The 15-month business rates exemption brought in when the pandemic broke is set to end on June 30.
Since 2019/20 the government has provided a Business Rates Retail Discount for retail properties which for 2020/21 it expanded to include the leisure and hospitality sectors.
On 3 March 2021 the government then confirmed that the Expanded Retail Discount would continue to apply in 2021/22 at 100% for three months, from 1 April 2021 to 30 June 2021, and at 66% for the remaining period, from 1 July 2021 to 31 March 2022.
The also government confirmed that there would be no cash cap on the relief received for the period from 1 April 2021 to 30 June 2021. From 1 July 2021, relief will be capped at £105,000 per business, or £2 million per business where the business is in occupation of a property that was required, or would have been required, to close, based on the law and guidance applicable on 5 January 2021.
In Scotland and Wales, because of devolved powers, businesses are being offered more protection from the hike, with 100% rates relief through until March 2022.
Some rating experts are calling for the Government to scrap the £2m cap for the retail sector which have only had weeks not months of trading, and the vast majority of those with social distancing restrictions.
Earlier this month the expert Colliers the government to reconsider its business rates strategy after the government announced its lockdown extension until July 19.
John Webber of Colliers said, “The delay in lifting restrictions creates a real problem for many sectors of our economy, particularly in retail and hospitality, as for many businesses, the ending of government support and reliefs will now be before restrictions are fully lifted- not after, as previously planned.
This means businesses in the retail and hospitality sectors, both impacted by costly coronavirus health and safety measures and social distancing policies which affect the bottom line, will be seeing business rates bills return on July 1st. For some of the bigger players the £2m cap on rates relief means that many will be back to almost full business rates payments during the summer. And as June 30th is also the date that the moratorium on the evictions of tenants is lifted, this could be a tough period for businesses in both sectors.”
It is has been reported that the delay in lifting restrictions is costing the pub sector £400 million alone.
“And turning to offices, the situation is even worse,” says Webber. “Not only have office occupiers received no business rates holidays during the pandemic, but the government’s announcement in late March that it will rule out any business rates appeal submitted on the grounds of Covid-19 related Material Change of Circumstance, give office occupiers nowhere to go.”
“Many office based businesses have been severely affected by the lockdown, particularly those in the serviced office business, who cannot rent out their space as the nation adheres to government policy to “work from home if you can.”
“ By delaying the lifting of restrictions to 19th July, I believe you’ll find many businesses deciding it’s probably not worth going back into their space until September, given the” return to the office to work” coincides with the start of the holiday season. So, we will be seeing nearly a 3 months delay in all rather than just a couple of weeks.” says Webber.
Webber also said that he felt it is unjust that although the government has promised a £1.5 billion business rates relief fund to compensate businesses for not being able to appeal their bills on grounds of MCC, this, “not only comes nowhere near compensating what businesses have lost through the pandemic” , but also the guidance on how to obtain this fund has yet been published. “Businesses have received nothing from this fund so far, and don’t know yet when they will receive something or how to apply for it.” “It’s a shambles!”
“The VOA are getting ready to drop their July rates bills – the government must take action and provide a further rates holiday- a minimum of three months- and extra support to businesses now.”