The Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2022

Made: 25th February 2022

Coming into force: 26th February 2022

A draft of this instrument was laid before and approved by a resolution of each House of Parliament in accordance with section 143(9D)[^f00002] of that Act.

Citation, commencement, extent and application

1

• (1) These Regulations may be cited as the Non-Domestic Rating (Levy and Safety Net) (Amendment) Regulations 2022 and come into force on the day after the day on which they are made.

• (2) These Regulations extend to England and Wales.

• (3) These Regulations apply in relation to England only.

Amendment of the Non-Domestic Rating (Levy and Safety Net) Regulations 2013

2

The Non-Domestic Rating (Levy and Safety Net) Regulations 2013[^f00003] are amended as follows.

Amendment of regulation 2

3

In regulation 2(1) (interpretation), in the definition of “business rates baseline”—

• (a) at the end of sub-paragraph (b) omit “and”;

• (b) after sub-paragraph (c) insert—

and (d) for a year commencing on or after 1st April 2021, the amount specified with respect to an authority by regulation 5 and Schedule 6;

Amendment of regulation 4

4

In regulation 4 (meaning of retained rates income for purposes of levy and safety net calculations)—

• (a) in paragraph (1) for the words from “paragraphs 1 and 1A of Schedule 1” to the end substitute “paragraphs 1 and 1A of Schedule 1, paragraphs 3 and 4 of Schedule 1A and paragraph 4 of Schedule 1B”;

• (b) in paragraph (2) for the words from “paragraph 2 of Schedule 1” to the end substitute “paragraph 2 of Schedule 1, paragraphs 5, 6, 7 and 8 of Schedule 1A and paragraph 5 of Schedule 1B”.

Amendment of regulation 5

5

In regulation 5 (business rates baseline and baseline funding level)—

• (a) after paragraph (1B) insert—

(1C) For a year commencing on a date listed in column B of the table in Schedule 6, the business rates baseline of an authority listed in column A of that table is the amount specified with respect to that authority in column C of that table.

• (b) in paragraph (3) for “or (3ZB)” substitute “, (3ZB) or (3ZC)”;

• (c) after paragraph (3ZB) insert—

(3ZC) For a year commencing on a date listed in column B of the table in Schedule 6, the baseline funding level for an authority listed in column A of that table is the amount specified with respect to that authority in column D of that table.

Amendment of regulation 6

6

In regulation 6 (individual levy rates and safety net thresholds)—

• (a) in paragraph (2A), for “or (2F)” substitute “, (2F), (2H) or (2I)”;

• (b) after paragraph (2G) insert—

(2H) For an authority listed in Part 2 of Schedule 3, the individual levy rate for a relevant year beginning on or after 1st April 2021 is zero. (2I) For an authority listed in column A of the table in Schedule 6, for a relevant year beginning on or after the date specified with respect to that authority in column B of that table, the authority’s individual levy rate is 0.5 or the figure calculated in accordance with the formula in paragraph (2J), whichever is less. (2J) The formula is— $$1-GH$ where— G is the authority’s baseline funding level listed in column D of the table in Schedule 6; and H is the authority’s business rates baseline listed in column C of that table.$

Amendment of Schedule 1

7

• (1) Schedule 1 (calculation of retained rates income) is amended as follows.

• (2) In paragraph 1(1)—

• (a) in the definition of P—

• (i) in paragraph (a), for “or (e)” substitute “, (e), (f) or (g)”;

• (ii) after paragraph (e), insert—

(f) where the billing authority is listed in Parts 2 to 8 of Schedule 3, for the relevant year beginning on 1st April 2021, the amount calculated for that authority in accordance with the formula— $$A×BC$ where— A is the amount specified for that authority in column E of the table in Schedule 4; B is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2021; and C is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2018;$ (g) where the billing authority is listed in Parts 2 to 8 of Schedule 3, for the relevant year beginning on 1st April 2022, the amount calculated for that authority in accordance with the formula— $$A×BC$ where— A is the amount specified for that authority in column E of the table in Schedule 4; B is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2022; and C is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2018;$

• (b) in the definition of Q—

• (i) in paragraph (a), for “or (e)” substitute “, (e), (f) or (g)”;

