_Qualifying large business to benefit in full from 12-month business rates holiday

On the 23rd March the Government extended the Retail Relief Scheme to include Leisure & Hospitality venues and increased the relief to provide complete exemption from business rates for the entire 2020/21 rate year. This was followed on the 26th March with the inclusion of some additional businesses into the scheme, which were on a list of enforced closures. 

On Thursday, the Government have announced that following discussions with the EU Commission, they are now satisfied that the Business Rates relief will not be subject to the State Aid limit which is set at a maximum of € 800,000 per company. This means Large Businesses will now get the full benefit of the relief. Details of the scheme can be found here.

Government current proposals

Business Rates Exemptions – All qualifying Retail, Hospitality and Leisure businesses in England will obtain a 12-month business rates exemption. There is no Rateable Value threshold.

It is important to review the Expanded Retail Discount Guidance as there are certain types of businesses in these sectors, which will not qualify which include: 

• Medical (Dentists & Doctors Surgeries, Veterinary Practices, Chiropractors & Osteopaths)
• Financial Services ( Banks, Building Societies, Cash Points, & Bureau de Change)
• Professional Services ( Solicitors, Accountants, Insurance and Financial Advisers)
• Along with Post Office sorting offices

To clarify, all qualifying businesses that are temporary CLOSED as a result of the COVID-19 will be treated as occupied for this relief. This is welcome news as it allows businesses to keep their stock on site whilst empty.

Grants – Businesses in England who qualify for Small Business Rates Relief (SBBR) will be eligible for a grant of £10,000. The criteria for qualifying for SBRR can be found here.

Further Grants – for Retail, Hospitality and Leisure businesses with a Rateable Value between £15,000 and below £ 51,000 who would have been eligible for the above Expanded Retail Discount Relief Scheme on 11/03/2020 will also be eligible for grants of £ 25,000 per property. However, these grants are subject to State Aid Limits and therefore the maximum obtainable by any one company is € 800,000. More details can be found here.

Further information – on all Government support including the protection from eviction for commercial tenants can be accessed here.

For all businesses affected by the forced closures who don’t qualify for support or for those with restrictions on their staff travelling to and from work unless it is essential, there are a number of measures to consider to mitigate business rates. 

a) Partial Empty Rate Relief – Local Authorities have the discretion to grant partial rates exemption on any non-domestic assessment where the area involved is only temporarily vacant. 

b) Empty Rates Relief – When a property becomes vacant it is entitled to mandatory relief from rates, Commercial & Retail (three months) and Industrial (six months).

c) Intermittent Occupation – If the property is likely to remain vacant after the expiration of the exemption periods then full rates would be payable. However, by establishing intermittent occupation this can reset the exemption. For more details on this specialist area please contact us.

d) Covid-19 Reductions – The rating legislation enables businesses to make a claim for a reduction in their business rates where there has been a ‘material change to the locality’. We consider that the impact of Covid-19 will be sufficiently observable within the locality to qualify as a valid appeal. It is important to note that the timing of the claim cannot be retrospective so we would recommend getting in touch now so we can prepare your case. 

e) Prohibited from Occupying Premises – We consider that the enforced closure of business through the exercise of The Health Protection (Coronavirus) Regulations 2020 and the increased restrictions contained in the Coronavirus Act 2020 is sufficient to make an application to Councils for business rates exemption during this period. The Unoccupied Property Regulations provide for such an exemption but Councils may seek to resist the claim if there are any files left on the premises. We consider that this can possibly be countered by the fact that the files cannot be beneficially used by the business and therefore would not constitute occupation. Please get in touch for further information on this.

f) 2017 Rating List – The Government are now consulting on the closure of the right to challenge your current business rates assessment. At present this is likely to be in just over 12 months and if you haven’t already had a Professional Adviser review your assessment we would urge you to take action.

g) 2021 Rating List – The Valuation Office Agency are currently revaluing all rating assessments for a new rating list which comes into force on 1st April next year. The draft valuations will be available later in the year and it is important that businesses seek advice on the likely impact this will have to their budget.

For further advice, please contact us.