- Eligibility for awards of CARF
- Properties that will be excluded from awards of CARF
- CARF Award process
- Subsidy Control
- Appendix 1
COVID-19 has presented a significant and unprecedented challenge for businesses. Since the start of the pandemic the Government’s response to support businesses has been of a similarly unprecedented scale. On 25 March 2021, the Government announced a new COVID-19 Additional Relief Fund (CARF) of £1.5 billion. The fund will be available to support those businesses affected by the pandemic, but that are ineligible for existing support linked to business rates. The £1.5 billion will be allocated to local authorities based upon the estimated rateable value in each local authority rating list which falls within the scope of the fund.
This policy and guidance sets out the scope of CARF and the criteria that Bassetlaw District Council (BDC) will have regard to when determining awards from the fund. CARF will be paid to businesses as a relief against 2021/22 non-domestic rates liability, to reduce chargeable amounts payable, and in accordance with Government guidance. Central government will fully reimburse local authorities for discretionary relief awards that comply with the guidance up to the maximum level of the allocations.
This policy and guidance supports the COVID-19 Additional Relief Fund (CARF): Local Authority Guidance, issued by the Department for Levelling Up, Housing and Communities in December 2021.
Businesses eligible to be considered for an award of CARF must:
- Be a ratepayer in occupation of the hereditament as at 25 March 2021 and continue to be in occupation throughout the 2021/22 financial year.
- Be able to demonstrate they have been adversely impacted by coronavirus restrictions at their premises either through social distancing, government recommendations to work from home, or reduced demand (where the business predominantly supplies other businesses who were unable to trade) and have been unable to adequately adapt to that impact.
- Be able to demonstrate that the business will remain solvent for 12 months from the date of the application by providing the local authority with projected accounts (including any assumptions made as part of those projections).
Government guidance determines that certain properties are excluded from awards of CARF. Local authorities must
- not award relief to ratepayers who for the same period of the relief either are or would have been eligible for the Extended Retail Discount (covering Retail, Hospitality and Leisure), the Nursery Discount or the Airport and Ground Operations Support Scheme (AGOSS),
- not award relief to a hereditament for a period when it is unoccupied (other than hereditaments which have become closed temporarily due to the government’s advice on COVID-19, which should be treated as occupied for the purposes of this relief), and
- direct their support towards ratepayers who have been adversely affected by the pandemic and have been unable to adequately adapt to that impact.
- In line with the legal restrictions in section 47(8A) of the Local Government Finance Act 1988, billing authorities may not grant the discount to themselves, certain precepting authorities (e.g. a parish or county council) or a functional body.
In addition to the above Government restrictions, Bassetlaw District Council has determined that CARF will not be paid to properties or ratepayers in the following conditions
- Hereditaments that do not directly employ anyone (for example: parking spaces, advertising boards, communication masts, ATMs)
- NHS, including NHS and Foundation Trusts, practitioner who provide services under contract to the NHS
- Maintained schools, Academy Schools and Further / Higher Education Institutions,
- Businesses in administration, liquidation or subject to a strike off notice on companies house,
- Businesses who entered into a CVA or IVA during the course of 2020/21
- Where there is evidence to support this, businesses who cause a detrimental impact on the region, our residents, or our communities (including businesses who undertake tax avoidance schemes).
- Businesses who have not been significantly impacted by the coronavirus pandemic.
- Note – only hereditaments with a chargeable amount to pay for the year 2021/22 will be eligible to benefit from the scheme, therefore cases with full relief (such as full SBRR) will be excluded.
Bassetlaw District Council has been allocated £2,496,217 in CARF funding.
The Government has conducted an investigation as to how businesses have been affected by the pandemic, the results of which were included in the guidance issued for the scheme and have been copied below (appendix 1). It is proposed to allocate funding based on the average gross value added (GVA) splits determined in the research provided.
The calculations below show the totals relating to Bassetlaw District Council. Note that hereditaments have been classified within certain categories by the Valuation Office Agency and we have used this information in determining eligibility.
In modelling the potential awards, the following totals were determined (after removing hereditaments listed above as excluded from the scheme):
Number of properties
Amount charged 2021/22
Wholesale and Retail
Due to the predominance of hereditaments in SIC code G it is proposed to award the same percentage relief across all property classifications. In addition to this, SIC codes used in the rating list may not be 100% accurate and could lead to appeals against awards if different percentages are awarded to different classes of property.
The proposed relief rate has been calculated as follows:
- Available funding - £2,496,217
- Kept in reserve to cover possible appeals - £86,504
- Available for distribution - £2,409,713
- Proposed rate of relief - 14.5% of total charged
- Charge attracting relief - £16,618,713
- Relief awarded - £2,409,713
- Each individual case will be awarded relief based on its individual circumstances
- Liable parties will be written to, asking them to confirm their current position to ensure any award is within current subsidy control limits
- On receipt of their response, the value awarded will be adjusted on the billing system, if required.
- This will either reduce their bill for 2021/22 or place it in credit.
- If the bill is in credit, this will either be refunded or transferred forward to the new year bill depending on the wishes of the customer.
- Awards will be entered on the system during 2022
It is proposed to review the scheme as at 30 June 2022 to check on allocations to ensure all available relief is awarded.
In accordance with Government guidance, provision of CARF is likely to amount to a subsidy.
Any relief provided by Local Authorities under the CARF Scheme will need to comply with the UK’s domestic and international subsidy control obligations. Further details of the UK’s subsidy control are contained in the COVID-19 Additional Relief Fund (CARF): Local Authority Guidance, issued by the Department for Levelling Up, Housing and Communities in December 2021.
Extract from Government Guidance to support allocation of relief.
The allocation methodology uses the change in Gross Value Added (GVA) as a proxy for the economic impacts of COVID-19 on each business sector.
The calculation uses the change in GVA compared to Feb-20 for the period April 2020 to March 2021. This data is split by business sector according to the first level Standard Industrial Classification (SIC), apart from in two cases:
- Category H (Transport and Storage) has been split into two separate categories, given the large variance in Covid-19 impact between the transport and storage sectors. Details of this split are provided in Annex B.
- Category X is used where a property type doesn’t fit into a specific business sector (e.g. Offices) but the most common uses are likely fall into SIC categories J, K, L, M or N.
The allocation method uses the average of the twelve datapoints. Each month compared to Feb-20 is weighted equally. This data is for the United Kingdom.
SIC Code Definition Average GVA Reduction:
A - Agriculture, Forestry and Fishing -13%
B - Mining and Quarrying -8%
C - Manufacturing -9%
D - Energy -1%
E - Water and Waste Management 0%
F - Construction -14%
G - Wholesale and Retail -8%
I - Hospitality -55%
J - Information and Communication -6%
K - Financial Services -2%
L - Real Estate Activities -2%
M - Professional Services -7%
N - Administrative Services -21%
O - Public administration 1%
P - Education -20%
Q - Health -10%
R - Arts, Entertainment and Recreation -34%
S - Other Services -32%
X - Information, Communication, Financial Intermediation, Real Estate and Business Services -6%
Y - Transport -32%
Z - Storage and Distribution -1%
Last Updated on Thursday, October 6, 2022