receipt of an application form.

Notification

• The Council will inform the organisation applying, in writing (or email), of the outcome of their application for DRR within seven days of making a decision. Where the application is not successful, the notification will provide full reasons for the decision and confirm the applicant’s right to request a review of the decision.
• Where the application is successful, the notification will include the following information:
  • The period of the award.
  • The percentage of the rate liability awarded for that period.
  • The amount of Rate Relief to be awarded for the period.
  • Details of when an amended Non Domestic Rate Demand will be issued.

Requirement to make payment of amounts falling due

• Ratepayers must continue to pay any amount of business rates that fall due pending the outcome of a DRR application. The Council may apply its normal recovery procedures in cases where payments are not received.

Awards for retrospective periods

• For successful applicants DRR will be effective from the date that the Council receives the application. Rate relief will not normally be awarded in respect of any day prior to the day that an application is received except where:
  • The applicant is newly liable for business rates and an application is received within one calendar month of the new liability arising
  • There are exceptional circumstances and the ratepayer can demonstrate good cause for not submitting the application earlier.
• No consideration shall be given to an award for a retrospective period where the Council is not able to verify to its satisfaction that the circumstances giving rise to the application pertained for that period.

Reviews and appeals

• Decisions on the award or otherwise of rate relief will normally be taken by the Head of Revenues and the decision will normally be final except as set out in this paragraph. An applicant may make a request for the decision maker to review a decision but only where either;
  • Additional information that is relevant to the application and that was not available at the time the decision was made becomes available, or
  • There are good grounds to believe the application or supporting information was not interpreted correctly at the time the decision was taken.
• A request for a review must be made within four weeks of notification of the decision and must set out the reasons for the request and any supporting information.
• Cases will be reviewed by the relevant Assistant Director in consultation with the Executive Director, Resources and Cabinet Member for Strategic Finance and Resources.

Payments

• All awards of DRR will be credited against the applicant's business rate account to reduce the amount payable.

Duration of awards

• Each award of rate relief made in accordance with this policy shall apply for a period of not more than one financial year and applicants will be required to submit a new application annually. Organisations receiving DRR will be notified annually of their requirement to submit a new application for the new financial year.