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Title |
Discretionary Rate Relief Policy for Non-Domestic Rates |
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Purpose of the report |
To make a decision |
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Report Author |
Sandy Muirhead Group Head Commissioning and Transformation |
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Ward(s) Affected |
All Wards |
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Exempt |
No |
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Exemption Reason |
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Corporate Priority |
Services
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Recommendations
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Committee is asked to: Agree to the Non-Domestic Rate Discretionary Rate Relief Policy
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Reason for Recommendation |
Councils have the power to grant discretionary rate relief to organisations that meet certain criteria. Public funds are however limited, a proportion of the costs of relief granted is borne by the council taxpayers. Therefore, a policy has been developed to make it clear to organisations the discretionary rate relief level. |
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What is the situation |
Why we want to do something |
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• The current Non-Domestic rates discretionary relief policy is outdated as it was last fully reviewed in 2015 with some minor amendments undertaken in 2021/22 just after Covid. |
• To update our discretionary rate relief policy to provide clarity to organisations wishing to apply for further rate relief. |
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This is what we want to do about it |
These are the next steps |
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• To formulate a revised policy which provides clarity to charities and non-profit organisations seeking to apply for business rate relief over and above the standard 80% mandatory rate relief. |
• To implement the discretionary rate relief policy which will be reviewed in 2029 subject to their being no further legislative changes. |
1. Summary of the report
1.1 This report seeks to update our discretionary rate relief policy on non-domestic rates to make it clear to appropriate organisations the qualifying criteria for accessing rate relief.
1.2 This report therefore is seeking approval for the new policy.
2. Key issues
2.1 Section 47 of the Local Government Finance Act 1988 enables the Council to exercise discretion to award rate relief in respect of properties occupied by charities and other not-for-profit organisations. This includes the additional powers given to Councils by Section 69 of the Localism Act 2011 which amended Section 47 of the Local Government Finance Act 1988. The previous discretionary rate relief policy was last fully reviewed in 2015 with minor amendments in 21/22. Business rates were fully occupied for the Covid years in ensuring distribution of government grants hence only minor amendments were made. Therefore, there is a need ensure the policy is up to date.
2.2 The Local Government Finance Act 1988 requires the Council to grant mandatory rate relief of 80% of the business rates to the following categories:
· Charities where the property is wholly or mainly used for charitable purposes
· Registered Community Amateur Sports Clubs (CASCs) for any club with appropriate registration with the HMRC.
· Rural shops – (Not applicable in Spelthorne Borough)
2.3 Section 47 of the Local Government Finance Act 1988 requires the Council to maintain a Discretionary Rate Relief Scheme to award up to 100% business rates relief in respect of premises occupied by certain organisations and/or for certain purposes. These organisations being the following:-
· A further award to charities up to 100% known as discretionary “top up” relief where the property is wholly or mainly used for charitable purposes (wholly and mainly is deemed to be greater than 50%)
· A further award of 20% on top of mandatory relief to registered Community Amateur Sports Clubs (CASCs)
· Other non-profit making organisations where the property is used for charitable purposes concerned with education, social welfare, science, literature or the fine arts; or it it is used wholly and mainly for recreation by a not-for-profit club or society.
2.4 In determining applications, the Council may
· Grant relief up to a maximum of 100% of the business rates due
· Grant relief for a sum less than 100% of the business rates due; or
· Refuse any application for additional relief.
2.5 Therefore, to make it clear the criteria used for applying rate relief, this policy has been developed and the criteria used are laid out in section 3 of the policy covering charities, registered community amateur sports clubs and other non-profit making Sports and Leisure Clubs and non-profit making organisations (other than charities, CASCs or other sports and leisure clubs) and Community Interest Companies (CIC)
2.6 To introduce a revised policy under the relevant legislation we have to give a year’s notice. Therefore, implementation will be on 1 April 2026. Although the the criteria for all applications made in respect of rate liabilities incurred from 1 April 2025 onwards can be assessed under the new policy.
2.7 All Councils have discretionary rate relief policies although the content may vary slightly depending on the authority, but they all must, as does the proposed policy in Appendix 1 comply with Government legislation.
2.8 Appendix 2 contains the historic policy which is light on detail especially in relation to providing full clarity on legislative reasons, details of who qualifies and lists categories of organisations without, for example, explaining the conditions that allow rate relief to be applied to community amateur sports clubs and hardship relief. It also does not cover rights of appeal. The new and updated policy ensure full coverage of these issues, so it is clear to those looking to apply as to whether they qualify or not.
3. Options analysis and proposal
3.1 Option 1 preferred To agree the revised discretionary policy to come into effect on 1 April 2026.
3.2 Option 2 Not to agree the revised policy limits our ability to undertake a fair analysis of business rates for the charitable sector as the old policy is outdated and not in line with other Councils.
4. Financial management comments
4.1 The financial implications will only be clear when a charity or non-profit organisation apply for discretionary rate relief.
4.2 Appendix 2a and 2b show the current cost of mandatory relief, on 2024 figures is £90,200. On the new policy it is possible 9 of those awards will end saving an award of £58,722.59.
4.3 However, we are still awaiting a business rate valuation from the Valuation Office for the new Eclipse Leisure Centre and depending on the rate relief agreed this could eliminate any savings.
4.4 It is therefore imperative and is the principal consideration that any relief awarded is in the best long-term interests of the taxpayers of the Spelthorne Council as the council taxpayers of the borough will fund the relief via their council tax contributions.
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5. Risk management comments
5.1 The risk of not having an up-to-date policy may preclude certain qualifying organisations from applying and it will not be clear what does not qualify.
6. Procurement comments
6.1 No procurement implications:
7. Legal comments
7.1 The policy has to take into account specific legislative requirements.
8. Other considerations
8.1 None.
9. Equality and Diversity
9.1 Any applications will take account of the equality and diversity implications to the charity or non-profit organisation.
10. Sustainability/Climate Change Implications
10.1 No direct impacts.
11. Timetable for implementation
11.1 The report would come into effect on 1 April 2026.
12. Contact
12.1 Sandy Muirhead Group Head Commissioning and Transformation
Please submit any material questions to the Committee Chair and Officer Contact by two days in advance of the meeting.
Background papers:, There are none.
Appendices:
List as Appendix 1 Spelthorne Borough Council Non-Domestic Rates Section 47 (LGFA) Policy
Appendix 2 Historic Discretionary rate relief policy