17. Relief
Relief from a liability for the
business rate can be awarded in the following circumstances.
Decisions regarding relief may be challenged by judicial review, a
process where an application is made to the High Court for a
decision to be reviewed.
17.1 Mandatory relief for
charities
Where the occupier of a property is a charity
and the property is used for charitable purposes then relief of 80%
of the amount payable for that property will be awarded. If the
property is empty, the owner is a charity and it appears that when
next occupied it will be used for charitable purposes then the
relief will be 90% of what would have been payable had the property
been occupied.
A charity is defined as an 'Institution or other
organisation established for charitable purposes only or any
persons administering a trust established for charitable purposes
only'. Registration with the Charity Commissioners is confirmation
of a charity's status and the Church Commissioners, Boy Scouts,
Girl Guides, Friendly Societies, and voluntary schools with no
permanent endowment are charities exempt from registration.
There is no definition of
'charitable purpose' in business rate legislation but there is a
large body of case law for guidance. Charitable purpose involves
the relief of poverty, the advancement of religion and education,
and other purposes beneficial to the community. Charity shops are
specifically defined as being used for charitable purposes if they
are used wholly or mainly to sell donated items and the whole of
the proceeds, minus expenses, are used for the purpose of the
charity.
17.2
Discretionary relief for charities
A billing authority has the discretionary power
to award rate relief of up to 100% of the business rate liability
of a property occupied by a charity or an unoccupied property where
the 'owner' is a charity. The decision must be made no later than
six months after the year to which the relief relates and to
qualify the occupier and purpose of the occupation has to be the
same as for mandatory charity relief or the
occupier is one or more organisations not conducted for profit and
whose objectives are charitable.
The definition includes a property used for the
recreational purposes a club or society not conducted for profit.
'Not conducted for profit' means any excess income is ploughed back
into the charitable activities of the organisation. In considering
whether relief should be awarded a billing authority will take into
consideration matters such as access to the activities of the
charity, the type of facilities regarding, say, training open to
users, and whether the facility relieves pressure on council
services.
17.3 Mandatory relief for certain
properties within rural settlements
The Government designates areas and each
billing authority in whose district there is a designated area must
draw up a list of any settlement in that area where the population
appears to be less than 3,000. This is called the 'rural settlement
list' and in prescribed circumstances certain types of property,
generically known as 'village shops', within a rural settlement
area will be entitled to rate relief of 50% of the rate due.
These types of property are:
- General Stores
- Post Offices
- Public Houses
- Petrol Stations
- Food Shops
- A combination of the above.
The criteria for a property to be a
prescribed as a category of shop eligible to receive the relief is
as follows:
A general store must be a property used
wholly or mainly for the sale of food
and general household goods.
The post office, public house, and petrol
station are self-explanatory.
The food shop must sell food for human
consumption but does not include a confectionary shop or a shop
providing catering services.
In all cases, apart from the food shop, there
should be no other 'village shop' in the settlement area carrying
on the same business.
The rateable value of the general store, post
office, or food shop does not exceed £5,000 in Wales and £6,000 in
England.
The rateable value of the public house or
petrol station does not exceed £9,000.
Additionally relief may be granted to
small-scale non-agricultural businesses using properties which were
formerly classified as agricultural land and buildings and so
exempt from business rates. An example of a property which could
qualify for relief under this provision would be a small
engineering workshop.
The definition of a rural
settlement for discretionary relief is the same as that
prescribed for mandatory relief. The criteria of properties for
which discretionary relief can be considered are the same as for
mandatory relief, and properties where the rateable value does not
exceed £10,000 in Wales and £12,000 in England.
Where the property is not a general store, post
office, petrol station, public house or food shop, discretionary
relief may be considered based on whether the use of the property
is of benefit to the local community and taking account of the
interest of the general body of council tax payers. The relief may
be awarded for up to 100% of the liability and the decision must be
made before the end of the September of the year following the year
for which it is awarded.
As with mandatory relief, properties which were
formerly agricultural can also be given discretionary relief.
17.5 Partly occupied
property
A billing authority may award relief on a
property that is occupied but where a part of the property will be
'unoccupied' for a short period. A certificate splitting the
rateable value between the occupied and unoccupied parts is
requested from the Valuation Officer and the relief is 50% of the
amount due on the unoccupied part. However if the unoccupied part
would be exempt if shown separately then the relief will be 100% of
the amount due on the unoccupied part.
The relief will commence from the date the part
became unoccupied and will cease from whichever is the earliest of
the re-occupation date of the unoccupied part, the end of the year
for which the relief was awarded, or a new relief is awarded.
17.6 Hardship
A billing authority has the power to reduce or
remit a business rate liability if the ratepayer would sustain
hardship if they did not do so and it is in the interest of the
general body of taxpayers for them to do so. There is no statutory
definition of hardship but case law says that each case must be
considered on its merits, that relief will be the exception rather
than the rule, and it is not necessary for the hardship to be
financial. Examples are where relief may be given to help stop a
factory closing down in an employment black spot or where unusual
planning difficulties are preventing a disposal of a property
despite otherwise favourable conditions.