The Vale of Glamorgan Council
Cabinet Meeting: 29 June, 2015
Report of the Leader
Non Domestic Rates - Retail Rate Relief 2015-16
Purpose of the Report
1. To consider and recommend adoption of a new grant-funded Business Rates Discretionary Policy called Retail Rate Relief to support businesses in Wales who are responding to the challenges that result from the changing retail environment and contributing to the development of sustainable and vibrant town centres.
1. Adopts the Retail Rate Relief Scheme 2015-16 in accordance with the provisions contained in Section 47 of the Local Government Finance Act 1988, to supplement the Council’s discretionary rate relief scheme.
2. Resolves to use the Welsh Government grant of up to £811,113 in accordance with the model resolution attached at Appendix C.
3. Delegates the operation of the scheme to the Section 151 Officer (or in their absence the Deputy section 151 Officer), in consultation with the Leader as Cabinet Member for Finance.
Reasons for the Recommendations
1-3. To enable the Council to implement the Retail Rate Relief scheme and utilise the Welsh Government grant in accordance with the scheme conditions in support of the local business economy.
2. As part of the Welsh Government's Business Rate Policy Developments the Minister for Economy, Science and Transport recognises that the retail sector is changing, particularly due to internet shopping and many high streets have to adapt to changing consumer preferences in how people shop.
3. Grant funding is consequently being made available by Welsh Government in a letter dated 20th May 2015 to Local Authorities through the Retail Rate Relief scheme to support businesses in Wales that are responding to the challenges that result from this changing retail environment. It is also aimed at contributing to the development of sustainable and vibrant town centres.
Relevant Issues and Options
4. The Welsh Government has announced that it will provide a grant of up to £811,113 to the Council to support retail rate relief of up to £1,500 on the business rates bill for all occupied retail properties with a rateable value of £50,000 or less in the financial year 2015/16, subject to State Aid limits.
5. It is intended that this scheme will operate from 1 April 2015 to 31 March 2016 subject to the acceptance by the Council of the associated grant offer. Due to the short timeframe for acceptance (30th June 2015) this was exercised by the Managing Director using emergency powers. Consideration will be given by Welsh Government as to whether the relief will be made available for subsequent years during 2015/16.
6. The Relief will be for individual local billing authorities to decide to grant in accordance with the provisions contained in section 47 with the Welsh Government reimbursing local authorities for the relief that is provided in line with the guidance at Appendix A which has been prepared by the Welsh Government.
7. Due to the State Aid requirements, the Scheme will be application based. Local authorities are responsible for providing ratepayers with clear and accessible information on the application process.
Retail Rate Relief Scheme
8. The policy will benefit properties which are occupied hereditaments with a rateable value of £50,000 or less, that are wholly or mainly being used as retail premises, that is, shops, restaurants, cafes and drinking establishments.
9. The relevant hereditaments for the purposes of the scheme, “shops, restaurants, cafes and drinking establishments” are set out in the Appendix.
Hereditaments that are being used for the sale of goods to visiting members of the public:
Hereditaments that are being used for the provision of specified services to visiting members of the public:
Hereditaments that are being used for the sale of food and/ or drink to visiting members of the public:
10. To qualify for the relief the hereditament should be wholly or mainly being used as a shop, restaurant, café or drinking establishment. This is a test on use rather than occupation. Therefore, hereditaments which are occupied, but not wholly or mainly used for the qualifying purpose will not qualify for the relief.
11. The list set out is not intended to be exhaustive as it would be impossible to list the many and varied retail uses that exist. There will also be mixed uses. However, it is intended to be a guide as to the types of uses that the Welsh Government considers for this purpose to be retail. Authorities should determine for themselves whether particular properties not listed are broadly similar in nature to those stated and, if so, to consider them eligible for the relief. Conversely, properties that are not broadly similar in nature to those listed should not be eligible for the relief.
12. As the grant of the relief is discretionary, authorities may choose not to grant the relief if they consider that appropriate, for example where granting the relief would go against the authority’s wider objectives for the local area.
13. The Appendix also lists the types of uses that the Welsh Government does not consider to be retail use for the purpose of this relief.
Hereditaments that are being used wholly or mainly for the provision of the specified services to visiting members of the public:
Hereditaments that are not reasonably accessible to visiting members of the public
14. The total amount of government funded relief available for each property for 12 months under this scheme is £1,500. The amount does not vary with rateable value and there is no taper. There is no relief available under this scheme for properties with a rateable value of more than £50,000.
15. The eligibility for the relief and the relief itself will be assessed and calculated on a daily basis.
16. Wales Retail Relief can be provided in addition to Small Business Rates Relief as well as any hardship or discretionary relief awarded by the local authority. The relief will be applied against the net bill after the other reliefs have been applied.
17. After any other relief the maximum amount of this relief will be no more than the value of the net rate liability.
18. Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties, subject to State Aid de minimis limits.
19. A model application form has been provided by the Welsh Government for the scheme and is attached at Appendix B.
20. The Council must make the business community aware of the schemes by letter and through its usual channels.
21. The grant conditions require the Council to resolve to adopt these discretions using a model resolution at Appendix C and confirm their acceptance by authorised signatory.
Resource Implications (Financial and Employment)
22. The Welsh Government will fund the schemes by way of a specific grant equal to the relief granted up to £811,113 together with administration costs to a maximum of £1,500 for the introduction, implementation and administration of the scheme.
23. The scheme cannot apply to Welsh/UK Government; Public Authority; the Crown or any similar organisation
Sustainability and Climate Change Implications
24. There are no direct climate change implications, however, the Council needs to ensure that measures put in place to ensure the scheme is financially sustainable.
Legal Implications (to Include Human Rights Implications)
25. The Council will be required to implement the scheme in accordance with the provisions contained in the Local Government Finance Act 1988 and associated Welsh Government Regulations.
Crime and Disorder Implications
26. Commercial areas will be regenerated and may encourage empty business properties to be brought into occupation and provide security of buildings.
Equal Opportunities Implications (to include Welsh Language issues)
27. Each application must be dealt with on its own merits, but will follow the guidance set out by the Welsh Government and comply with the resolution made.
28. The Welsh Government has assessed the equality implications of the scheme.
29. The service objective is to administer the Non Domestic Rates.
Policy Framework and Budget
30. This is a matter for Executive decision.
Consultation (including Ward Member Consultation)
31. Not Applicable
Relevant Scrutiny Committee
32. Corporate Resources
Nigel Smith- Revenues and Benefits Manager
Alan Jenkins- Head of Finance/ Section 151
Alan Jenkins- Head of Finance/ Section 151