New Business Rates to Combat Economic Impact of Coronavirus
The government has announced major changes to business rates in a reaction to the coronavirus (COVID-19) crisis.
What's Changed?
The government has brought in an unprecedented package of support for businesses to assist with the economic downturn and the effect of lockdown measures on shops and leisure facilities.
Businesses will be eligible for a 12 month holiday on their business rates and if this applies to you or your tenant, the local authority should have already been in touch with a revised bill.
For the period between the date of the announcement and the relief holiday starting on 1 April 2020, businesses are also able to claim relief on payments made.
Who Does it Apply to?
The new relief is available to:
- Shops
- Restaurants, cafes and pubs
- Leisure facilities including cinema or live music venue, bingo halls
- Letting agents
- Nurseries
Larger retail and leisure chains may not be able to benefit from the rates holiday as there is a cap on the amount of tax relief a business can claim over three years. Most large firms will have already reached the limit as a result of rates relief provided in previous years.
When Will it Apply?
This relief will apply for the 2020/2021 tax year, starting on 1 April 2020. Eligible businesses should receive a zero bill or credit note from their local authority and you should apply to the local authority if you or your tenant are not getting the relief you believe you are entitled to.
If businesses have made payments in the meantime they will also be refunded by the local authority.
What Does This Mean for My Lease?
You should check the wording of your lease carefully as the impact will depend on who is responsible for payment of business rates. If the rent is inclusive of rates and utilities, check whether your tenant has received a letter as these rates will not be payable. For some tenants, they need the landlord's consent to seek reliefs from business rates so all tenants should check their leases to see whether they need to involve their landlord in the process.
A Wider Business Rates Review?
Prior to coronavirus, the government announced it was undertaking a fundamental review of business rates although consultation has not yet begun. It is likely that further announcements will be made in the Autumn Budget so watch this space.