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Retail, hospitality and leisure business rates relief scheme

Retail, hospitality and leisure business rates relief scheme 2024-2025.

Contents

  1. Introduction
  2. Eligibility
  3. Excluded categories
  4. Value of the relief
  5. Recalculation of reliefs
  6. The cash caps
  7. Appeals

1. Introduction

1.1

Leicester City Council (‘the Council’) is directed by government to provide a Retail, Hospitality and Leisure Business Rates Relief Scheme (‘the Scheme’).

1.2

On 22 November 2023, the government confirmed that the Scheme would continue to apply in 2024/25 to provide eligible, occupied, retail, hospitality and leisure properties with a 75% relief, up to a cash cap limit of £110,000 per business.

1.3

The Scheme will be available from 1 April 2024 and will be applicable to the financial year 2024/25 only.

2. Eligibility

2.1

In order to be eligible for the Scheme for the chargeable day, the property in question must be occupied and wholly or mainly being used:
  1. as a shop, restaurant, café, drinking establishment, cinema or live music venue;
  2. for assembly and leisure; or
  3. as a hotel, guest & boarding premises, or self-catering accommodation

2.2

Shops, restaurants, cafés, drinking establishments, cinemas and live music venues are considered to mean:

  1. Properties that are being used for the sale of goods to visiting members of the public:
    • Shops (such as florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licenses, chemists, newsagents, hardware stores, supermarkets, etc).
    • Charity shops
    • Opticians
    • Post offices
    • Furnishing shops/display rooms (such as carpet shops, double glazing, garage doors)
    • Car/caravan show rooms
    • Second-hand car lots
    • Markets
    • Petrol stations
    • Garden centres
    • Art galleries (where art is for sale/hire).
  2. Properties that are being used for the provision of the following services to visiting members of the public:
    • Hair and beauty services (such as hairdressers, nail bars, beauty salons, tanning shops, etc).
    • Shoe repairs/key cutting
    • Travel agents
    • Ticket offices e.g., for theatre
    • Dry cleaners
    • Launderettes
    • PC/TV/domestic appliance repair
    • Funeral directors
    • Photo processing
    • Tool hire
    • Car hire
  3. Properties that are being used for the sale of food and/or drink to visiting members of the public:
    • Restaurants
    • Takeaways
    • Sandwich shops
    • Coffee shops
    • Pubs
    • Bars
  4. Properties which are being used as cinemas.
  5. Properties that are being used as live music venues:
    • Live music venues are properties wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Properties cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987, as amended.
    • Properties can be a live music venue even if used for other activities, but only if those other activities are merely ancillary or incidental to the performance of live music (e.g. the sale/supply of alcohol to audience members) or do not affect the fact that the primary activity for the premises is the performance of live music (e.g. because those other activities are insufficiently regular or frequent, such as a polling station or a fortnightly community event).
    • There may be circumstances in which it is difficult to tell whether an activity is a performance of live music, or instead, the playing of recorded music. Guidance on this may be found in Chapter 16 of the statutory guidance issued in April 2018 under section 182 of the Licensing Act 2003.

2.3

We consider assembly and leisure to mean properties that are being used for:
  1. The provision of sport, leisure and facilities to visiting members of the public (including for the viewing of such activities):
    • Sports grounds and clubs
    • Museums and art galleries
    • Nightclubs
    • Sport and leisure facilities
    • Stately homes and historic houses
    • Theatres
    • Tourist attractions
    • Gyms
    • Wellness centres, spas, massage parlours
    • Casinos, gambling clubs and bingo halls
  2. The assembly of visiting members of the public:
    • Public halls;
    • Clubhouses, clubs and institutions.

2.4

We consider hotels, guests & boarding premises and self-catering accommodation to mean properties where:
  1. The non-domestic part is being used for the provision of living accommodation as a business:
    • Hotel, guest and boarding houses
    • Holiday homes
    • Caravan parks and sites

2.5

To qualify for the relief, the property should be wholly or mainly being used for the above qualifying purposes on any chargeable day. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation.

2.6

The lists set out above are not intended to be exhaustive, as it would be impossible to list the many and varied uses that exist within the qualifying purposes. Properties may also receive relief if they are considered by the Council to be broadly similar in nature to those outlined in 2.2 to 2.4.

2.7

The Council will determine in each individual case when, with regard to all relevant legislation and guidance, to grant this relief under section 47 of the Local Government Finance Act 1988 (‘Section 47’).

