Introduction
From 1 April 2023 Mendip District Council, Sedgemoor District Council, Somerset West and Taunton Council, South Somerset District Council, and Somerset County Council are being amalgamated into a single new Council called Somerset Council.
The creation of a single Somerset Council requires a single unified approach to Discretionary Rate Reliefs to ensure fairness and consistency across the whole of Somerset.
The District Councils are in the process of writing to all charities, not-for-profit organisations, sports grounds and clubs, and rural businesses that are existing recipients of discretionary relief to invite them to claim under the new scheme, where the ratepayer believes they will meet the new eligibility criteria from 1 April 2023.
All existing ratepayers wishing to apply for discretionary rate relief will be required to make a new application before 1 April 2023. Current awards will not roll over by default.
The letters will explain how and where applications can be made under the new scheme.
Discretionary Rate Relief – for charities, not-for-profit organisations and sports grounds and clubs
Background
Section 47 of The Local Government Finance Act 1988 gives local authorities the power to grant Discretionary Rate Relief as follows:
To make a further discretionary award to top-up Mandatory relief to
- Registered charities, and
- Registered Community Amateur Sports Clubs (CASCs)
Please note – Certain businesses in designated rural settlements receive Rural Mandatory and top-up relief. These businesses will not need to reapply as the top-up relief will continue to be funded by Government.
and also discretionary only awards
- In respect of sports grounds and clubs
- To other not-for-profit organisations
- To other rural businesses situated within a designated rural settlement
The amount of the discretionary award to be made is for each council to decide. It can decide to make no discretionary award in particular cases.
The cost of relief is currently borne equally by Central Government and the Council.
Key changes in our approach for 2023/24
Since the new approach will not exactly mirror the approach of any of the current four District Councils, there will inevitably be changes to the amount of relief that some organisations may receive from 1 April 2023. Some will cease to qualify altogether.
Key features of the new approach to Discretionary Rate Relief for the organisation types above are:
- Organisations must be wholly or mainly ‘Somerset-based’ and must wholly or mainly be providing services for the Somerset area in order to be considered
- The maximum discretionary relief award is capped at £10k per property per annum, and
- Schools are specifically excluded (Somerset-based playgroups, pre-schools, and child nurseries however will continue to qualify)
Our approach from 2023/24
Organisations meeting the criteria outlined above will receive relief as detailed below for 2023/24.
| Relief Type | Relief and summary qualifying criteria |
|---|---|
| Mandatory Recipients – ‘Top Up’ (Discretionary) Excluding CASCs | 20% for all local (wholly or mainly Somerset Based) Charities |
| Discretionary Relief – Non Profit Making organisations | 75% for all local (wholly or mainly Somerset Based) organisations |
| Discretionary Relief – Non Profit Making Recreation Clubs | 75% for all local (wholly or mainly Somerset Based) recreation clubs All clubs are encouraged to claim CASC status |
| Mandatory Recipients – ‘Top Up’ (Discretionary) CASCs | 20% for all local (wholly or mainly Somerset Based) CASCs |
| Rural Rate Relief – Discretionary Only (small number of cases that fall with the criteria) | 75% for all local (wholly or mainly Somerset Based) rural businesses within designated rural settlements and which can demonstrate that they are of significant benefit to the local community. |
Appendices A to D of our Discretionary Rate Relief Policy provides further detail about our approach.
Apply for Discretionary Rate Relief
Each District Council is in the process of writing to the organisations currently in receipt of discretionary rate relief where they will need to reapply. The letter will explain how and where to submit applications.
Hardship Relief
Somerset Council will have the power to remit or reduce rates under Section 49 of the Local Government Finance Act 1988 on the grounds of hardship. arising from exceptional circumstances, or short-term crisis beyond the business’ control and outside of the normal risks associated with running a business of the type concerned.
Hardship Relief will not be granted in respect of an unoccupied premises or where there is little or no expectation of economic survival.
Appendix I of our Discretionary Rate Relief Policy outlines our approach to exercising this power.
Local Discount – Localism Act
Section 69 of the Localism Act 2011 amended Section 47 of the Local Government Finance Act 1988. These provisions allow all Councils to grant short-term discretionary relief of up to 100% where awarding of the relief is beneficial to the community.
The Council will consider any applications for relief under these provisions against criteria within our Discretionary Rate Relief Policy, and the amount of any relief granted will be dependent on the overall level of alignment with our criteria.
Appendix E of our Discretionary Rate Relief Policy outlines our approach to exercising this power.