Council Tax exemptions and discounts
- Meeting of Finance Panel (Panel of the Scrutiny Committee), Thursday 7 April 2016 5.30 pm (Item 3.)
- View the background to item 3.
The Finance Panel requested a report on Council Tax and Business Rates exemptions and discounts.
Why is it on the agenda?
For the Panel to consider the types and numbers of exemptions and discounts granted and financial implications of these. The Panel may also wish to consider how abuses are detected and prevented.
Who has been invited to comment?
Nigel Kennedy, Head of Financial Services
Tanya Bandekar, Revenue and Benefits Service Manager
The Revenues and Benefits Service Manager introduced the report. She explained the different types of Business Rate reliefs and said that government had frequently made changes to the types and levels of reliefs offered. Planned changes being consulted on included the doubling of the Business Rates threshold from the rateable value of £6,000 to £12,000, with tapered relief up to £15,000. Government had announced that grant funding would be provided to compensate local authorities for lost income. Revaluations were also expected to take place more frequently in future.
The Localism Act enabled the Council to grant discretionary rates relief ranging from 0-100% to any business, however, this resulted in a direct cost to the Authority. The Council had a policy in place and considered applications on a case by case basis, although relatively few requests were received. The Panel noted that some community based organisations that had been declined a discretionary relief may benefit from the raising of the Business Rates threshold.
The Panel noted that the financial impact of mandatory Business Rates reliefs appeared to be very high at £20.5m, compared to a total take of £86.8m (of which some £6.2m would be retained by the Council). The Panel questioned how certain Council Officers were that the mandatory reliefs granted were legitimate. The Panel heard that these reliefs would apply to organisations such as colleges and schools, and that businesses had a duty to inform the Council of any changes to their status.
The Panel also asked about the enforcement of Council Tax discounts and exemptions, noting that there appeared to be a high number of discounts and exemptions granted. The Panel heard that the Financial Services Team had timetables for reviewing Business Rates and Council Tax exemptions and discounts over the coming year based on risk analyses (Appendices G & H). The Fraud Investigations Team would also deploy resources to assist with these reviews. This team had recently doubled in size and was able to access data from different sources and flag anomalies. This would inform the areas that warranted further investigation and the Single Person’s Discount was likely to be one of these.
The Panel welcomed the work that was taking place to reduce fraud, noting that £508,480 had been recovered and £21,053 saved since February 2015. The Panel questioned whether more frequent reviews might raise additional income and whether there was a case for increasing resources to enable this. The Panel heard that the new rolling reviews would be more manageable and that the only resourcing challenge was managing a peak in workload each September due to some 7,000 student processes.
The Panel noted that some major Business Rates appeals were taking place and the possibility of successful backdated appeals represented a major risk to the Council.
The Panel requested the following information:
· The financial impacts of Business Rates reliefs provided due to the redevelopment of Frideswide Square and the closure of St. Clements car park.
· The numbers of changes that were identified in-year that would affect the mandatory reliefs provided to businesses.
The Panel AGREED to make the following recommendations to the City Executive Board:
1. That a cost benefit analysis takes place at an appropriate time to determine what level of Fraud Investigation resources would maximise Council revenues.
2. That consideration is given to whether resources can be increased in the Revenues Team a temporary basis in order to manage peaks in workload such as during the annual student turnover.
- Discounts and exemptins April 2016 v1.0, item 3. PDF 146 KB View as HTML (3./1) 213 KB
- Appendix A - Funding of Business Rate Reliefs, item 3. PDF 41 KB View as HTML (3./2) 24 KB
- Appendix B - Numbers and Values of NNDR Reliefs, item 3. PDF 49 KB View as HTML (3./3) 40 KB
- Appendix C - Council Tax exemptions, item 3. PDF 43 KB View as HTML (3./4) 50 KB
- Appendix D - Council Tax discounts, item 3. PDF 27 KB View as HTML (3./5) 36 KB
- Appendix E - Council Tax discretionary discounts, item 3. PDF 25 KB View as HTML (3./6) 32 KB
- Appendix F - Numbers and values of Council Tax exemptions and discounts, item 3. PDF 69 KB View as HTML (3./7) 92 KB
- Appendix G - Review timetable for NNDR, item 3. PDF 50 KB View as HTML (3./8) 34 KB
- Appendix H - Review timetable for Council Tax, item 3. PDF 63 KB View as HTML (3./9) 82 KB
- Appendix I - Map of empty properties 6 months+, item 3. PDF 586 KB View as HTML (3./10) 844 KB
- Appendix J - Map of all empty properties, item 3. PDF 568 KB View as HTML (3./11) 818 KB