2.8

The ratepayer has the option under this policy to refuse the discount for each eligible hereditament anytime up to 30 April 2025 and cannot withdraw this refusal for either all or part of the financial year. For the purposes of section 47 of the above 1988 Act, properties where the ratepayer has refused the relief are outside of this policy and outside of the scope of the decision of which properties qualify for the discount and are therefore ineligible for the relief.

3. Excluded categories

3.1

Any property wholly or mainly used for the following will not be considered to be eligible for the purposes of this relief scheme:
  1. Properties that are being used for the provision of the following services to visiting members of the public:
    • Financial services (e.g., banks, building societies, cash points, bureaux de change, short-term loan providers, betting shops)
    • Medical services (e.g., vets, dentists, doctors, osteopaths, chiropractors)
    • Professional services (e.g., solicitors, accountants, insurance agents/financial advisors, employment agencies, estate agents, letting agents)
    • Post office sorting offices
  2. Properties that are not reasonably accessible to visiting members of the public.

3.2

In line with the legal restrictions in section 47(8A) of the Local Government Finance Act 1988, the Council cannot grant the relief to itself or a precepting authority.

3.3

Properties which are wholly or mainly being used for any of the above uses or uses which are considered to be broadly similar to those outlined at 3.1, will not be considered to be eligible for this relief.

4. Value of the relief

4.1

Subject to the cash caps outlined in section 5, the total amount of government-funded relief available for each property for 2024/25, under this scheme for chargeable days from 1 April 2024 to 31 March 2025, is 75% of the chargeable amount after mandatory reliefs and other discretionary reliefs funded by section 31 grants have been applied, but before those where the Council has used its wider discretionary relief powers introduced by the Localism Act 2011 which are not funded by section 31 grants.

4.2

Additionally, the former categories of discretionary relief available prior to the Localism Act 2011 (i.e., charitable/CASC. and not for profit) should be applied first in the sequence of discretionary reliefs and, therefore, before the relief under this scheme.

4.3

The Council may use its discretionary powers to offer further discounts outside this scheme or additional relief to properties within the scheme. However, where we apply a locally funded relief under section 47, this should be applied after the scheme.

4.4

Subject to the cash caps outlined in section 5, the eligibility for the relief and the relief itself will be assessed and calculated on a daily basis. The following formula will be used to determine the amount of relief to be granted for a chargeable day for a particular property in the financial year 2024/25:

  • Amount of relief to be granted = V x 0.75, where:

V is the daily charge for the property for the chargeable day after the application of any mandatory relief and any other certain discretionary reliefs outlined in 4.1 above.

4.5

Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties subject to the cash caps explained in section 5.

4.6

Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties subject to the cash caps explained in section 5.

4.7

A new hereditament created as a result of a split or merger during the financial year, or where there is a change of use, will be considered afresh for the relief on that day. The discount will be applied on a day-to-day basis using the above formula.

5. Recalculations of relief

5.1

No ratepayer can in any circumstances exceed the £110,000 cash cap across all of their hereditaments in England.

5.2

Where a ratepayer has a qualifying connection with another ratepayer in England then those ratepayers should be considered as one ratepayer for the purposes of the cash caps. A ratepayer shall be treated as having a qualifying connection with another:

  1. where both ratepayers are companies, and

    1. one is a subsidiary of the other, or
    2. both are subsidiaries of the same company; or
  2. where only one ratepayer is a company, the other ratepayer (the “second ratepayer”) has such an interest in that company as would, if the second ratepayer were a company, result in its being the holding company of the other.

6. The Cash Caps

6.1

No ratepayer can in any circumstances exceed the £110,000 cash cap across all of their properties in England.

6.2

Where a ratepayer has a qualifying connection with another ratepayer in England then those ratepayers should be considered as one ratepayer for the purposes of the cash caps. A ratepayer shall be treated as having a qualifying connection with another:

  1. where both ratepayers are companies, and
    1. one is a subsidiary of the other, or
    2. both are subsidiaries of the same company; or
  2. where only one ratepayer is a company, the other ratepayer (the “second ratepayer”) has such an interest in that company as would, if the second ratepayer were a company, result in its being the holding company of the other.

6.3

To the extent that the Council is seeking to provide relief that falls below the Minimal Financial Assistance (MFA) thresholds, the Subsidy Control Act allows an economic actor (e.g., a holding company and its subsidiaries) to receive up to £315,000 in a three-year period (consisting of the 2024/25 year and the two previous financial years). MFA subsidies cumulate with each other and with other subsidies that fall within the category of ‘Minimal or SPEI financial assistance.’ BEIS COVID-19 business grants and any other subsidies claimed under the Small Amounts of Financial Assistance limit of the Trade and Cooperation Agreement should be counted towards the £315,000 allowance.

