Hardship Relief

What is the Hardship Relief Scheme?

Section 49 of the Local Government Finance Act 1988 gives the Council a discretionary power to reduce or remit the payment of non-domestic rates by granting Hardship Relief. The Government only reimburses the Council with 75% of any Hardship Relief granted, so 25% of the cost falls directly on local Council Tax payers. Thus, the Council must ensure that the granting of Hardship Relief benefits the wider community as well as the ratepayer concerned.

How is Hardship Relief granted?

Any Hardship Relief will normally be granted as a percentage of the rates payable for a specific period, usually the rating year in which the application is made. In some cases, interim decisions may be made subject to review in the light of the actual financial accounts for the period concerned.

An applicant who is granted Hardship Relief is entitled to re-apply for Hardship Relief in subsequent years and in the event of such re-application the Council may require the ratepayer to provide evidence from an accountant or other professional adviser regarding the long-term viability of the business.

What are the general qualifying criteria for Hardship Relief?

The applicant must be liable to pay National Non-Domestic Rates to Bedford Borough Council.

The Council must be satisfied that:-

the ratepayer would sustain hardship if the Council failed to grant Hardship Relief, and
it is reasonable to grant Hardship relief having regard to the interest of the persons subject to the Council Tax.

The test of "hardship" need not be confined strictly to financial hardship and applicants should disclose all relevant factors affecting the ability of their business to meet its rate liability.

The "interest" of local Council Tax payers may go wider than direct financial interests; for example, where employment prospects in an area would be worsened by a ratepayer going out of business, or the amenities of an area might be reduced by, for instance, the loss of a neighbourhood shop.

Which ratepayers are most likely to qualify for Hardship Relief?

Whilst the Council can consider an application for Hardship Relief from any ratepayer who satisfies the qualifying criteria, applications are particularly welcome from ratepayers in respect of the following categories of properties:-

Village Shops
Starter Units
Small specialist shops unique to an area
New ventures filling gaps in the market
Areas facing a decline in trade
Neighbourhood shopping parades.

The above list is for guidance only and is not conclusive.

It is unlikely that Hardship Relief would be granted in respect of an empty property or where there is little expectation of economic survival.

Businesses that are situated in a Rural Settlement may qualify for Rural Rate relief (for which separate details are available). Such businesses may be required to apply for Rural Rate Relief before an application for Hardship Relief can be considered.

What are the application requirements?

The following information will be required in support of applications for Hardship Relief:-

Completed Application Form.
Past two years audited accounts or, in the case of a new business, an estimate of annual income and expenditure.
A comprehensive Business Plan incorporating a brief history of the business.
Cash flow forecast for a minimum of the next twelve months.
Any other information that may be required in individual cases.

How are applications for Hardship Relief determined?

Each application for Hardship Relief is considered on its merits in accordance with Government guidelines.

The Finance Portfolio Holder has been given delegated authority to consider applications after taking advice from the Director of Finance and the Council's Economic Development Unit.

Click here to download a Hardship Relief application form