Who won and who lost out with the Business Rates Relief changes?
Initially, the government announced that there would be a Business Rates Retail Discount of 100% to apply in the remainder of the 2019/20 financial year and the whole of the 2020/21 financial year.
When further measures were announced to limit the spread of the virus, some businesses were excluded and closed as a result of this and other factors.
In the time since, the government has now published further revised guidance which acknowledged that some of these exclusions had been removed and the affected properties would now be eligible for the relief.
The mechanism for the operation of the scheme is that it will be administered and run by local authorities who will forgo collecting the rateable value due and will then be reimbursed this value by the government so they can continue to provide other services at a local level.
The guidance outlines several categories of venue (or hereditament as described in the publication) which it considers qualified:
- Venues used for the sale of goods to visiting members of the public – shops, markets, petrol stations, post offices and art galleries where you can buy art.
- Venues used for the provision of services to visiting members of the public – hair and beauty shops, dry cleaners, travel agents, estate and employment agencies, betting shops and funeral directors
- Venues used for the sale of food and drink – pubs, takeaways, restaurants
- Venues used as cinemas
- Venues used as live music venues
- Venues used for the provision of sport, leisure including viewing such activities – sports grounds and clubs, nightclubs, stately homes and historic houses, gyms, casinos and bingo halls
- Venues used for the provision of living accomodation as a business – hotels, guest houses, caravan parks and sites
While quite extensive in scope, a line has to be drawn somewhere so there will be some companies that just miss out and just make it.
Among the venues used for a provision of services to visiting members of the public that are not eligible for relief include:
- Financial services – banks, building societies, cash points, bureaux de change
- Medical services – vets, dentists, doctors
- Post office sorting offices
- Professional services – solicitors, accountants, business advisors and rescue experts ☹️
The discount will be calculated and applied on a day-to-day basis so an accountant that opened a guest house would then become eligible whereas a guest house that decided to offer accountancy services would lose their previous relief.
The appendices go into significant detail and examples on specifically what different properties worth different amounts will gain under the various rates relief being applied so you should read these if you want to see precise examples.
The Coronavirus COVID-19 epidemic is an existential crisis for many otherwise profitable and well-run small businesses.
Through no fault of their own, many companies could be facing insolvency in a matter of weeks.
There is some help and advice available for them however.
They will work with you as you outline your main concerns for your company and look at your available options and plot a path back to stability and strength.
We’ve also produced a new infographic, written in plain English, that outlines the latest help and support provided by the government to help tackle the economic damage the virus has spread.