6.4

In those cases where it is clear to the Council that the ratepayer is likely to breach the cash cap or the MFA limit then the Council will automatically withhold the relief. Otherwise, the Council will include the relief in bills and ask the ratepayers, on a self-assessment basis, to inform the Council if they are in breach of the cash caps or MFA limit.

6.5

Any relief provided by the Council under the scheme will need to comply with the UK’s domestic and international subsidy control obligations.[1] MFA subsidies above £100,000 are subject to transparency requirements. This is not cumulated per beneficiary but applies per subsidy award. This means that for every individual subsidy provided of more than £100,000, the Council needs to include details of the subsidy on the subsidy control database.

7. Appeals

7.1

An appeals process will be open to all business rate payers in the City who feel that they meet the eligibility criteria of this policy and have not received a deduction from their business rates via this Scheme.

7.2

The following occasions are the sole basis of any grounds for appeal:

  1. The premises is of a type specifically stated as being eligible for relief, and the Council has by error omitted to grant relief; or
  2. The premises is not of a type specifically stated as being eligible for relief, but by analogy the use is comparable to one which is listed as eligible.

7.3

All appeals must be made in writing by contacting the Council, using the details on your bill or the business rates website.

7.4

Appeals will be considered in line with this Policy. Decisions are taken at the sole discretion of the Director of Finance in consultation with the Revenues & Benefits Manager.

7.5

All appeals will be reviewed within four weeks of submission of all necessary information. All decisions taken on appeals are final and the outcome will be recorded and delivered to the business in writing.

7.6

If an appeal is successful, rate relief may be backdated for the full eligible period from 1 April 2023 or the occupation date if this is later. An appeal must be made by 31 March 2025.

[1] https://www.gov.uk/government/collections/subsidy-control-regime 

7.7

If an appeal is unsuccessful the only further recourse available to applicants is a judicial review. A judicial review is the means by which the decisions of billing authorities under discretionary rating powers may be questioned.

8. Policy Review

8.1

The policy will be reviewed when necessary and whenever the Council receives best practice guidelines from the Department for Levelling Up, Housing and Communities, and any relevant changes to legislation.

Appendix A: Calculation examples for 2024/2025

The Retail, Hospitality and Leisure scheme is always calculated after mandatory relief and other discretionary reliefs funded by section 31 grant. Ignoring cash caps.

Example 1: An occupied shop with a rateable value of £40,000

Gross rates (before any reliefs) = £40,000 x 0.499:= £19,960

RHL Relief Discount (75%), £19,960 x 0.75: = =-£14,970

Rates due (after RHL Relief Discount): = £4,990

Example 2: An occupied shop with a rateable value of £100,000

Gross rates (before any reliefs) = £100,000 x 0.546: = £54,600 

RHL Relief Discount (75%), £54,600 x 0.75 = -£40,950

Rates due (after RHL Relief Discount): = £13,650

Example 3: An occupied charity shop with a rateable value of £40,000

Gross rates (before any reliefs) = £40,000 x 0.499 = £19,960 

Net rates after charity relief (80%): = £3,991 

RHL Relief Discount (75%), £3,992 x 0.75 =-£2,994

Rates due (after charity relief and RHL Relief Discount): = £998

Example 4: An occupied shop with a rateable value of £13,500 eligible for Small Business Rate Relief (SBRR)

Gross rates (before any reliefs) = £13,500 x 0.499 = £6,737 

Net rates after SBRR (50%): = £3,368 

RHL Relief Discount (75%), £3,368 x 0.75 = -£2,526

Rates due (after SBRR and RHL Relief Discount): = £842

Example 5: An occupied shop with a rateable value of £10,000 eligible for Small Business Rate Relief (SBRR)

Gross rates (before any reliefs) = £10,000 x 0.499 = £4,990

Net rates after SBRR (100%): = £nil 

Rates bill is nil and, therefore, no RHL Relief Discount applies

Example 6: An occupied shop with a rateable value of £40,000 but only occupied until 30 September 2024

Gross rates while occupied (before any reliefs) = £40,000 x 0.499 x 183/365 = £10,007 

RHL Relief Discount (75% from 01/04/24 to 30/09/24), £10,007 x 0.75 =-£7,505

Net rates while occupied: = £2,502

Gross rates while unoccupied (before any reliefs) = £40,000 x 0.499 x 183/365 = £9,953

Unoccupied property relief (100% from 01/10/24 to 31/12/24), £9,953 x 92/182: = -£5,031

Net rates while unoccupied: = -£4,922

Rates due for the year (after empty property relief and RHL Relief Discount): = £7,524