• (ii) after paragraph (e), insert—

(f) where the billing authority is listed in Parts 2 to 8 of Schedule 3, for the relevant year beginning on 1st April 2021, the amount calculated for that authority in accordance with the formula— $$A×BC$ where— A is the amount specified for that authority in column F of the table in Schedule 4; B is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2021; and C is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2018;$ (g) where the billing authority is listed in Parts 2 to 8 of Schedule 3, for the relevant year beginning on 1st April 2022, the amount calculated for that authority in accordance with the formula— $$A×BC$ where— A is the amount specified for that authority in column F of the table in Schedule 4 B is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2022; and C is the small business non-domestic rating multiplier in relation to the year beginning on 1st April 2018;$

• (c) in the definition of Y, after paragraph (c) insert—

(d) for an authority listed in column A of the table in Schedule 6, for a relevant year beginning on or after the date specified in respect of that authority in column B of that table, the amount specified for that authority in column F of that table.

• (3) In paragraph 1(4B)—

• (a) in sub-paragraph (b), for “or (d) applies” substitute “, (d) or (e) applies”;

• (b) after sub-paragraph (d) insert—

(e) for an authority listed in column A of the table in Schedule 6, for a relevant year beginning on or after the date specified in respect of that authority in column B of that table, the percentage specified for that authority in column E of that table.

• (4) In paragraph 2—

• (a) for the formula which appears immediately after the opening words substitute—

(a) subject to sub-paragraph (b)— $SR+U+V+Z+P-Q$ (b) for the relevant years beginning on 1st April 2020 and on 1st April 2021— $SR+U+V+Z+W+P-Q$ .

• (b) at the end of the definition of V, omit “and”;

• (c) after the definition of V, insert—

W is— (a) for the relevant year beginning on 1st April 2020, the amount calculated for that authority in accordance with the formula— $$A-B$ where— A is the sum of the amounts of relief awarded under section 47 of the 1988 Act by all the billing authorities required to make payments to the major precepting authority for the relevant year under Part 4 of Schedule 7B to the 1988 Act, where the relief has been awarded in accordance with the following guidance issued by the Secretary of State— “Expanded Retail Discount 2020/2021: Coronavirus Response – Local Authority Guidance” published on 2nd April 2020[^f00004], updating guidance published on 30th November 2018[^f00005]; “Nursery Discount 2020/2021: Coronavirus Response – Local Authority Guidance” published on 2nd April 2020[^f00006], updating guidance published on 20th March 2020, excluding amounts of any such relief awarded in a designated area; and Annex A of “The case for a Business Rates Relief for local newspapers –Government Response”, published on 8th July 2015 and updated on 2nd December 2016[^f00007], extended until 31st March 2025 by a Written Ministerial Statement on 27 January 2020 from the Financial Secretary to the Treasury[^f00008]; B is the sum of the estimates, made by all billing authorities required to make payments to the major precepting authority for the relevant year under Part 4 of Schedule 7B to the 1988 Act, as part of their calculation of non-domestic rating income for the year beginning 1st April 2020, of the amount of relief awarded under section 47 of the 1988 Act in accordance with the guidance issued by the Secretary of State entitled “Retail Discount 2020/21 – Local Authority Guidance” published on 27 January 2020[^f00009];$ (b) for the relevant year beginning on 1st April 2021, the sum of the amounts of relief awarded under section 47 of the 1988 Act by all the billing authorities required to make payments to the major precepting authority for the relevant year under Part 4 of Schedule 7B to the 1988 Act, where the relief has been awarded in accordance with the following guidance issued by the Secretary of State— (i) “Business rates: expanded retail discount 2021 to 2022 – local authority guidance” published on 4th March 2021[^f00010]; (ii) “Business rates: nursery (childcare) discount 2021 to 2022 – local authority guidance” published on 4th March 2021[^f00011]; and (iii) “COVID-19 Additional Relief Fund (CARF): Local Authority Guidance” published on 15th December 2021[^f00012].

Insertion of Schedules 1B and 6

8

• (1) After Schedule 1A insert Schedule 1B which is set out in Schedule 1 to these Regulations.

• (2) After Schedule 5 insert Schedule 6 which is set out in Schedule 2 to these Regulations.

SCHEDULE 1

SCHEDULE 2

Signed

Signed by authority of the Secretary of State for Levelling Up, Housing and Communities

Kemi Badenoch — Minister of State — Department for Levelling Up, Housing and Communities — 25th February 2022

Explanatory note

(This note is not part of the Regulations)

EXPLANATORY NOTE

These Regulations amend the Non-Domestic Rating (Levy and Safety Net) Regulations 2013 (“the Levy and Safety Net Regulations”). The Levy and Safety Net Regulations are part of the system for the local retention of non-domestic rates established by Schedule 7B to the Local Government Finance Act 1988. They make provision for calculating whether the Secretary of State is required to make a safety net payment to a billing authority or a major precepting authority and whether such an authority is required to make a levy payment to the Secretary of State.

Regulation 3 amends regulation 2 of the Levy and Safety Net Regulations to amend the definition of “business rates baseline”.

Regulation 5 amends regulation 5 of the Levy and Safety Net Regulations to specify the business rates baseline and baseline funding levels for authorities listed in column A of Schedule 6. Schedule 6 is inserted by Schedule 2 to these Regulations.

Regulation 6 amends regulation 5 of the Levy and Safety Net Regulations to define the individual levy rate for authorities listed in Part 2 of Schedule 3 and column A of Schedule 6.

Regulation 7 amends Schedule 1 to the Levy and Safety Net Regulations to provide for the calculation of the retained rates income for authorities listed in Parts 2 to 8 of Schedule 3 and column A of Schedule 6. These amendments also provide a separate formula for calculating the retained rates income of major precepting authorities for relevant years beginning in 2020 and 2021.

Regulation 8 and Schedule 1 insert new Schedule 1B into the Levy and Safety Net Regulations. Schedule 1B makes special provision for the financial year beginning on 1st April 2020 to amend the calculation of retained rates income for the purposes of calculating whether a levy is due to be paid by an authority or a safety net payment is due to be made to an authority. The amendments ensure that in making those calculations proper account is taken of payments made by the Secretary of State to compensate local authorities for loss of business rates income as a consequence of the coronavirus pandemic.

Regulation 8 and Schedule 2 insert new Schedule 6 into the Levy and Safety Net Regulations. Schedule 6 makes provision for the business rates baseline and baseline funding level (and other associated values for the calculation of retained rates income) for the financial year beginning on 1st April 2021 in respect of new local authorities established on that date.

In calculating its retained rates income for the year beginning on 1st April 2020, the amendments made to Schedule 1, and new Schedule 1B, require a billing authority and a major precepting authority to include in its calculations amounts of rates relief awarded in accordance with guidance issued by the Secretary of State. Hard copies of the guidance can be obtained free of charge by writing to the Local Government Finance Team, Department for Levelling Up, Housing and Communities, 2 Marsham Street, Westminster, London, SW1P 4DF.

An impact assessment has not been produced for this instrument because it amends an existing local tax regime. Publication of a full impact assessment is not necessary for such legislation.

Footnotes

[^f00001]: 1988 c. 41. Schedule 7B was inserted by section 1 of, and Schedule 1 to, the Local Government Finance Act 2012 (c. 17).

[^f00002]: Subsection (9D) was inserted in section 143 by section 1 of the Local Government Finance Act 2012.

[^f00003]: S.I. 2013/737, amended by S.I. 2014/822, S.I. 2015/617, S.I. 2015/2039, S.I. 2017/496, S.I. 2018/463, S.I. 2019/709 and S.I. 2020/1357.

[^f00004]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/919752/Expanded_Retail_Discount_Guidance_02.04.20.pdf. See also the Explanatory Note.

[^f00005]: https://webarchive.nationalarchives.gov.uk/ukgwa/20200204131505/https:/www.gov.uk/government/publications/business-rates-retail-discount-guidance. See also the Explanatory Note.

[^f00006]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/877772/Nursery_discount_guidance_April_2020.pdf. See also the Explanatory Note.

[^f00007]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/574420/Business_rate_review_Government_Response__1_.pdf. See also the Explanatory Note.

[^f00008]: https://questions-statements.parliament.uk/written-statements/detail/2020-01-27/HCWS64. See also the Explanatory Note.

[^f00009]: https://webarchive.nationalarchives.gov.uk/20200304033723/https://www.gov.uk/government/publications/business-rates-retail-discount-guidance. See also the Explanatory Note.

[^f00010]: https://www.gov.uk/government/publications/business-rates-expanded-retail-discount-2021-to-2022-local-authority-guidance/business-rates-expanded-retail-discount-2021-to-2022-local-authority-guidance. See also the Explanatory Note.

