Discretionary and Hardship Rate Relief Guidelines

Business Rates - Discretionary Rate Relief Guidelines

1. Introduction

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Cornwall Council recognises that the voluntary and community sector makes a major contribution to the economy, health and well being of the people who live and work in Cornwall.  However, Discretionary Rate Relief granted by Cornwall Council is paid for by the Council Tax payers and the Council has a duty to ensure that public funds are spent wisely and there is due transparency and accountability.  There were some anomalies with the guidelines put in place following the Council achieving unitary status in 2009 and it has been necessary to undertake a consolidation and harmonisation exercise in 2012. 

These Discretionary rate relief guidelines take into account the original intention of the legislation, which was to support charities and non-profit making organisations in their work in the local community and to help and support the Council’s corporate objectives.  The guidelines also take into account the principles of Cornwall Council’s budget strategy, which includes to protect service levels for universal services, protect vulnerable people wherever possible and to continue to achieve a high level of savings and efficiencies from reorganising the Council and restructuring services in order to protect front line services.

The main aims are for the Discretionary rate relief guidelines to be:-

  • Consistent and fair.
  • Clear and understandable for both ratepayers and personnel administering rate relief.
  • In the best interests of the people in Cornwall.

The application process is designed to ensure fairness and in carrying out the process the Council’s Officers will not be influenced by ethnic origin, race, gender, sexual orientation or religion.  In processing applications those involved will be treated fairly, with respect and courteously at all times.

2. Types of relief

There are two types of business rate relief – Mandatory and Discretionary.  The Local Government Finance Act 1988 requires local authorities to grant Mandatory rate relief to the following categories of Business Rates payer:

  • Registered charities.
  • Village Post Offices, general stores, specialist food shops, public houses and petrol filling stations – where they are in a designated rural settlement.
  • Registered Community Amateur Sports Clubs (CASCs).

The Local Government Finance Act 1988 also gives local authorities the power to grant Discretionary rate relief as follows:

  • To make a further award on top of Mandatory relief to those categories listed above; and also:
  • In respect of sports grounds and clubs;
  • To other non-profit making organisations;
  • To other rural businesses situated within a designated rural settlement.

3. Cost of relief

The cost of relief is currently borne jointly by Central Government and the Council as shown:

Relief typeCentral Govt costCornwall Council cost

Mandatory

50% of any Mandatory award

50% of any Mandatory award

Discretionary granted to top up Mandatory

50% of any Discretionary award

50% of any Discretionary award

Discretionary only (no Mandatory)

50% of any Discretionary award

50% of any Discretionary award

4. Guidelines for Discretionary rate relief

In normal circumstances, in order to be considered for Discretionary rate relief, Cornwall Council asks an organisation to meet criteria at all three levels shown below:

Level 1

Is the rate-paying organisation:-

  • a charity registered with the Charity Commission;
  • a Not-for-profit organisation;
  • a rural business situated within a designated rural settlement; or
  • a human lifesaving/rescue organisation

If none of the above, the organisation will not normally be considered for Discretionary rate relief.

Level 2

Charities

If the organisation is a charity registered with the Charity Commission and the property it occupies is wholly or mainly used for charitable purposes, 80% Mandatory relief will be granted.  Cornwall Council may increase the level of relief in these cases by allowing Discretionary rate relief up to a further 20%.  All the following conditions are normally required to be met:

  • The rate-paying organisation’s (or its local branch’s) outputs/services/facilities should be primarily for the benefit of the local community based in Cornwall.
  • The property should be wholly or mainly used for the organisation’s charitable purposes.
  • The principles of open access and provision of facilities should be demonstrated in the application (see note below*2).
  • If a charity shop - the shop should be only occupied by the registered charity, the charity should sell primarily donated goods and the charity should use the profits from sales for the purpose of that charity.

*2Open access – defined as membership being open to all sections of the local community taking into account the level of membership fees (excepting where the capacity of the facility is limited, or where the organisation actively encourages membership from particular groups in the community which the Council considers particularly deserving of support, e.g., young people, older age groups, persons with a disability, etc).  Provision of facilities – defined as providing training or education for its members, or providing facilities which directly relieve the authority of the need to do so or enhance and supplement those which it does provide.

