On 15 December 2021, the Government declared that it would provide additional relief to those businesses who did not qualify for any of the earlier reliefs announced as part of the previous responses to COVID-19. As a consequence, the Government subsequently announced a new COID-19 Additional Relief Fund (CARF) on 25 March 2022.
This fund was made available to support those sectors which had not previously received any COVID-19 related support in respect of their non-domestic rate liability. CARF is a discretionary award with each authority required to use their discretionary powers. The scheme will apply to the 2021/22 financial year only and all awards must be made by 30 September 2022.
The Government considers that CARF replaces the potential right to request a reduction in rateable value from the Valuation Office Agency, due to COVID-19 related issues. This is considered to be appropriate in cases when COVID-19 has caused a material change in circumstances, which may make the rateable value of the property inaccurate.
The funds available to Knowsley Council are limited and will only be available to businesses that have been adversely affected by the COVID-19 pandemic and which have been unable to adequately adapt to the associated impact. Applicants must be able to provide evidence of how the business has been adversely impacted by COVID-19. Examples of documentation that may be requested by the council would include:
- Accounts showing the business turnover before the pandemic and in the 2021/22 financial year
- Bank statements showing the business activity before the pandemic and in 2021/22
Subject to the eligibility of ratepayers, Knowsley Council will be able to grant CARF towards the 2021/22 non-domestic rate bill, providing that the ratepayer is able to evidence that the business has been adversely impacted by COVID. Examples could include lost orders and/or contracts, lost revenue, significant additional costs and/or cashflow problems. Knowsley Council will not award relief to:
- A property for a period which was unoccupied (other than properties which had become unoccupied temporarily, due to the Government’s restrictions in respect of COVID-19)
- A ratepayer who, for 2021/22 financial year, was in receipt of or would have been eligible for Extended Retail Discount (for the retail, leisure and hospitality sectors) or a Nursery Discount.
- A Billing Authority or to a Precepting Authority, in accordance with the legal restrictions contained in section 47(8A) of the LGFA 1988
- Any ratepayer that has already exceeded the relevant subsidy control limits
In addition to the guidance provide by the Government, it is also considered that the council is unlikely to consider the following businesses as eligible for an award under CARF:
- Financial services (including banks, building societies, cash points, bureaux de change, short-term loan providers)
- Medical services (including vets, dentists, doctors, osteopaths, chiropractors)
- Professional services (including solicitors, accountants, insurance agents, financial advisers)
- Business properties which do not directly employee anyone e.g. advertising rights, car parking spaces
- Public sector organisations and ratepayers funded by Government bodies or grants
- Those businesses associated with gambling (e.g. betting shops)
- Any business premises which are used for personal use or storage only and/or which is not considered to be trading.
- A business whose operations are predominantly undertaken online
- Any business which cannot demonstrate that it has been significantly impacted and adversely affected by the pandemic (Knowsley Council reserves the right to request proof to demonstrate this position and failure to provide the information will invalidate the application).
Ratepayers subject to any personal or corporate insolvency procedures will also be excluded from receiving CARF. These procedures include but are not limited to:
- Company Voluntary Arrangement (CVA)
- In Administration
- In receipt of a notice of intention to ‘Strike Off’ from Companies House
- Individual Voluntary Arrangement (IVA)
- Debt Relief Order (DRO)
Whilst the council will direct their support towards applicants who have been adversely affected by the pandemic, it is also intended that the relief scheme adopted will provide the maximum support to applicants whose main trading address is in Knowsley. This should help to provide valuable assistance to businesses in the borough, to assist in protecting jobs and to enable businesses to continue to trade in the future.
In order to qualify for an award, the applicant must be:
- Registered as the ratepayer of the premises for which the application is made and must also occupy the property during the 2021/22 financial year.
- The premises must have been occupied from 1 April 2021 onwards and should not have been unoccupied during the 2021/22 financial year, unless they have been required to close under COVID-19 restrictions.
- The business must not be in one of the sectors identified as ineligible from the Government guidance or under any local conditions that would prevent the ratepayer from being considered for an award.
Knowsley MBC reserves the right to determine any cases where eligibility is unclear or is disputed. It should be noted that the final decision on any discretionary award under the CARF scheme will rest with the Authority.
As there is limited funding available, it is intended that this policy will predominantly support small and medium sized businesses, who have been adversely affected by the pandemic during the 2021/22 financial year.
Amount of the Award
Relief awarded to eligible ratepayers under the CARF scheme will be applied to non-domestic rate accounts for the 2021/22 financial year only.
As the award will be specifically targeted at small and medium sized businesses and subject to the overall funding available to the council, the initial value of the awards will be:
- A maximum award of 100% of net liability after the application of all other reliefs, where the rateable value is below £51,000RV
- A maximum award of 75% of the net value outstanding after the applications of other reliefs, where the rateable value is from £51,000RV to £100,000RV
- A maximum award of 50% of the net value outstanding after the application of other reliefs, up to a maximum of £50,000, where the rateable value is above £100,000RV
The maximum amount of relief may subsequently be amended, depending on the number of eligible ratepayers making applications and the remaining funds available.
The Government has confirmed that discretionary relief awarded to ratepayers 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 guidance has been provided by the Government.
Ratepayers will need to confirm on the application that they have not exceeded the relevant subsidy limits and have been adversely affected by the COVID-19 pandemic.
If any award of CARF puts the 2021/22 non-domestic rate account into credit, Knowsley Council reserves the right to transfer that credit to offset any other outstanding non-domestic rate liability, including the 2022/23 rate bill. Knowsley Council may also be able to provide a refund of any credit.
If circumstances change and the ratepayer becomes ineligible for CARF or, if subsequent changes reduce the value of the award, the non-domestic rate bill will be adjusted to reflect the loss or reduction of the relief. Any relief awarded under this scheme will be subject to the continuing eligibility to CARF for the 2021/22 financial year.
Applications for COVID-19 Additional Relief
To apply for CARF, you will need to provide information including:
- The name of the ratepayer (as it appears on the non-domestic rate bill)
- 10-Digit non-domestic rate account number
- The full address of the property for which relief is sought (including postcode)
- Number of employees (at the property in Knowsley)
- Nature of the business (conducted in Knowsley)
- Estimated percentage adverse effect of the pandemic on income for 2021/22 (Accounts to support the adverse effect will need to be provided, if requested by Knowsley Council).
Should you require any further clarification regarding CARF, please call the Non-Domestic Rate Team on: 0151 443 4126/4169.
The window for applications under the CARF scheme will close at 11pm on 31 July 2022. Applications received after this date will not be accepted.
If you have read the conditions detailed above and believe that the ratepayer is eligible to apply for COVID-19 Additional Relief, please apply below: