COVID-19 Additional Relief Fund (CARF)
Craven District Council 2021/22
On 25 March the Government announced a new COVID-19 Additional Relief Fund (CARF) of £1.5 billion. Craven’s share of this is £1,202,035. The fund is available to support those businesses affected by the pandemic but that are ineligible for existing support linked to business rates.
Billing authorities will be responsible for designing the discretionary relief schemes that are to operate in their areas. The relief is available in respect of business rates for 2021/22.
The government has stated that 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) or the Nursery Discount,
- 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 or to certain precepting authorities (e.g. a parish or county council).
It is the Council’s intention to award the maximum discount possible to ratepayers whom we have identified as meeting the above criteria. We have based our decisions as to eligibility having regard to the government guidance as to sectors of business least likely to be adversely affected. This is understood to be a generalisation, and that we may have awarded relief to some businesses that have not been adversely affected or we have not identified other businesses that have been affected. In accepting the relief ratepayers are confirming that our assumptions are correct and that they are eligible.
Ratepayers not wishing to accept the relief because their business does not meet the eligibility criteria should use the online declaration to refuse the relief because either:
- The business has not been adversely affected by the pandemic
- in accepting the relief it would exceed subsidy limits (see below).
Any ratepayer whose business has not been awarded relief but feels that it is eligible is invited to use the online form to make an application. In the first instance the email should include an explanation of what the business does and how it has been affected. The Council may seek whatever further information it feels necessary to make a decision.
Ratepayers who are unable to access the website should ring Customer Services on 01756 700600.
A discount of 40% of the 2021/22 rates liability will be awarded to eligible businesses.
If the amount of relief awarded needs to be recalculated in the event of an increase in rateable value the Council reserves the right not to increase the amount of CARF above the amount of the initial award.
Subsidy Control Trade and Co-operation Agreement
What follows is a summary of the main points – for further detail see the government guidance
Providing discretionary relief 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 (see the BEIS guidance for public authorities which explains the subsidies chapter of the UK-EU Trade and Cooperation Agreement (TCA), World Trade Organisation rules on subsidies, and other international subsidy control commitments).
To the extent that a Local Authority is seeking to provide relief that falls within the Small Amounts of Financial Assistance Allowance, Article 364 of the TCA allows an economic actor (e.g. a holding company and its subsidiaries) to receive up to 325,000 Special Drawing Rights (£343,000 as at 9 December 2021) in a three-year period (consisting of the current financial year and the two previous financial years).
To administer a subsidy under the Small Amounts of Financial Assistance Allowance it is necessary for the Local Authority to establish that the award of subsidy will not result in the economic actor having received more than £343,000 of subsidy under the Small Amounts of Financial Assistance Allowance.
Where the Small Amounts of Financial Assistance Allowance has been reached, additional relief may be awarded in compliance with the principles set out in Article 366 of the TCA and in compliance with Article 364.3 of the TCA. For the purposes of this scheme, the COVID-19 Additional Relief Fund Allowance, permits an economic actor to receive additional relief of up to a further £1,900,000 for COVID-19 related losses. This may be combined with the Small Amounts of Financial Assistance Allowance to permit an economic actor to receive up to £2,243,000 from the CARF Scheme (or less if they have already used some of their Small Amounts of Financial Assistance limit or claimed other COVID-19 related subsidies).
It should be noted that Extended Retail Discount granted in either 2020/21 or 2021/22 does not count towards these allowances, but BEIS business grants (throughout the 3 years) and any other subsidies claimed under the Small Amounts of Financial Assistance limit (such as the Retail Relief in 2019/20), or under the EU State aid de minimis limit, in the last three years, should be counted.
If an economic actor has reached the £2,243,000 limit set out above, then it may still be able to receive up to a further £10 million as a COVID-19 Additional Relief Fund Further Allowance under the CARF Scheme, if it satisfies the following conditions:
- the relief relates to uncovered fixed costs (i.e. costs not covered by profits or insurance etc) during the period of COVID-19 (commencing 1 March 2020). An economic actor may benefit from relief up to 70% of their uncovered costs (although this 70% limit does not apply to small businesses with fewer than 50 employees and less than £9 million turnover where the limit is instead 90%),
- the enterprise has shown a decline in turnover during the eligible period of at least 30% compared to the same period in 2019.