Exemptions and reliefs for business rates

On 25 March 2021 the Government announced a new COVID-19 Additional Relief Fund (CARF) of £1.5 billion of which Sutton’s share is £4,066,022. The fund is available to support those businesses affected by the pandemic but that are ineligible for existing support linked to business rates.

The legislation required for this relief forms part of The Rating (coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021, which was given royal assent on 15 December 2021.

The £1.5 billion will be allocated to local authorities based upon the estimated rateable value in each local authority rating list which falls within the scope of the fund. 

The Government is not changing the legislation relating to the business rates reliefs available to properties. Instead they will, in line with the eligibility criteria set out in the guidance, reimburse local authorities where relief is granted using discretionary relief powers under section 47 of the Local Government Finance Act 1988. It will be for individual billing authorities to adopt a local scheme and determine in each individual case whether, having regard to the guidance and their own local scheme, to grant relief under section 47. The relief is available to reduce chargeable amounts in respect of 2021/2022. 

Billing authorities are responsible for designing the discretionary relief schemes that are to operate in their areas. However, in developing and implementing their schemes local authorities must: 

a) not award relief to ratepayers who for the same period of the relief either are or would have been eligible for the Extended Retail Discount (covering Retail, Hospitality and Leisure), the Nursery Discount or the Airport and Ground Operations Support Scheme (AGOSS), 

b) not award relief to a hereditament for a period when it is unoccupied (other than hereditaments which have become closed temporarily due to the government’s advice on COVID-19, which should be treated as occupied for the purposes of this relief), and

c) direct their support towards ratepayers who have been adversely affected by the pandemic and have been unable to adequately adapt to that impact.

In line with the legal restrictions in section 47(8A) of the Local Government Finance Act 1988, billing authorities may not grant the discount to themselves, certain precepting authorities (e.g. a parish or county council) or a functional body, within the meaning of the Greater London Authority Act 1999.

The relief will be applied after mandatory reliefs and other discretionary reliefs funded by section 31 grants have been applied. 

The Council has now devised its scheme as follows:

Qualifying Properties/Businesses

  • Properties that a business is occupying/trading from must have been in the rating list on the 15 December 2021.
  • The business must have been trading/in occupation of the property for six months or more during the 2021/2022 financial year.
  • Properties which have not received (or would not have qualified for) the Expanded Retail Relief or Nursery Relief.
  • Properties occupied by businesses which have a Business Rate liability to pay after all other mandatory and Section 31 reliefs have been applied to their Business Rates account.
  • Businesses that remained solvent during the 2021/2022 financial year

Exclusions from the CARF scheme

  • Businesses that do not pay business rates can not apply
  • Businesses that are in administration, are insolvent, struck off or where a striking-off notice has been made at any time during the financial year 2021-2022 are not eligible for funding under this scheme.
  • Businesses that are publicly funded will be excluded.
  • Businesses that cannot detail and where appropriate evidence that they have been adversely affected by the pandemic and have been unable to adequately adapt to that impact.
  • Applications for periods of occupation/trading of less than six months during 2021/2022 will not be considered.
  • Properties not in the rating list on the 15 December 2021. Properties subsequently brought into the rating list and backdated to a date before the 15 December 2021, will not be considered for this relief.
  • Properties which are unoccupied (other than for reasons attached to Covid restrictions) will not be awarded the relief.
  • Properties occupied by businesses who have already received ( or would have been entitled to) the Expanded Retail Relief or the Nursery Relief.
  • No relief will be granted to those businesses who already have no Business Rates liability, due to already receiving another mandatory or Section 31 Business Rate Relief
  • Relief will not be awarded on properties with certain Valuation Office property descriptions including but not limited to:
    • Communication station and premises
    • Community Centre and premises
    • Bank, office and premises
    • College and Premises
    • School and premises
    • Hospital and premises
    • Independent distribution network operator
    • Land used for storage and premises
    • Showroom and premises
    • Showroom, workshop and premises
    • Site of ATM
    • Sports ground and premises
    • Surgery and premises
    • Health centre and premises
    • Any other description which the Council does not feel is eligible under its discretionary scheme.
  • businesses that have exceeded subsidy allowances (see below)

Full details of the Council’s policy can be found on our website

Subsidy allowance

The CARF scheme is subject to the subsidies chapter within the UK-EU Trade and Cooperation Agreement (TCA). However, for CARF there is an exemption for subsidies under the value of approximately £2,243,000 per economic actor (broadly speaking, for example, a holding company and its subsidiaries). This allowance comprises 325,000 Special Drawing Rights (at current exchange rates about £343,000) for Small Amounts of Financial Assistance and a further £1,900,000 for COVID-19 related subsidy.

