CHAPTER 3
Statutory Powers3.1 The main provision conferring the discretionary power on billing authorities to grant rate relief is to be found in Section 47 of the Local Government Finance Act 1988 (LGFA). Regulation 6 of the Non-Domestic Rating (Miscellaneous Provision) Regulations 1989 (SI 1989 No. 1060) deals with the situation where a hereditament straddles billing authority boundaries. Under section 47 authorities have discretion to grant rate relief to certain ratepayers from all or part of the amount of non-domestic rates payable. A decision to grant relief can have effect for a previous financial year provided the decision is made within six months of the end of the year and may be revoked by a further decision of the authority. The level of relief determined by an authority may be varied by a further determination.
3.2 The Non-Domestic Rating (Discretionary Relief) Regulations 1989 (SI 1989 No. 1059) allow a billing authority to grant the relief for a fixed period, and deal with the notice which must be given if that relief is varied or revoked. Regulation 2 requires that billing authorities must give notice when they decide to grant, revoke or vary the amount of discretionary relief awarded. One year's notice is required of any decision to revoke or vary the amount of relief granted if, in the case of a variation, it would result in the amount of rates paid by the ratepayer increasing. The notice must take effect at the end of the financial year. In other words, if notice of a change which could increase a ratepayer's bill is not given by 31 March, relief could continue at the same level (at least) for a further two years. If the variation will result in the amount of rates the ratepayer will pay decreasing the ratepayer should be notified as soon as practicably after the decision has been made.
3.3 It is very important that billing authorities have readily understood guidelines for deciding whether or not to grant relief and for determining the amount of any relief given. However, we would not recommend authorities to adopt a policy or rule, which allows or requires it to dispose of a case without any consideration of the merits of the individual case. The operation of blanket decisions to refuse relief across the board might well be ultra vires and could involve the authority in litigation. That does not preclude it from having general criteria against which it considers cases, but where it has these, it is a matter of good practice that applicants or potential applicants for relief are aware of them.
3.4 There is no statutory requirement for organisations to submit written applications for relief. The lack of a formal written application need not preclude authorities in any way from granting relief if it so wishes. In cases of mandatory relief, further applications are not required once relief has been granted and mandatory relief will stay in force until there is a change in circumstances causing the ratepayer or property to no longer to qualify for the relief. Whilst there is no time limit for applications to be made in cases of discretionary relief, authorities must determine applications within six months after the end of the financial year for which the application for relief is made. Determinations after this time are invalid.
3.5 It is a question of good practice that authorities encourage organisations to give details of all the matters they wish to be taken into account, and to provide any other relevant information. For example, information such as audited accounts, written constitutions, membership details etc. may assist an authority in considering the merits of each case. A number of authorities have produced proforma questionnaires to assist in this process.
3.6 Authorities can not grant discretionary relief from rates on property, all or part of which is occupied, other than as a trustee, by a billing or precepting authority (section 47(9)).
3.7 The amount of rates payable by charities is calculated by reference to formulae applicable to occupied or unoccupied property, as the case may be. The effect is that charities pay only 20% of the rates that a non-charity would pay. With regard to occupied property, two requirements must be met:
(a) the ratepayer must be a charity or trustees for a charity; and
(b) the hereditament must be wholly or mainly used for charitable purposes (whether of that charity or of that and other charities)(section 43(5)).
3.8 In relation to unoccupied property, the second requirement is modified so that it must appear that when next in use the hereditament will be wholly or mainly used for charitable purposes (whether of that charity or of that and other charities). In such circumstances, the charge is 10% of the full rate (Section 45(5)).
3.9 Section 45 of the LGFA 1988 deals with empty properties. All property unoccupied for a period not exceeding three months is entitled to full rate relief during that period (The Non-Domestic Rating (Unoccupied Property) Regulations 1989). If the property remains unoccupied beyond the three month free period, the owner/ratepayer will be liable for unoccupied rate of half the full rates. For the purpose of determining whether a property has been continuously unoccupied for three months, any period of occupation of less than six weeks is disregarded. This avoids the claiming of consecutive periods of relief after short terms of occupancy.
3.10 Certain types of unoccupied property do not pay empty property rates, even after the three month rate-free period. These include industrial properties, listed buildings and all small properties with rateable value of no more than £1,900 (The Non-Domestic Rating (Unoccupied Property) Regulations 1989).
3.11 Section 44A of the LGFA 1988 gives billing authorities the discretion to grant relief where it appears to the authority that that part only of a property is unoccupied and will remain so for a short time only. What constitutes a "short time only" is left for the billing authority to determine given the circumstances in each case. However, what a billing authority considers to be a short time should be applied consistently to all properties in their area. Billing authorities should decide what in their reasonable opinion, taking account the prevailing commercial property market, constitutes a short period. If local conditions merit it the provision could perhaps allow a different view as to what constituted a short period of time from one type of property to another e.g. if a particular sector of the local economy is weak etc. Where an authority proposes to exercise its discretion, it should seek an apportionment of the Rateable Value from the Valuation Officer.
Published 5 December 2002
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