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Nursery discount rate relief policy

Most nurseries are entitled to 100% rate relief and will pay nothing in 2020-2021. This relief will be available to those properties occupied by providers on Ofsted’s Early Years Register and which are mainly used to provide the Early Years Foundation Stage.

Contents

  1. Introduction
  2. Legislative framework
  3. Scheme statement
  4. Duration of the discount
  5. Eligibility criteria
  6. Amount of relief available
  7. Splits, mergers and changes to existing properties
  8. Appeals
  9. Applying for the nursery discount scheme
  10. State aid
  11. Policy review

1. Introduction

As an extraordinary response to the coronavirus, the Government announced a business rates nursery discount on 18 March 2020.

2. Legislative framework

The award of any discount is at the discretion of Leicester City Council and is made under Section 47 of the Local Government Finance Act 1988, as amended.

3. Scheme statement

It is the intention of Leicester City Council to exercise its powers under the above Act to award business rates discount to all ‘qualifying’ ratepayers. This policy follows Government guidance.

4. Duration of the discount

The relief is only applicable for the financial year 2020/21 (1 April 2020 to 31 March 2021). This discount is fully funded by the Government.

5. Eligibility criteria

Properties that will benefit from this discount are those occupied by providers on the Ofsted’s Early Years Register and wholly or mainly used for the provision of the Early Years Foundation Stage.

To qualify for the discount the relevant property should be wholly or mainly used for the above qualifying purpose. This is a test on use rather than occupation and those properties which are occupied but not wholly or mainly used for the qualifying purpose will not be eligible for the discount. Those nurseries which have closed temporarily due to the government’s advice on COVID19 will be treated as occupied for the purposes of this discount.

The Council will use all available sources of information to identify those nurseries that are eligible for the discount, including those from our education section. Eligibility for the discount and the discount itself will be assessed and calculated on a
daily basis.

In line with the provisions within section 47(8A) of the Local Government Finance Act, the Council will not be able to grant itself a discount or to a precepting authority

6. Amount of relief available

The total amount of this Government funded discount for 2020/21 is 100% of the individual bill, after mandatory and other discretionary reliefs have been applied, excluding those where we have used our wider discretionary relief powers introduced by the Localism Act, which are not funded by the Government.

The eligibility for the discount and the discount 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 2020/21:

Amount of relief to be granted = V, where V is the daily charge for the property for the chargeable day after the application of any mandatory relief and any other discretionary reliefs, excluding those where local authorities have used their discretionary relief powers introduced by the Localism Act which are not funded by the Government.

This will be calculated ignoring any prior year adjustments in liabilities which fall to be liable on the day.

Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties.

7. Splits, mergers and changes to existing properties

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

8. Appeals

An appeal process will be open to all business rate payers who feel that they meet the eligibility criteria of this policy but have not received the discount.

An appeal may only be made on the following grounds:

  1. The premises is of a type specifically stated as being eligible for the discount, and the council has by error omitted to grant relief.

All appeals must be made in writing by contacting the business rates team through the contact details on the Council’s website.

Appeals will be judged in line with the policy and decided at the sole discretion of the Director of Finance in consultation with the Revenues & Benefits Manager. All appeals will be reviewed within 2 weeks of submission of all required information. All decisions taken on appeals are final and the outcome will be recorded and delivered to the business in writing. If an appeal is successful, the rate discount will be backdated for the full eligible period within that financial year. Appeals can only be made for the current financial year (2020/21).

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.

9. Applying for the nursery discount scheme

The council will automatically apply the relief to those rating assessments that meet the criteria.

For any further enquiries the ratepayer should contact the council at: business.rates@leicester.gov.uk

10. State aid

Whilst the UK left the EU on 31 January 2020, the Withdrawal Agreement negotiated by the Government and the EU provides that during a transition period State aid rules will continue to apply as now and will be subject to control by the EU Commission as at present.

The Government has notified the EU of its intention to bring forward an immediate change to the UK’s tax treatment of non-domestic property, in response to the ongoing Covid-19 emergency, and to seek clearance under Article 107(3)(b) of the Treaty on the Functioning of the European Union. Subject to this approval, the Nursery Discount scheme will become a notified State aid. Authorities should prepare to award the discount ignoring de minimis limits and MHCLG will inform them of the outcome of the notification as soon as it is known.

11. Policy review

The policy is to be applied in line with Government guidance and will be reviewed following any other changes announced by the Ministry of Housing, Communities & Local Government.