About this guidance
This guidance provides ratepayers and local authorities with information about non-domestic rates (NDR) discretionary relief and hardship relief. It applies to Wales only and does not replace any existing NDR legislation or any guidance on other reliefs.
Billing queries about the reliefs should be directed to the relevant local authority. Contact details for local authorities can be found here. Enquiries about this guidance and the related legislation should be sent to the Welsh Government at the following email address: LocalTaxationPolicy@gov.wales
A range of other NDR reliefs are also available. Further information can be found on our Business Wales webpages.
Introduction
Local authorities have a range of powers to award discretionary reliefs to ratepayers. If a local authority decides to offer relief, it is good practice to award on the basis of eligibility criteria made available on the local authority’s website.
This guidance provides further information on the following powers available to local authorities to award discretionary relief:
- Hardship relief;
- General discretionary relief; and
- Discretionary relief for organisations which have a public benefit.
Hardship relief
Under section 49 of the Local Government Finance Act 1988 (the 1988 Act), local authorities have the power to grant relief of up to 100% to a ratepayer who is experiencing hardship if:
- the ratepayer would sustain hardship if the local authority did not award relief; and
- it is reasonable for the local authority to do so, having regard to the interests of local taxpayers.
Local authorities must also satisfy themselves that relief complies with Subsidy Control rules.
Local authorities may wish to award relief in the following circumstances.
- Where an organisation or business has suffered or will suffer financial hardship due to specific external factors. For example, a business may suffer a loss of trade following flood damage. A local authority may wish to ask for evidence to support this, e.g. business accounts.
- Where awarding relief may safeguard employment prospects in an area or a particular amenity.
- Where not providing relief would have an adverse effect on the short or long-term financial interests of taxpayers. The case for a reduction or remission of rates payable may still on balance outweigh the overall cost to taxpayers.
General discretionary relief
Section 47 of the 1988 Act also provides a general power to local authorities to grant discretionary relief.
This allows local authorities to grant discretionary rates relief if it would be reasonable to do so having regard to the interests of local taxpayers. The full cost of any relief granted under these powers must be borne by the local authority. The provisions were intended to enable local authorities to provide relief for ratepayers to reflect specific local circumstances which are not accommodated within one of the mandatory schemes. The powers are in addition to local authorities’ powers to provide relief in cases of hardship.
The 1988 Act does not set out any qualifying criteria for such relief. However, there is a public law expectation to ensure that decisions are made in a fair and consistent manner. Therefore, it is good practice for local authorities to agree a policy for awarding discretionary relief under these powers and to publish that policy.
This discretionary relief is not limited to not-for-profit organisations. Local authorities may use the powers to provide rates relief to any ratepayer in their area and have full discretion as to how they decide whether and what basis to provide relief – the intention of the discretionary power is to enable each local authority to take account of local needs and circumstances.
Discretionary relief for organisations which have a public benefit
As outlined in the guidance on charitable relief, the 1988 Act provides that properties occupied by charities and community amateur sports clubs are entitled to mandatory relief. Mandatory charitable relief is set at 80% and can be topped up to 100% at the discretion of the local authority.
Section 47 of the 1988 Act also provides that local authorities are able to grant general discretionary relief of up to 100% in cases where the property:
- is occupied by one or more organisations which are established or conducted for not-for-profit purposes and whose main objects are charitable or are otherwise philanthropic or religious or concerned with education, social welfare, science, literature or the fine arts; or
- is wholly or mainly used for purposes of recreation, and all or part of it is occupied for the purposes of a club, society or other organisation not established or conducted for profit.
If relief is awarded on this basis, the Welsh Government meets 90% of the cost and the awarding local authority meets the remaining 10%. Any relief awarded must be for the benefit of the local community and the local taxpayers in the local authority awarding the relief.