The Non-Domestic Rating (Levy and Safety Net) Regulations 2013

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations are part of the system of local retention of non-domestic rates, established by Schedule 7B to the Local Government Finance Act 1988 (“the 1988 Act”). They make provision for calculating whether the Secretary of State is required to make a safety net payment to an authority and the amount of such a payments. They also provide for calculating whether an authority is required to make a levy payment to the Secretary of State for a year and if so the amount of that payment. For the purposes of these Regulations a pool of authorities is treated as a single authority.

Regulation 4 and Schedule 1 provide for the calculations of each authority’s “retained rates income”. This is broadly the income that the authority has received from non-domestic rates, plus or minus any top up payment received or tariff payment made under Part 5 of Schedule 7B to the Act. For billing authorities an adjustment is made for certain discretionary relief, reductions and remissions, so that their decision to grant such relief does not influence the amount of safety net or levy.

Regulation 5 and Schedule 2 define “business rates baseline” and “baseline funding level” for the calculation of the levy and safety net payments. An authority’s business rates baseline is fixed, whilst its baseline funding level is adjusted annually in line with the change to the small business non-domestic rating multiplier.

Regulation 6 defines the individual levy rate for authorities (this is capped at 0.5 - that is, a levy of 50 pence in the pound) and the safety net threshold.

Regulation 7 provides for safety net payments on account. An authority can request such a payment if it is likely its retained rates income for the year will be below its safety net threshold.

Regulation 8 sets out the circumstances in which a safety net payment is required, and how the amount of that payment is calculated.

Regulation 9 sets out the circumstances in which a levy payment is required, and how the amount of that payment is to be calculated.

No separate impact assessment has been prepared for these Regulations, but the impact assessment prepared for the Local Government Finance Act 2012 is relevant:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/8470/2054063.pdf