COVID Business Rates Relief Explained
Understanding COVID Business Rates Relief
This month, all eyes were on the Budget, with Chancellor Rishi Sunak announcing an extension to the 100% business rates relief for eligible businesses in the retail, leisure and hospitality sector. The Treasury has since announced £1.5 billion for a COVID business rates relief fund for other sectors. So let’s find out more.
Business Rates Relief for Retail, Leisure and Hospitality – A Recap
Businesses have faced great turmoil during the COVID-19 pandemic, which is why all eyes were on the Budget. As a recap, the 100% business rates relief for eligible properties has been extended until 30th June 2021. From 1 July 2021 until 31 March 2022, rates will be discounted by two-thirds. From April 2022, rates will revert to normal.
Properties eligible for this type of relief include shops, restaurants, cafes, bars, pubs, cinemas, live music venues, sports clubs, gyms, hotels, guest houses, self-catering accommodation and other types of hospitality property. The council should apply the discount automatically to eligible businesses.
COVID Rates Relief for Other Sectors
The pandemic has impacted the business of many sectors, and this has been acknowledged by the government who have made a number of important changes of late.
The first thing to note is that many businesses have been appealing their business rates bill arguing a material change of circumstance (MCC). Those not in the retail, leisure or hospitality sector have been groaning under pandemic pressure, however, the government will legislate to rule out COVID-19 related appeals believing appeals could benefit firms that have not been economically impacted by the pandemic. If a firm made an MCC change because half of their staff worked at home, they may benefit from a reduction in business rates without experiencing significant damage on an economic level.
It’s all a bit complicated – we know. But essentially, the government has decided to introduce a new £1.5 billion scheme that’s designed to help those who are struggling as a direct result of COVID-19. Funds will be distributed according to which sectors have suffered most economically, rather than on the basis of falls in property values. The money will be distributed to local authorities according to how many businesses have been affected in a particular area. The council will use their knowledge of the local economy to make rewards. However, to ensure things remain fair, the Treasury has confirmed that:
“The £1.5 billion pot will be distributed according to official data on the impacts of the pandemic on different sectors, ensuring an even and more proportionate allocation of support across England based on the economic impacts of COVID-19 and not on estimates of the impact on a property’s value.”
The government is giving time for local authorities to set up their relief schemes and therefore applications for the new fund are not yet open. But watch this space. With COVID grants and relief rates changing regularly, it’s important to stay up-to-date with the latest information. Contact us today for clarification of business entitlements.