Important update on retail relief
Following the recent March Budget the Chancellor has now further announced the extension of Retail Relief to apply to all occupied retail, leisure and hospitality properties in the year 2020/21. There will be no rateable value limit on this relief.
For clarification, properties that have closed temporarily due to COVID-19 should be treated as occupied and therefore will receive the relief. This applies to England only and devolved parliaments will have their own support.
The Government guidance states that the following sectors are to receive relief if they are occupied wholly or mainly:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues (there are detailed notes on what the Government intends to be covered by this relief, however, as an example this also includes car showrooms, petrol stations, markets and garden centres are covered by this relief)
- for assembly and leisure (amongst others, to include museums, nightclubs, sports and leisure facilities, theatres, gyms, clubhouses and public halls)
- as hotels, guest & boarding premises and self-catering accommodation (amongst others to include holiday homes and caravan parks)
Whilst the Government provides detailed notes on which property types are intended to be covered, it will be for Local authorities to determine what property types will receive this relief, for example, where there are uses not covered in the official guidance, such as mixed-use properties.
The Government also clarifies which uses are not intended to be eligible for relief, including financial services, medical services and professionals services and again it is for local authorities to decide for themselves where particular properties are broadly similar to those not intended to receive relief. Also this list of non-eligible property classes is being reviewed by the Government, for example, nurseries, estate agents, letting agencies and bingo halls will now also be included in the 100% business rates relief for 2020/21.
A key change within this extended relief in addition to abolishing the coming rate year’s rates liability is that the Government intends for this to free from State Aid Rules. At the time of writing, the position is that the Government has notified the EU of its intention to bring forward an immediate change to the UK’s tax treatment of non-domestic property,
This states that “Authorities should prepare to award the discount ignoring de minimis limits and Ministry of Housing, Communities and Local Government (MHCLG) will inform them of the outcome of the notification as soon as it is known.”
Should you wish to obtain advice on whether your properties might be entitled to the Expanded Retail Discount, for example, if you are not sure if your property is in one of the recommended sectors, please get in touch with our team.
There could still be strategies to consider if your property was already vacant prior to the coronavirus outbreak, not covered by this relief. There might also be scope to appeal any properties that do not benefit from the exemption, as the effects of coronavirus may constitute grounds for appealing the rateable value. Furthermore, if locations are mothballed or partially vacant, there could be scope for empty rates relief of up to six months depending on the property type. Please do get in touch, if you want any advice.
The Government have further announced Grants to support businesses impacted by COVID-19.
There are two Grants related to business rates made up of the Small Business Grant Fund for organisations in receipt of Small Business Rates Relief or Rural Rate Relief with an assessment under £15,000 and the Retail, Hospitality and Leisure Grant aimed at businesses with assessments under £51,000 who are entitled to Retail Relief (now known as Expanded Retail Discount).