Legislation
Section 49 of the Local Government Finance Act 1988 allows Councils to award discretionary relief to ratepayers suffering financial hardship, provided it is reasonable for the authority to do so, having regard to the interests of its Council Tax payers.
Framework
The Council will consider all requests for a reduction on an individual basis. There are financial implications on local Council Tax payers by awarding Discretionary Relief so the Council must ensure that granting Hardship Relief benefits the wider community as well as the ratepayer concerned.
Discretionary Scheme Principles
- a) There must be evidence of unexpected, exceptional hardship
- b) The circumstances under consideration are outside of the rate payer’s control and outside of the normal risks of running that type of business
- c) The rate payer must not have access to assets or savings that could be realised and used to pay the Business Rates.
- d) The taxpayer must satisfy the Council that all reasonable steps have been taken to resolve their situation prior to application.
- e) Applications will be granted in exceptional circumstances and where other eligible discounts, reliefs, exemptions, Valuation Office / Valuation Tribunal action or appeals have been considered and exhausted.
- f) The interest of local Council Tax payers may include employment prospects in an area being drastically reduced if the ratepayer goes out of business, or the amenities of an area might be reduced by, for example, the loss of a neighbourhood shop.
- g) The applicant is unlikely to qualify if:
- The applicant has other businesses
- The property is unoccupied
- The ratepayer belongs to a group of companies
Application
An application must relate to the current financial year, unless the liable person has just received an account following late valuation for a previous year (s).
The application must be in writing or via email from the rate payer or someone authorised to act on their behalf.
Make an application - send an enquiry
The Council may require the applicant to provide documentation covering the financial circumstances in support of the application. No costs will be borne by the Council in the provision of this evidence. This information should include, but is not restricted to:
- Past 2 years audited accounts
- Cash flow forecast for a minimum of the next 12 months
- Order books
- VAT returns
- Any other appropriate information
The Council reserves the right to verify and validate the financial information provided.
The application must set out the circumstances upon which the request is based and why the relief is required.
If information or evidence requested has not been received within 21 days of the Council’s request then the Council will close the application and no award will be made.
The Council may refuse to award a reduction where lack of information / evidence does not enable the Council to reach an informed decision regarding the applicant’s circumstances.
Decision Process
When making its decision the Council will consider:
- a) any other available reliefs or discounts etc have been applied for or granted
- b) the impact on local Council Tax payers of any award being granted
- c) the impact on the local area of any award not being granted.
- d) any actual or perceived bias that may occur if an award is granted to a ratepayer that is not ‘unique’ to the area or not operating in a ‘unique’ business field.
- e) whether there are reasonable expectations that the business will return to economic viability.
The above list is not exhaustive and other relevant factors and special circumstances will be considered.
Any decision to award a S49 reduction does not guarantee that a further award will be made at a later date even if the applicant’s circumstances have not changed.
If a reduction is granted it will not continue beyond the end of the tax period for which it is claimed.
Any award made will be direct onto the ratepayer’s Business Rate account, thereby reducing the amount of Rates payable.
The reduction is intended as short term assistance only and must not be considered as a way of reducing Business Rates long term.
If there is a change in circumstances which means that it is no longer appropriate for an award to be made, then the Council may end or adjust the award as appropriate.
The Council will provide a written notice of its decision to the applicant or their representative within 28 days of receiving sufficient information to make a decision.
The decision will specify:
- The amount of the award (if appropriate)
- The period of the award (if appropriate)
- In the case of a refusal the reason(s)
- Details of how to ask for a reconsideration / appeal
Re-Considerations / Appeals
The request for a reconsideration must be made in writing to the Director of Finance within 28 days of date of the original decision letter.
Fraud
The Council is committed to the fight against fraud in all its forms. Any applicant who tries to fraudulently claim a S49 discount might have committed an offence under the Fraud Act 2006.
If the Council suspects that fraud may have occurred, the matter will be investigated as appropriate and could lead to criminal proceedings.