The government is battling the impact on businesses of COVID-19 by introducing a raft of measures to help preserve the economy and safeguard jobs. One such measure which will benefit businesses in the retail, hospitality and leisure sectors is the introduction of a business rates holiday for the 2020–2021 tax year.
The measure currently only benefits businesses based in England but it is widely anticipated that the change will be extended to Wales and Scotland through their devolved administrations.
For now the measures will help those businesses in England which rely on the participation and interaction of members of the public and for whom the requirement to self-isolate and to maintain social distancing has had an immediate and profound impact. This includes:
- Bars and drinking establishments
- Live music venues
- Guest houses/ boarding and self-catering accommodation
- Premises used for assembly and leisure facilities
Premises that will benefit from the relief are those used for providing facilities to visiting members of the public. This will include charity shops, opticians, post offices, petrol stations, garden centres furniture shops, hairdressers, travel agents, dry cleaners and launderettes, funeral directors and car hire firms as well as restaurants, sandwich shops, pubs and bars.
Premises regarded as providing facilities for assembly and leisure include sports grounds and gyms as well as nightclubs, theatres, tourist attractions, stately homes, clubs and clubhouses.
The government has indicated that certain uses will not be eligible for the relief including financial services such as banks, professional services such as solicitors and accountants, premises used for the provision of medical services such as dentists, doctors and vets, estate agents, letting agents and casinos and gambling establishments.
The examples are not intended to be exhaustive but will be used as a guide for local authorities when considering whether or not a particular use is one that the government believes should be eligible for relief. Central government will refund local authorities for the lost revenue and it will be up to each local authority to determine how to deal with the distribution of the relief provided.
Businesses may also be entitled to a cash grant where they have a rateable value of under £51,000 while small businesses which may pay little or no business rates because of other reliefs available to them, will be entitled to receive a one-off grant of £10,000 to help with ongoing operational costs.
Nurseries will also benefit from a business rates holiday where they are providers of OFSTED’s Early Years Register or are wholly or mainly used for the provision of the Early Years Foundation Stage.
In view of the complexity of the measures introduced (and still being introduced) by the government to support businesses at this unprecedented time, an additional advantage of the changes to the rating scheme is that businesses do not need to apply for the support offered. Instead the obligation falls on the relevant local authority to contact qualifying businesses and to issue revised invoices for the rating year. As with other rating reliefs, the test that will be applied is how premises are used rather than the identity of the occupier. It is also clear that the relief will be available notwithstanding that premises may be closed temporarily as a result of the government’s advice. As the relief applies after the implementation of other reliefs available, this process may take a little time but it will provide welcome support in a challenging environment for many.