Section 49 of the Local Government Finance Act 1988 gives the council a discretionary power to reduce or remit the payment of rates by granting hardship relief. A quarter of the cost of any hardship relief granted falls directly on local council tax payers so the council must ensure that granting hardship relief benefits the wider community as well as the ratepayer concerned.

Granting hardship relief

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.

The granting of hardship relief is intended to be for a time limited period, after which there are reasonable expectations that the business will return to economic viability.

Qualifying criteria

The applicant must be liable to pay National Non-Domestic Rates to Warwick District 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 council tax payers. 

The test of 'hardship' need not be confined strictly to financial hardship and applicants should disclose all relevant factors affecting the ability of the 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?

Businesses which are situated in a rural settlement may qualify for rural rate relief. Such businesses must apply for rural rate relief before an application for hardship relief can be considered.

Small businesses occupying only one non-domestic property in England may qualify for small business rate relief. Such businesses must apply for small business rate relief before an application for hardship relief can be considered.

Whilst the council can consider an application for hardship relief from any ratepayer who satisfies the qualifying criteria, applications are particularly welcome from ratepayers from the following categories of properties:

  • Village shops
  • Starter unit
  • Small specialists 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. Hardship relief should not be regarded as automatic under any circumstances.

Which ratepayers are unlikely to qualify?

Whilst the council will accept all applications for hardship relief, there are some ratepayers who will not qualify:

  • If the applicant has other businesses
  • If the property is unoccupied
  • If the ratepayer belongs to a group of companies
  • If other reliefs are available but have not been applied for

Application form and requirements

Business rates hardship relief application.

The following information will be required in support of applications for hardship relief:

  • Past two years audited accounts or, in the case of a new business, an estimate of annual income and expenditure.
  • Cash flow forecast for a minimum of the next twelve months.
  • The list of home postcodes for all employees
  • Any other information that may be appropriate in support of your application. (e.g. Order books, VAT returns)

Determining applications for hardship relief 

Each application for hardship relief is considered on its merits in accordance with government guidelines.