Budget Business Rates Reliefs

The government has already announced the Business Rates Retail Discount will be increased to 50% in 2020-21 (it was 33% in 2019/20). To support small businesses affected by COVID-19 the government is increasing it further to 100% for 2020-21. Retail Discount applies to various categories of retail property, including petrol stations, and the relief will also be expanded to the leisure and hospitality sectors. The relief only applies to Rateable Values below £51,000. These temporary measures, taken together with existing Small Business Rates Relief, mean that around 900,000 properties, or 45% of all properties in England, will receive 100% business rates relief in 2020-21. Although this figure of 45% is impressive at first glance, it does already include from 2017 all Small Business ratepayers with RVs under £12,000.
The government has also already announced the introduction of a £1,000 Business Rates discount for pubs with a rateable value below £100,000 in England for one year from 1 April 2020. To support pubs in response to COVID-19 the discount will be increased to £5,000. Local authorities will be fully compensated for these Business Rates measures.

Clients should be aware that Retail Discount is subject to EU State Aid Rules which only allow a company or group aggregate relief of €200,000 in a rolling 3 year period. Clients with large portfolios may have already reached the maximum in previous years. Smaller clients should be aware that the increase in the relief percentage may also tip them over – theoretically, this could happen to operators with as few as 5 – 6 locations.

Business rates review – The government is launching a fundamental review of business rates to report in the autumn. The Terms of Reference for this review are published online alongside the Budget and a call for evidence will be published in the spring. We are promised that this will be a truly comprehensive review and its work will cover consideration of:

• improvements to support the 2021 revaluation;#
• substantial reforms to the current system including how rental values are determined, the treatment of plant and machinery, and how the multiplier is set;
• the administration of business rates; and
• alternative taxes