Government extends corporate rate relief by £ 1.5bn to help more Covid-hit businesses
The government is providing additional relief to companies that were previously ineligible – including offices and wholesalers – for corporate rates of £ 1.5 billion.
Existing business tariff reductions are available for retailers, leisure and hospitality.
The Association of Small Businesses (FSB) welcomed the move. “Many of these companies such as wholesalers, suppliers and brewers have been badly affected by the pandemic but have not been able to access the same support,” said national chairman Mike Cherry.
Simplified legal remedies filed due to Covid-19 are now also prohibited. These appeals should cost up to £ 5bn, so the government saved itself £ 3.5bn, according to the Rating Surveyors’ Association.
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The government said that allowing interest rate complaints in the event of material changes in circumstances may have resulted in “companies that have been able to operate normally throughout the pandemic to receive significant tax benefits”. This could benefit the companies in London disproportionately.
“It’s wrong on every level”
Experts describe the move as “outrageous” and are writing off the hundreds of thousands of business owners who have already appealed. According to the government’s Valuation Office Agency, 303,260 properties, including offices, pubs and retailers, appealed in 2020 – more than three times the number filed in 2019.
Robert Hayton, UK President for Property Tax at Altus Group, said: “This is outrageous. The major change in circumstances has been part of ratings law for decades and something like a global pandemic is exactly what it is there for.
“You shouldn’t legislate against it just because it’s costing you too much money.”
He said that starting in July, sectors such as retail and hospitality would have to pay rates based on their rental ratings for 2015 through April 2023, when a revaluation was due. Until then, Covid will not be reflected in bills.
John Webber, Head of Business Rates at Colliers, shared a similar opinion.
“The government is ripping out the rules retrospectively. It’s wrong on every level.
“The government’s Valuation Office Agency (VOA) has been negotiating with representatives of interest payers about the impact of Covid-19 and its impact on businesses for the last part of last year after the government worked from home and took social distancing measures, and agreed that these constitute a Substantial Change in Circumstances (MCC) by which companies can claim a discount on their tariff bills.
“Now to deny that this is retrospectively a customer center because the numbers are too high is deeply shocking.”
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