NATIONAL NON-DOMESTIC RATES

Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 09/03/2004
NATIONAL NON-DOMESTIC RATES - RATE RELIEF

1. Hardship provisions of the Local Government Finance Act 1988

1.1 Section 49 of the Local Government Finance Act 1988 gives a charging authority discretion to reduce or remit the payment of rates where an authority is satisfied that the ratepayer would (a) sustain hardship if it did not do so, and (b) it is reasonable for the authority to do so having regard to the interests of its Council Tax payers. For Member’s convenience, Section 49 is reproduced below:-

Section 49 - Reduction or remission of liability

(1) A charging authority may -

(a) reduce any amount a person is liable to pay to it under ss 43 or 45 above, or
(b) remit payment of the whole of any amount a person would otherwise be liable to pay to it under ss 43 or 45 above.

(2) But an authority may not act under this section unless it is satisfied that-

(a) the ratepayer would sustain hardship if the authority did not do so, and
(b) it is reasonable for the authority to do so, having regard to the interests of persons subject to its council tax levy.

1.2 The former Department of the Environment issued a Practice Note ‘Non-Domestic Rates - Discretionary Rate Relief’ which contains guidance on Hardship Remission and the following is an extract from that Practice Note:-

“6.2 The provisions contained in Section 49 to the Local Government Finance Act 1988 differ in two respects from the equivalent provision in paragraph 3A of Schedule 1 to the General Rate Act 1967 (inserted by Section 15(5) of the Local Government Act 1974). Firstly, before 1st April 1990, the power to reduce or remit applied only to unoccupied property rates, whereas the power in Section 49 may be exercised in respect of liability for both occupied and unoccupied property rates. Secondly, there is the requirement that, before exercising the power in Section 49, a charging authority must have regard to the interests of its council tax payers.

6.3 Whist it is for each authority to decide upon the facts of each case whether to exercise its powers under Section 49 - and to judge the extent of these powers - authorities may wish to bear the following guidance in mind:-

(i) although authorities may adopt rules for the consideration of hardship cases they should not adopt a blanket policy either to give or not to give relief each case should be considered on its own merits;

(ii) reduction or remission of rates on grounds of hardship should be the exception rather than the rule;

(iii) the test of ‘hardship‘ need not be confined strictly to financial hardship: all relevant factors affecting the ability of a business to meets its liability of rates should be taken into account;

(iv) the ‘interests’ of the council tax payers in an area may go wider than direct financial interests. For example, where the employment prospects in the area would be worsened by a company going out of business, or the amenities of an area might be reduced by, for instance, the loss of the only shop in the village;

(v) where the granting of relief would have an adverse effect on the financial interests of council taxpayers, the case for a reduction or remission of rates payable may still on balance outweigh the cost to council taxpayers.”

2. Financial Implications

Property Eligible for Rate Relief	Type of Relief	Amount of Relief	Proportion offset against payments into NNDR Pool	Proportion borne locally by council taxpayers
Property granted relief on grounds of ‘hardship’	Discretionary	Up to 100%	75%	25%

comms/executive/2003/2004/492 35936