Not-for-profit Organisations

For Discretionary rate relief purposes, a Not-for-profit organisation is one which is not established or conducted for personal or private profit, whose objectives are charitable, but it is not registered as a charity.

Mandatory rate relief is not awarded to Not-for-profit organisations, but Cornwall Council may award up to 100% Discretionary rate relief.  All the following conditions are normally required to be met:

  • The rate-paying organisation’s (or its local branch’s) outputs/services/facilities should be primarily for the benefit of the local community based in Cornwall.
  • The property should be wholly or mainly used for the organisation’s Not-for-profit making purposes.
  • The principles of open access and provision of facilities should be demonstrated in the application (see note above*2).
  • If a fundraising shop - the shop should be only occupied by the Not-for-profit organisation, which should sell primarily donated goods and should use the profits from sales for the purpose of that Not-for-profit organisation.

Rural businesses

Cornwall Council is committed to protecting facilities in rural areas, as this meets its priorities for improving the resilience of communities and protecting the vulnerable.

For Discretionary rate relief purposes, as specified in the Local Government Finance Act 1988, a rural business falling under this category is either the sole Post Office, general store, public house, petrol filling station or any food shop situated in a designated rural settlement or any other rural business situated in a designated rural settlement.

A designated rural settlement is defined as one which is:

  • situated wholly/partly within the authority area;
  • appears to have a population of 3,000 or less on 31 December prior to a chargeable year; and
  • designated as a rural settlement by the authority.

Post Offices, general stores, public houses, petrol filling stations and food shops – where the ratepayer is the occupier of one of these business premises they must, subject to the application of rateable value thresholds, be granted 50% in Mandatory rate relief.  Cornwall Council may increase the level of rate relief in these cases by allowing Discretionary rate relief by up to a further 50%. 

Other rural businesses – in addition to the businesses referred to above, Cornwall Council may give rate relief on certain other occupied property in a rural settlement where the rateable value is less than £16,500*3.  This will depend on the extent to which the loss of the facility would impact on the local community. 

*3 increased in line with Central Government up-rating at revaluation or other times.

Human lifesaving/rescue organisations

Cornwall Council considers that the organisations in this category provide a valuable service to the local community even though the umbrella organisations can be national charities.  Cornwall has one of the largest stretches of coastline in the UK and organisations such as the RNLI are vital to help protect local people and visitors to the county.  Similarly St John Ambulance, although a national organisation, provides training and activities for local people as well as attending local events to offer first aid services.

Level 3

The criteria normally used for level 3 are set out below:

Charities:                                                                      

GroupDiscretionary rate relief %

Charity shops

- Not part of an organisation operating outside Cornwall

up to 15

 

Charity shops

- Part of an organisation operating outside Cornwall

zero

 

Charity sports clubs, CASCs, public leisure facilities

- With a rateable value of over £20,000

up to 10

 

Charity sports clubs, CASCs, public leisure facilities

- With a rateable value of £20,000 or less

up to 15

 

Community / village halls

up to 20

Educational establishments (Pre-schools, nurseries, playgroups, toddler groups)

- Not part/franchise of an organisation operating outside Cornwall

up to 15

 

 Educational establishments (Pre-schools, nurseries, playgroups, toddler groups)

- Part/franchise of an organisation operating outside Cornwall

zero

 

 Educational establishments

- All other educational establishments

zero

 

Entrance fee paying organisations (e.g. art galleries, theatres, museums, tourist attractions, zoos)

- Where the max entrance fee is no more than £4.50/person

up to 15

 

 Entrance fee paying organisations (e.g. art galleries, theatres, museums, tourist attractions, zoos)

- Where the max entrance fee is more than £4.50/person

zero

 

Historic and heritage sites

zero

Hospice buildings

(excluding charity shops and offices)

up to 20

 