Therefore, to be awarded CARF you must not have claimed over the period 2019/20 to 2021/22 more than £2,243,000 from schemes which fell within the Small Amounts of Financial Assistance or COVID-19 related allowances. COVID-19 business grants you have received from local government and the 2019/20 Retail Relief should count towards this limit, but you should not count any Extended Retail Discount you have received since 1 April 2020.

Further details of subsidy control can be found via Gov.uk

In your application for CARF you will need to indicate:

  • if you have not to date received any subsidy which fell within the Small Amounts of Financial Assistance or COVID-19 related allowances, confirm this in your application,

or

  • if you have received other such subsidies, then you should provide the name and total value of those subsidies.

If you have already exceeded the £2,243,000 allowance we will still consider applications for support under the CARF scheme if you have reached this limit provided you can evidence that you:

  • Intend to use the support to fund uncovered fixed costs (costs not covered by profits for insurance etc) during the period of COVID-19. Economic actors may claim for up to 70% of their uncovered costs (although this 70% limit does not apply to small businesses with less than 50 employees and less than £9 million turnover where the limit is instead 90%),

and

  • have shown a decline in turnover of at least 30% within the April 2020 to March 2021 period, compared to the same 2019 to 2020 period.

You may claim up to a further £10 million of additional allowance (on top of the £2,243,000) if you meet the above tests and you have not claimed any other support from the additional allowance up to an aggregate £10 million limit (such as from the COVID-19 business grants).

The Government and London Borough of Sutton  will not tolerate any business falsifying their records or providing false evidence to gain this discount, including claiming support above these thresholds. A ratepayer who falsely applies for any relief, or provides false information or makes false representation in order to gain relief may be guilty of fraud under the Fraud Act 2006.

Level of relief 

Awards will be in the form of a reduction to business rates bills for 2021/2022 only and no direct payments will be made to businesses. 

The level of relief cannot be determined until all applications have been reviewed and approved. 

To determine the value of relief the following calculation will be made. 

The rateable values (RV) of all successful applications will be totalled. The funding available will then be divided by the total of the RV to determine the percentage reduction based on the rateable value of each qualifying business. The % will be the same for all sizes of business premises. 

The relief will be calculated after all other statutory reliefs have been applied and the relief will be capped where the business rates bill is reduced to zero. The award of relief will not generate a negative balance payable i.e. the award cannot be greater than the liability for the 2021/2022 financial year.

All reliefs will be allocated to the 2021/22 rates bill. If after the relief is awarded the balance for the year is in credit due to payments having been made, this credit will be carried forward to the 2022/23 bill and instalments recalculated. 

Refunds will not be issued as a result of this process. 

Businesses will be required to confirm that they meet the criteria of the scheme, and that the amount of relief is not in excess of the Subsidy Control Arrangements. 

Application Process

If you have read the above guidance and believe you are entitled to this relief you can apply by completing this online form.

You will have to detail how you have been adversely affected by the pandemic and have been unable to adequately adapt to that impact.

Evidence will be required to validate your application. This information may include, bank details for the business, evidence of trading, evidence or declaration that the business has been adversely affected by the pandemic and have been unable to adapt.

Applications will close at 11.59pm on Friday 16 September 2022. 

You will be notified of the decision by email and will receive a revised business rates bill if your application is successful. 

If you pay business rates on more than one Sutton property you need to make a separate application for each business premises.

The progress and results from the scheme will be reported to the Department for Business, Energy and Industrial Strategy and successful applicants may be published on our website.

The BEIS privacy notice, setting out how BEIS will handle personal data across all COVID-19 business grant schemes, can be found in the gov.uk website. 

The London Borough of Sutton’s Council Tax and Business Rates privacy notice can be found online. 

Appeals  

Sutton is not required to provide a right of appeal against any decision as grants awarded under the Covid Additional Relief Fund scheme are discretionary awards.