Coronavirus: business rates relief schemes

BUSINESS RATES RELIEF

Current Business Rates Relief Schemes

Prior to the COVID-19 issue, some businesses could already have been eligible for some form of relief from paying Business Rates (e.g. Small Business Rates Relief, Retail Discount, Rural Rates Relief etc).

You may already be able to get a form of business rates relief from your local council to reduce your bill. This is sometimes automatic, but you may need to apply and the process depends on whether you’re in England or Wales.

There are some details online - https://www.gov.uk/apply-for-business-rate-relief - on what types of buildings may benefit from automatic relief and which ones require you to make a claim by contacting your local council. Your council should automatically apply “exempted buildings and empty buildings relief” or “transitional relief” if your rates change on review by a certain amount.

Small Business Rates Relief

Regardless of the COVID-19 changes announced (see below), you are already able to claim small business rate relief if:

  • your property’s rateable value is less than £15,000;
  • your business only uses one property - you may still be able to get relief if you use more though.

You should contact your local council to apply for small business rates relief as soon as possible.

The result of this relief could be that you will not pay business rates on a property with a rateable value of £12,000 or less.

Retail discount

You could already qualify for retail discount if your business:

  • is a shop, restaurant, café, bar or pub;
  • is in England;
  • has a rateable value of less than £51,000.

You would need to contact your local council to find out if you’re eligible. It would not appear that online retail businesses would qualify for this discount, but we would suggest that you ask your local council nonetheless.

If you’re eligible under the above categories, you could have already been able to claim a 33.33% discount off your business rates bill and can get this retail discount on top of any other business rates relief you’re eligible for, such as small business rates relief described above. The retail discount is available for the 2019 to 2020 and 2020 to 2021 tax years.

The previous Chancellor, Sajid Javid, had also announced in January 2020 that “small” shops and cafes and also pubs would be entitled to an increased retail discount of 50%, representing an increase on the 33.33% discount, mentioned above. This change was set to apply from April 2020. In addition, specifically for “small” pubs, he had announced that these would qualify for a further £1,000 “pubs relief” which would be taken off the business rates bill, where applicable.

The £1,000 pubs relief was stated to apply to pubs with a rateable value below £100,000, subject to eligibility. Pubs with a rateable value of below £51,000 should already qualify for the 33.33% reduction in their rates bill through the retail discount, as mentioned above. The £1,000 discount would have been in addition and would have applied after the retail discount.

This is a specialist area and we may be able to refer you to someone with the necessary expertise, but our understanding is that many businesses which could be eligible for relief, even prior to COVID-19, may not be aware that they could make a claim.

Certain properties are totally exempt from business rates, for example, farm buildings or places used for the welfare of disabled people.

COVID-19 RELATED CHANGES

Following COVID-19, the government’s Budget support package announced on 11 March 2020, covered two main types of business; those who pay business rates and those who pay minimal or zero business rates. Additional grants for some businesses were also announced.

The current position, following the subsequent changes and extended definition of “retail”, is outlined below.

Support for businesses who currently pay business rates

A business rates holiday (100% retail discount) for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.

Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.

You are eligible for the business rates holiday if:

  • your business is based in England;
  • your business is in the retail, hospitality and/or leisure sector.

The current guidance (as at 23 March 2020) now states that properties that will benefit from the 100% holiday (retail discount) will be occupied hereditaments that are wholly or mainly being used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues;
  • for assembly and leisure;
  • as hotels, guest & boarding premises and self-catering accommodation.

How to access the scheme

If your business qualifies, there is no action for you. The discount will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

You can estimate the business rate charge you will no longer have to pay this year using the business rates calculator here https://www.gov.uk/calculate-your-business-rates. And further guidance is available in the expanded retail discount guidance here: https://www.gov.uk/government/publications/business-rates-retail-discount-guidance.

Business grants

The government is providing an additional £2.2 billion funding for local authorities to support small businesses through the Small Business Grants Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLGF). Please see our updated factsheet for further details here.

Please note that this is only a summary of the main issues and should not be construed as advice. Every effort has been made to ensure factual accuracy at the time of publication (23 March 2020), however, the government response to the Coronavirus situation is changing 24-7, so it should not be relied upon completely.

For further information or advice on any of the issues raised, or for help with services like bookkeeping, cash flow management or payroll during the Coronavirus pandemic, please call us on 01225 325580, email info@richardsonswift.co.uk, or contact your usual client director.