Housing Associations

zero

Youth organisations

(e.g. scouts, guides, cadets, surf lifesaving, youth clubs)

up to 20

 

Charities not included in above categories

 (Measured by community benefit)

up to 15

 

Not-for-profit organisations:

GroupDiscretionary rate relief %

Community / Village halls

up to 100

Educational establishments (Pre-schools, nurseries, playgroups, toddler groups)

- Not part/franchise of an organisation operating outside Cornwall

up to 75

 

Educational establishments (Pre-schools, nurseries, playgroups, toddler groups)

- Part/franchise of an organisation operating outside Cornwall

zero

 

Educational establishments

 - All other educational establishments

zero

 

Entrance fee paying organisations (e.g. art galleries, theatres, museums, tourist attractions, zoos)

- Where the max entrance fee is no more than £4.50/person

up to 75

 

Entrance fee paying organisations (e.g. art galleries, theatres, museums, tourist attractions, zoos)

 - Where the max entrance fee is more than £4.50/person

zero

 

Fundraising shops 

- Not part of an organisation operating outside Cornwall

up to 75

 

Fundraising shops

- Part of an organisation operating outside Cornwall

zero

 

Historic and heritage sites

zero

Housing Associations

zero

Not for profit sports clubs/ public leisure facilities

- With a rateable value of over £20,000

up to 35

 

 Not for profit sports clubs/ public leisure facilities

 - With a rateable value of £20,000 or less

up to 75

 

 Youth organisations

(e.g. scouts, guides, cadets, surf lifesaving, youth clubs)

up to 80

 

Not for profit organisations not included in above categories

(Measured by community benefit)

up to 75

 

Rural businesses:

Sole Rural Businesses:

CriteriaMandatory relief %Discretionary relief %

Sole Post Office or village store with a rateable value up to £8,500*3

50

 

50

 

Sole petrol station with a rateable value up to £12,500*3

50

50

Sole public house with a rateable value up to £12,500*3

50

zero

Other Rural Businesses:

NB: Situated in a rural settlement and where the rateable value does not exceed £16,500*3

CriteriaMandatory relief %Discretionary relief %

Measured by community benefit

zero

up to 50

*3 increased in line with Central Government up-rating at revaluation or other times.
 

Human lifesaving/rescue organisations:

Where a Mandatory award is applicable, a Discretionary award of up to 20% may be granted.  For Not-for-profit organisations, a Discretionary award of up to 100% may be granted. 

The use of the property should be considered, e.g., a store used to keep lifeboat equipment could be considered of value to a local community but an office used for administration may not have a direct value for the community.

5. Hardship relief

Decisions to be made on an individual case basis, taking into account legislation, guidance, case law and officer knowledge.  All applications in excess of £10,000 relief to be referred to the portfolio holder with a written report from the Corporate Director.  Amounts over £50,000 must have the approval of the Cabinet (subject to Governance review).

To ensure an auditable consistency in decisions and that the full financial facts are available, the following must be provided to support all applications:

  • Applications to be made in writing
  • Financial evidence for the current financial year and the two preceding years (to clearly show there has been a severe loss of trade due to ‘external’ factors)
  • Evidence to show it is in the interests of Cornwall’s taxpayers that the business is supported for a short fixed period by reducing or omitting rates payable.

6. Decisions on rate relief applications

The guidance allows an Officer panel to make decisions on individual rate relief applications.  It is hoped that the majority of applications can be determined in this way by Officers.

7. Appeals

If a ratepayer wishes to appeal against an Officer decision then the application will be reconsidered by the Head of Service and their decision will be final.

8. Periodic reviews

A Discretionary rate relief award can remain valid:

  • indefinitely; unless
  • the end date is specified; or
  • until the expiry of one full Council financial year after notice is given (e.g. notice given 20 March 2017, the existing award will remain in place until 31 March 2018); or
  • the liability ceases

These guidelines will be reviewed every five years in line with the Valuation Office’s revaluation cycle or if the Business Rates legislation is amended or as necessary to ensure it complies with current legislation and Cornwall Council’s priorities.