The Chancellor of the Exchequer Rishi Sunak has delivered his first Budget speech on 11th March 2020 with an influencing factor being the huge impact being felt across the country following the COVID-19 outbreak, so there the benefits to businesses that are clearly greater than would otherwise have been granted.
There has already been an enhanced Retail Relief in place for 2019/20 providing 1/3rd off business rates for qualifying ‘retail’ businesses under £51,000 rateable value. This was expected to increase to a 50% discount for this coming 2020/21 rates year and to be expanded to include cinemas and music venues.
However, the Chancellor yesterday announced some further good news for the retail, leisure and hospitality sectors as he abolished business rates for these businesses if their rateable value is below £51,000. This is still expected to be subject to State Aid Rules, so will be of limited benefit to larger operators. There are various interpretations of ‘retail’ however, the government have announced the retail discount will be expanded to include hospitality and leisure businesses.
Additional benefits will be awarded to small businesses that do not pay rates plus those receiving Rural Rate Relief will get a £3,000 cash grant per business. This is likely to impact 700,000 small businesses across England. Business rates have been devolved to Scotland, Northern Ireland and Wales, so they can establish their own incentives and reliefs.
The existing token gesture of business rates discounts for pubs is set to substantially rise from £1,000 to £5,000, which will be a big welcome on those that benefit, expected to be impacting rateable values under £100,000.
There is no doubt that the Budget was dominated by coronavirus and in these unpresented times, it has called for significant measures for smaller ratepayers. This will still do little to benefit larger retailers and the issues prior to coronavirus still remain in terms of the criticisms of the business rates system itself and regenerating the high street.
To address the wider issues, the government is launching a fundamental review of business rates to report in the Autumn. It seems like we have had some many of these reviews in the past, so it will be interesting to see what the government report back with and how radical the recommendations. In the first instance, there will be a call for evidence to be published in the spring.