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Locally Administered Business Rates Relief Scheme 2017-18

The scheme has been designed to:

  • minimise bureaucracy for businesses and for the council;
  • take account of the basis on which the Government has calculated the council’s allocation of funding;
  • take account of other existing reliefs that are already available as a result of legislation or Government decisions;
  • minimise the potential for breaching State Aid limits.  State Aid rules apply and these limit the amount of support that may be provided to an undertaking to  €200,000 over a three year period (= c£170k);
  • take account of businesses’ likely “ability to pay”;
  • provide support only for businesses that contribute to the local economy.

Outline of the scheme

No applications will be required. WFDC will automatically apply relief where eligibility criteria are met. This approach to awarding revaluation support has benefits for businesses because they do not need to pay for rating agents to make applications on their behalf – WFDC will calculate the relief for any eligible business and send out an adjusted bill automatically. Any business that is unhappy with how the scheme has been operated in its case can make representations, which would be considered and might lead to a revised decision on eligibility for support. This will be handled under our Let us Know policy without the need for a complicated or costly appeals mechanism. 

In order to mitigate the risk that State Aid limits might inadvertently be breached, recipients will be asked to contact the Council if the support causes or might cause issues under State Aid rules. In these circumstances, the Council reserves the right to review or remove revaluation support.

The Council will focus support on trading local businesses. This would maximise the number of local businesses that would qualify, while minimising or avoiding State Aid issues and not providing additional relief to occupiers who already benefit from mandatory reliefs as a matter of law or Government-funded relief schemes. The scheme will also exclude from eligibility properties that may be being used in a way that avoids taxation, such as where there has been a change from empty property relief but the occupation has not been established for a lengthy period. The following hereditaments will not therefore be eligible:

 

Ineligible hereditaments

Rationale

Any hereditament where there has not been an increase in bills following revaluation.

Proposed Government condition for the grant.

Rateable value over £200k

Government funding has not been provided in respect of such properties.

 

They tend to be occupied by large businesses or organisations that “can cope” e.g. supermarkets.

 

Providing support for such businesses could quickly reach State Aid limits and could leave little to support smaller businesses.

Rateable value below £15k

Covered by small business rate relief.

Hereditaments occupied by a national chain or organisation.

 

Definition of “national chain or organisation”: any organisation which is known, or may reasonably be assumed by the Council, to occupy hereditaments in the areas of many billing authorities in several different regions of England. “Many” does not mean a “few”.

 

 

Factors that will be considered in deciding whether an organisation is “national”:

a)    a company that operates a number of shops, factories or other undertakings only in the West Midlands region would not be likely to be considered “national”;

b)    location of the registered office/HQ of the company. If this is outside the West Midlands, it will be strongly indicative of a “national” organisation. Some national organisations have their registered office in Wyre Forest or nearby, and they can be ineligible as set out in the definition above.

 

Exception: Places for People Leisure Ltd will not be treated as a “national organisation” in respect of Bewdley Leisure Centre. Paragraph 5 below is relevant to this hereditament

Excluding national organisations minimises risk of State Aid limits being breached.

 

National organisations, including charities, are able to absorb costs more easily than independent and local organisations. Charities receive 80% mandatory relief.

 

Doctors’ surgeries and any NHS establishment

Surgeries enjoyed a significant reduction in bills as a result of an appeal in 2015. NHS bodies should continue to contribute their full business rates as they have done for decades.

 

Schools

Academies are eligible for mandatory 80% relief as charities, but the Council’s policy does not provide access to discretionary relief.

 

Other schools should continue to contribute their full business rates as they have done for decades.

Housing associations/registered social landlords

Consistency with the Council’s existing policy which does not provide access to discretionary relief.

Empty hereditaments

Eligible for empty property relief for 3 months (6 months for industrial properties). No justification for providing revaluation support for buildings that continue to be empty – there is no economic activity associated with them.

Hereditaments that have benefited from empty property relief in the last 3 months (or 6 months in the case of industrial property)

To prevent abuse of the business rates system by companies that use buildings for a short period (usually for storage) and then cease usage in order to qualify for a further period of empty property relief.

 

This will not affect the Council’s ability to provide support for genuine start ups. They can be eligible for support under the Council’s existing discretionary relief policy.

Revaluation support will be provided to an organisation already in receipt of discretionary relief under the Council’s existing policy, to cover 100% of any increase in the bill following revaluation.

 

Otherwise, revaluation support will be provided equally among potentially eligible businesses. For 2017-18, the intention is to provide relief at the rate of 85% of the increase in the bill, and that this support will be phased out over the following three years. In 2020-21, the value of support is expected to be minimal and will disappear altogether in 2021-2022. The estimated value of support across the four years is expected to be as follows, although the actual figures for 2018-19 and later years can be confirmed only in the light of actual revaluation support payments made in earlier years, the impact of successful proposals/appeals to alter the valuation list, confirmation by the Government of ability to move resources between financial years etc.

 

2017-18

2018-19

2019-20

2020-21

85%

40-45%

20-25%

<5%

 

Other conditions of the scheme

The Council will recalculate eligibility for revaluation support in the event of a change to the rating list that affects an eligible property, whether retrospective or otherwise. For example, this might happen if the rateable value is changed because of a successful proposal or appeal.

The Council reserves the right not to award additional revaluation support in the event of a further increase in a property’s rateable value, having regard to the total amount of Government funding being made available for revaluation support.

The Council will announce the precise level of revaluation support in 2018-19 and later years in advance of the start of the financial year. Businesses will be notified individually by means of their rates bill for the financial year, which will show the amount of revaluation support. 



Wyre Forest District Council