Agenda item

Purpose of Report

To provide the Joint Committee with an update on current issues within non-domestic rates.

Decision

That the report be noted.

Alternative Options Considered and Rejected

None.

Reason for Decision

Supporting Small Business Relief Scheme 2017/18 – 2020/21

The number of hereditaments that had been identified for 2018/19 and had benefitted from the scheme as at 30 June 2018 for each of the three authorities was as follows:

·         City of Lincoln – eight had been identified, five had responded and a total award of £7,007 had been made;

·         North Kesteven – 23 had been identified, 18 had responded and a total award of £24,178 had been made;

·         West Lindsey – 26 had been identified, 15 had responded and a total of £19,926 had been made.

Support for Pubs Scheme 2017/18 – 2020/22

The number of application forms returned as at 30 June 2018 were noted as follows:

·         City of Lincoln – 63 had been identified and 24 awards had been made totalling £23,975;

·         North Kesteven – 40 had been identified and 30 awards had been made totalling £28,371;

·         West Lindsey – 59 had been identified and 29 awards had been made totalling £26,118.

Discretionary Relief Scheme 2018/19

During quarter one of 2018/19 officers had undertaken a number of exercises to correctly identify those ratepayers who may be entitled to relief and calculated the cost of relief for all businesses affected by the revaluation, whereby the 2018/19 charge had increased as a result.

Since 2017/18 the number of accounts identified for all three districts had decreased and as a result the value of relief awarded was as follows:

·         City of Lincoln – this was a banded scheme and the reward had remained the same for all bands with the exception of those facing an increase of between £25 and £500. The relief to be awarded for 2018/19 had increased from 50% to 70%, providing additional support to those ratepayers;

·         North Kesteven – this was a banded scheme and the award had remained the same for the first two bands but all others had reduced to 80% of the 2017/18 award;

·         West Lindsey – this was a percentage reduction scheme, with all identified ratepayers receiving a 50% reduction. This was a decrease from 2017/18 of 80%.

Chief Finance Officers had delegated authority to approve the 2018/19 scheme and, as a result, the relief had been awarded to all accounts identified and ratepayers had been issued with a decision notice and letter of explanation. This was much earlier than for the 2017/18 scheme and in doing this ratepayers could declare whether any relief awarded would not exceed the state aid limit.

A review of awarded relief would take place during November and December 2018. As a result, the schemes may be adjusted to ensure all funding was awarded up to 30 September 2019. The respective table set out in paragraph four of the report showed the number of accounts identified and the total cost of relief for both 2017/18 and 2018/19 for comparison purposes.

Business Rate Pilot – 100% Business Rates Retention in 2018/19 and 75% in 2019/20

Based on an assessment of the amount of business rates that were expected to be collected during 2018/19, the additional resources currently estimated to be retained through the pilot was £18.6 million, of which £1.4 million was attributable each to the City of Lincoln and North Kesteven. Although the bids were only awarded for a one year period, the 2018/19 Local Government Finance Settlement promised a further round of new pilots in 2019/20.

Prior to the summer recess the Government took the opportunity to announce its plans for the 2019/20 business rates retention pilots. The main points included as part of that announcement were set out in paragraph 5.4 of the report.

Following consideration by the Chief Executives and Section 151 Officers, a bid for 2019/20 pilot status based on the existing pilot authorities was submitted in September. As part of the bid submission, a request had been made to form a Lincolnshire business rate pool should the 100% business rate retention not be approved. The outcome of the pilot bid was expected to be received at the time of the Local Government Finance Settlement scheduled for 6 December 2018.

Autumn Budget 2018

The Autumn budget 2018 was announced on 29 October 2018 and key issues affecting business rates were noted as follows:

·         The cutting of bills by one third for retail properties with a rateable value below £51,000 for two years from April 2019 in recognition of the challenges high streets faced from changing consumer behaviour;

·         the introduction of business rates public lavatories relief;

·         the introduction of business rates local newspaper discount;

·         business rates treatment of self-catering and holiday let accommodation.

It was further announced that local authorities would be fully compensated for the loss of income as a result of the second and third measures, with further announcements expected as to how the first and fourth measure would be funded.

Recent Court of Appeal Decision – Automated Transaction Machines

In 2013 a decision was taken by the Valuation Office for Automated Transaction Machines built into the front of a shop or petrol station to have a separate business rates bill. This ruling was upheld in 2017. As a result, cash machines were brought into the Valuation Rating List but this was further appealed by large chain supermarkets. On 9 November 2018, large chain supermarkets had their appeal heard by the Court of Appeal and the case was won resulting in cash machines no longer being given separate business rates bills.

In terms of the impact locally, dating back to the 2010 list, this had the following implications for the shared service:

·         36 machines in Lincoln resulting in a refund of £612,000;

·         14 machines in North Kesteven resulting in a refund of £293,000;

·         10 machines in West Lindsey resulting in a refund of £206,000.

It was noted that there was provision in the budget for refunds as a result of decisions on appeals taken by the Valuation Office, although due to the significance of these particular refunds there may be a budget pressure should any other large refunds be awarded during this financial year. In discussing this matter, Members made the point that it was the Valuation Office’s decision to enter cash machines on the Valuation Rating List as opposed to local authorities.