A package of measures to support UK business: Business rate relief, commercial rent and grants explained

Business rates holiday for retail, hospitality, leisure and nursery businesses

The government is introducing a business rates holiday for businesses in the retail, leisure and hospitality sectors to help them through disruption caused by Covid-19. These businesses won’t have any business rates to pay in 2020/21.

Registered Nurseries that are eligible in England will also get a year off paying business rates for tax year 2020/21.

Businesses that received the retail discount in the 2019/20 tax year will be rebilled by their local authority as soon as possible. Properties that will benefit from the relief will be occupied hereditaments (any kind of property or right relating to property that can be inherited) 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.

Please note there is no action is required to access the relief and this will apply to the next council tax bill in April 2020.

Commercial Tenants

Regarding commercial tenants, it has also been announced that those who cannot pay their rent because of coronavirus will be protected from eviction. These measures, included in the emergency Coronavirus Bill currently going through Parliament, will mean no business will be forced out of their premises if they miss a payment in the next three months.

To comply with this scheme business properties must be “wholly and mainly used” for one of the qualifying purposes set out above.  This raises many questions and potential complications for example, with serviced offices where different businesses may occupy the same premises but operate different trades and circumstances where the rates demand may be in the name of the landlord for convenience purposes.

Whilst the general  government guidance states that premises that are occupied but not wholly or mainly used for a qualifying  purpose will not qualify for the relief there could be situations where the occupier of the property can still claim the relief if they can demonstrate they are the rateable occupier.  The Local Authority has a degree of discretion to award the relief where it can be shown that the information they hold is not accurate or up to date.

In the case of the rates bill being in the name of the landlord, the landlord may wish to pass on any relief to the occupier, however this may depend upon the agreement between landlord and tenant, and the information held by the Local Authority.

Businesses in any of these circumstances  may wish to contact their Local Authority for further guidance. The government has pledged to review the business rates system as a whole and will publish its findings in the autumn.

Grants

The government has also announced

• £10,000 grant funding for all business in receipt of small business rate relief or rural rate relief
• £25,000 grant funding for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.

Any enquiries on eligibility for, or provision of, the reliefs and grants should be directed to the relevant local authority. Guidance on the scheme will be provided to local authorities shortly.

Please contact the Mercer & Hole team to discuss. We are focussed on supporting you and your business through this uncertain time.