[^f00011]: https://www.gov.uk/government/publications/business-rates-nursery-childcare-discount-2021-to-2022-local-authority-guidance/business-rates-nursery-childcare-discount-2021-to-2022-local-authority-guidance. See also the Explanatory Note.

[^f00012]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1041383/CARF_LA_Guidance.pdf. See also the Explanatory Note.

[^f00013]: 2003 c. 26.

[^f00014]: S.I. 2013/452, as amended by S.I. 2014/96, S.I. 2015/628, S.I. 2016/317, S.I. 2016/1268, S.I. 2017/318, S.I. 2017/496, S.I. 2017/1321, S.I. 2018/463, S.I. 2019/709, S.I. 2020/449, S.I. 2020/1202, S.I. 2020/1357, S.I. 2021/262 and S.I. 2021/404.

[^f00015]: S.I. 2013/107 has been made under paragraph 39(1)(a).

[^f00016]: S.I. 2021/398.

[^f00017]: Renewable energy and shale and oil gas sites are designated hereditaments under the Non-Domestic Rating (Renewable Energy Projects) Regulations 2013 (S.I. 2013/108) and the Non-Domestic Rating (Shale Oil and Gas and Miscellaneous Amendments) Regulations 2015 (S.I. 2015/628). Part 3 of both of those Regulations make provision for amounts to be disregarded for the purposes of certain calculations made under Schedule 7B of the 1988 Act.

[^f00018]: Regulation 7A was inserted by regulation 11 of S.I. 2015/628.

[^f00019]: “Case B hereditament” is defined in paragraph 1(1) of Schedule 2 to the 2013 Regulations. The rules for calculation of qualifying relief for case B hereditaments (to which the payments under regulation 6 of the 2013 Regulations relate) are set out in Paragraph 3 of that schedule.

[^f00020]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/579353/BRIL_3.pdf. See also the Explanatory Note.

[^f00021]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/927282/BRIL_1_-2020-_Multiplier.pdf. See also the Explanatory Note.

[^f00022]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/680938/BRIL__4-2017__-_BUDGET_SCHEMES_UPDATE_rev.pdf. See also the Explanatory Note.

[^f00023]: https://webarchive.nationalarchives.gov.uk/ukgwa/20200306131648/https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/861633/200129_Retail_Discount_Guidance.pdf. See also the Explanatory Note.

[^f00024]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/919752/Expanded_Retail_Discount_Guidance_02.04.20.pdf. See also the Explanatory Note.

[^f00025]: https://webarchive.nationalarchives.gov.uk/ukgwa/20200204131505/https:/www.gov.uk/government/publications/business-rates-retail-discount-guidance. See also the Explanatory Note.

[^f00026]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/877772/Nursery_discount_guidance_April_2020.pdf. See also the Explanatory Note.

[^f00027]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/574420/Business_rate_review_Government_Response__1_.pdf. See also the Explanatory Note.

[^f00028]: https://questions-statements.parliament.uk/written-statements/detail/2020-01-27/HCWS64. See also the Explanatory Note.

[^f00029]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/239343/Business_Rates_-New_Build_Empty_Property-_Guidance.pdf. See also the Explanatory Note.

[^f00030]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/297995/210314_Business_Rates_Reoccupation_Relief__Guidance1.pdf. See also the Explanatory Note.

[^f00031]: https://webarchive.nationalarchives.gov.uk/ukgwa/20140323210246/https:/www.gov.uk/government/publications/business-rates-retail-relief. See also the Explanatory Note.

[^f00032]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/383869/BRIL_11_-2014__-__Revised__Autumn_Statement__Other_Measures-_1_Dec.pdf. See also the Explanatory Note.

[^f00033]: https://www.gov.uk/government/publications/flood-recovery-framework-guidance-for-local-authorities-in-england/flood-recovery-framework-guidance-for-local-authorities-in-england#business-rate-relief-scheme. See also the Explanatory Note.

[^f00034]: https://webarchive.nationalarchives.gov.uk/ukgwa/20211027201927/https:/www.gov.uk/government/publications/flood-recovery-framework-guidance-for-local-authorities-in-england. See also the Explanatory Note.

[^f00035]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/395131/TR_extension_guidance.pdf. See also the Explanatory Note.

[^f00036]: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/861146/200127_Pub_Discount_Guidance.pdf. See also the Explanatory Note.