Reliefs and reductions

5. Hardship Relief

The billing authority may reduce or remit the whole or part of the rates payable by a ratepayer, provided that:

  • The ratepayer would sustain hardship if the authority did not do so, and
  • It is reasonable for the authority to do so having regard to the interests of persons liable to pay Council Tax set by it.

Definition of hardship

It is an essential requirement of a decision to reduce or remit Business Rates that the ratepayer would sustain hardship if the authority did not do so.

In the case of a shop the hardship would be the likelihood that the ratepayer may have to cease trading, remembering that rates form only part of a business's expenditure.

In this financial assessment only the trading accounts for the business will be taken into account and no other sources of income.

Due regard will be taken of the different ways that the 'profit' from a business will be disregarded. For example, those relevant to living accommodation included within the business premises.

Net profit should be adequate to produce a reasonable rate of return on capital.

The obligation to show hardship must lie with the ratepayer and no decision will be taken unless the necessary evidence is produced. This includes accounts showing the financial position of the business for at least the last financial year.

An individual judgement will be made in each case on the existence of hardship and to ensure consistent treatment.

Interest of the council tax payers

In many respects this is far more difficult to define, however the general concept to be borne in mind is that the purpose of this particular scheme is the maintenance of services to the public, not the general support of ailing businesses.

Each case will be judged on its merits. To grant the relief a shop must be of significant value to the local community. There may be many shops in financial difficulties but only if the shop were an important amenity would this requirement be met.

How much hardship relief can be granted?

Where hardship is established and remission is in the interests of the Council tax payers, the amount remitted could be up to 100% of the rates payable.

Who pays for the relief?

Central Government meets 75% of the cost of hardship relief. The local council tax payers meet the rest of the cost.

Guidelines for applying for the relief

All applicants will be required to provide full information including:

  • Accounts for the previous financial year

  • A description of the activities of the business and its likely clientele

  • The applicant's reasons as to why this particular business should be considered for relief, taking into account the parameters set out earlier in this scheme. No applicant will be considered unless and until all the above information is received.

What will happen next?

We aim to assess your claim within eight weeks, however if we are unable to do so we will advise you of how much longer it is likely to take.

Once your claim is assessed we will inform you of the decision in writing.