Business rates relief on the grounds of hardship

Last Updated: 3 April 2024

Guidelines for determining applications for rate relief on the grounds of hardship

  1. These guidelines have been revised to assist in considering applications for rate relief on the grounds of hardship.
  2. The Executive must be satisfied, by examination of the accounts of the business, that the ratepayer is experiencing hardship, this is likely to be of a temporary situation rather than a business than cannot meet its liabilities on a long term basis. The Council will examine the accounts of the applicant, in particular, income trends over a three year period and consider future projections to establish that this is a business which is viable in the long term but is temporarily experiencing hardship.

    Third party data may be used to verify the credit rating of businesses.
    The Company must be able to show a significant reduction in turnover but can demonstrate that it has made attempts to reduce overheads before having recourse to an application for rate relief.
    In short paying the rate liability must cause actual hardship for the business

  3. It must be reasonable to grant relief after having regard to the interests of persons liable to pay the Council Tax set by the Council. The following are factors that may be considered under this heading:
    • The employment prospects in the whole or part of the District would be worsened by the loss of this business
    • The business could be the only one of its type in the town or rural community in which it is situated and provide goods or services that are considered essential to the health and wellbeing of residents in that community and the business should be wholly located within the South Lakeland District
    • Impact of competition on similar types of business across the locality and district

      The above criteria are not exhaustive and should not detract from the Executive’s discretion that should be based on “would a reasonable resident in the District feel it was fair and proper to award rate relief?”.

  4. The test of hardship need not be confined strictly to financial hardship: all relevant factors affecting the ability of a business to meet its liability for rates should be taken into account. Difficulties may arise as a result of actions taken independently by the Valuation Officer or similarly changes in legislation could result in a large backdated bill or an unplanned increase in liability. If the circumstances are such that the continuation of the business is threatened as confirmed by analysis of the accounts and the impact of meeting this liability, then the application should be considered in line with the criteria detailed in paragraph 3 above. Ideally in these circumstances the Council should make a long-term payment arrangement to clear the debt and hardship should only be awarded where the circumstances are considered exceptional.
  5. Relief would normally be limited to a maximum of 80% of the net rate liability but in exceptional circumstance relief can be awarded up to 100% of the Rate Liability,
  6. Relief is likely to be awarded in circumstances that can be directly attributable to a set of physical or economic circumstances affecting the business. Relief will normally be awarded for a specific period.
  7. Applicants are to be advised of the decision within 21 days together with their rights of appeal should they disagree with the decision.
  8. Applicants must engage with the Council’s Revenues team during this process and should be aware that it is likely that the Council will require some contribution to any outstanding liabilities whilst the application is determined.