Discretionary Fund Relief

We are granting Discretionary Rate Relief under S47 of the Local Government Finance Act 1988 in accordance with a locally developed scheme established following the government's consultation on design and implementation.

Background

In the 2017 Spring Budget, the Chancellor announced that the government would establish a £300 million discretionary business rate relief fund so that local authorities could devise local schemes to help businesses that are facing rising bills as a result of a national revaluation of all business properties.

The funding for the scheme is spread over four years. The funding available to us for 2019 to 2020 is £128,000 and 2020 to 2021 is £18,000.

If you have an enquiry about Discretionary Fund Relief for 2017-18, please email brates@guildford.gov.uk

Criteria

We are granting Discretionary Rate Relief under S47 of the Local Government Finance Act 1988. We have freedom to set local criteria, provided we consult with any major precepting authority. We have delegated power to adopt a local scheme to the Exchequer Services Manager in conjunction with the Lead Councillor.

In establishing criteria for eligibility, we have considered the following:

  • help granted should make a difference to the businesses concerned and should not simply be a token payment.

  • given that the fund is limited and the scheme local, we would like to support businesses that operate from premises only within the borough, and are not already "state funded".

  • that we can administer the scheme within our existing resources.

  • that some businesses may be indirectly affected by the revaluation. For this reason we have introduced an element of Discretionary Fund Hardship Relief for 2018-19.

Eligibility for Discretionary Fund Relief

To be eligible, ratepayers must meet all the criteria.

A. The ratepayer was eligible for Discretionary Fund Relief in 2017 to 2018.

To be eligible in 2017 to 2018, ratepayers must have met all the criteria:

1. The ratepayer is not a precepting authority (these are not eligible for discretionary relief under S47 of the Local Government Act 1988), or state funded.

2. The ratepayer on 1 April 2017 is the same ratepayer as on 31 March 2017.

3. The property is occupied on 1 April 2017, and remains occupied by the same ratepayer. Relief will end with a change of ratepayer, as it is to help existing ratepayers with more to pay because of the revaluation.

4. The property has a rateable value of less than £200,000.

5. The revaluation results in an increase pre Transitional Phasing (and any other rate relief) of 12.5% or more.

6. The additional amount payable after transition and any other rate relief is more than £600.00 (1 April 2017 charge after all relief x 365 less 31 March 2017 occupied charge after all relief x 365). Where eligible businesses are expected to apply for other rate relief such as Small Business Rate Relief to reduce their rate liability.

7. The ratepayer is not already in receipt of:

  • 80% Mandatory Relief from public funds because they are a charity or Community Amateur Sports Club, or

  • more than 22.5% of Discretionary Rate Relief from public funds.

8. The Valuation Office Agency has not assessed the property as being in the following categories:

CA - Advertising Rights and Stations

CC - Camping Sites, Holiday Centres etc

CP - Car Parks and Parking Spaces etc

E - Educational, Training and Cultural (with the exception of EN Day Nurseries)

F - Formula Assessed Public Utilities

IM - Mineral

IX - Other Industrial

LS - Sports Grounds etc

MH - Private Hospitals, Clinics etc

MT - Communication Stations, Public Telephone Kiosks

N - Non Formula Assessed Public and Other Utilities

9. The ratepayer does not have any other business premises outside Guildford Borough and is not a franchise. Other business premises outside Guildford Borough includes overseas business premises.

B. The ratepayer must continue to meet criteria 1 to 9 throughout 2018 to 2019, and 2019 to 2020.

C. If a ratepayer did not apply for relief in 2017 to 2018, but can show they were eligible, they will be granted relief in 2019 to 2020.

If eligibility is unclear, we will determine eligibility for the relief.

Eligibility ceases on any day when the criteria are not met, or on 31 March 2020 (whichever is the sooner).

Important note

The Discretionary Fund is not an ongoing fund. This scheme relates to 2019 to 2020 only. Ratepayers should make financial provision to pay subsequent rate demands in full.

How to apply

We hold information on criteria 1 to 8 and will try to apply relief and contact all the ratepayers we believe are eligible. If you believe that you should qualify for help, please email brates@guildford.gov.uk with details.

How we calculate the relief

We will calculate the relief after entitlement to other rate reliefs, with the exception of any Retail Discount.

Relief is calculated on a daily basis for each day of eligibility at 5% of the net liability

We will recalculate relief if there is a retrospective change to eligibility. For example, a backdated increase in rateable value in future years that takes the property above the £200,000 threshold, or evidence that the criteria were not met.

Discretionary Fund Relief is subject to State Aid de minimis limits (read our State aid rules page for more information).

Discretionary Fund hardship relief - 2019 to 2020 and 2020 to 2021

We already consider requests for hardship relief under Section 49 of the Local Government Finance Act. In addition, the whole of the discretionary fund for 2020 to 2021, and a small proportion of the discretionary fund for 2019 to 2020, has been set aside to provide help to businesses facing hardship as an indirect result of the revaluation.

We do not have an application form for hardship relief as every case will be assessed individually. In the first instance, applicants should write in with details of their current circumstances, bearing in mind the criteria below. If necessary, we will then request any additional information that we need.

When a ratepayer applies for hardship relief, we will consider whether help should be provided under Section 49 or the Discretionary Fund. The ratepayer only needs to make one application.

We are unlikely to give discretionary relief to a business that has been trading for less than three years. We expect that such a business would have planned for payment of the business rates, and allowed for contingency in their business plans.

We are unlikely to help a business that faces difficulties so severe that it will fail even with rate relief. In this instance it would not be good use of public funds, even if the business is important to the community.

Criteria for hardship relief

i. The ratepayer will face hardship if discretionary relief is not granted. The ratepayer should explain the hardship that they are facing, and what other steps they are taking to minimise or avoid it. The applicant should provide copies of their last three years' accounts, and their current business plan. They should also explain how much discretionary relief they are seeking, and for how long.

ii. The business is important to the local community or economy. This could mean that the business is a large local employer, or provides a unique and valued service to the community. The applicant should explain why their business is important to the local community or economy.

iii. The business has been adversely affected by the revaluation. This may take various forms including neighbouring businesses going into administration or closing. The applicant should explain how they have been affected.