Local government finance circular 4/2022 - non-domestic rates relief: guidance

Local Reliefs And Reductions

187. The key provision is section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962 inserted by section 140 of the Community Empowerment (Scotland) Act 2015.

188. As well as the statutory reliefs covered in this document, local authorities can now apply further rates reliefs and reductions.

189. This power to set rates, in accordance with a scheme made by the local authority, came into force on 31 October 2015, and can be applied back to 1 April 2015.

190. A scheme could be based on category of property, area, activity, or by reference to such other matters as a scheme specifies; e.g. a scheme could provide for a general reduction across all rateable properties, or for a single property. Local authorities will wish any schemes to have clear, practicable and robust criteria for practitioners and ratepayers.

191. Any such reduction is fully funded by the local authority, and in exercising the power it must have regard to its income & expenditure and the interests of persons who are liable to pay council tax. A local authority may determine when a reduction is to cease, but it will always cease when there is a change in occupation of the property (although it could then be applied anew if that accords with the scheme).

192. The level of NDR income reported in councils' returns to the Scottish Government would not be affected by any such schemes (i.e. the council would fully fund the cost of rates remission or reduction under any scheme). However, councils' NDR income returns to the Scottish Government could potentially be used as a means of collecting information on the level of relief awarded under this power.

193. As with statutory reliefs, councils must consider and comply with the TCA.

194. There is no statutory requirement for councils to require an application process for any relief (e.g. councils could reduce or remit rates in the initial rates bill). However, using application forms to request information about other public support would assist councils in determining the subsidy position.

195. A council scheme could potentially not be TCA MFA providing it were compliant with the TCA subsidy principles. The Scottish Government may offer councils guidance on any proposals, although councils should seek their own legal and subsidy advice.