Advisory Briefing – Business Rates (CARF)
Following the passing of the Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act (2021) the Government has released more detail as to how the £1.5bn discretionary fund will be allocated. The Act legislates to ensure that COVID-19 measures cannot be taken as a value significant change in external circumstances for business rates.
Guidance issued in December 2021 to Local Authorities (LA) sets out the following:-
- The fund will be available to support businesses affected by the pandemic which are ineligible for existing support linked to business rates
- The £1.5bn will be allocated by central Government to the LA based on an estimate of Rateable Value (RV) within their boundary falling within the scope of the fund. This RV will be ‘weighted’ according to their devised Gross Value Added (GVA) impact of the pandemic, per sector
- The relief is intended to reduce chargeable amounts in respect of rate year 2021/22
- LAs will be responsible for designing relief schemes to operate in their areas. These have yet to be published at the time of writing
- The Government has nevertheless stipulated LA’s must not award relief to ratepayers eligible for Retail, Hospitality and Leisure relief, or to a hereditament for a period when it is unoccupied (other than where forced to close and thus, treated as occupied)
- LAs must direct support to ‘ratepayers who have been adversely affected by the pandemic and have been unable to adequately adapt to that impact’
- Relief will be granted using discretionary relief powers under Section 47 of the Local Government Finance Act 1988
- Depending upon how LAs award CARF, relief may be subject to recalculation where a change in circumstances occurs, e.g. backdated change in assessment
- The CARF scheme is subject to the subsidies chapter of the UK-EU Trade and Cooperation Agreement, however with a specific exemption below a threshold
The full Local Authority Guidance can be found here:-
Should you have any immediate concerns and are not already advised on such matters, please contact a member of the Matthews & Goodman Rating team, who would be happy to help you.