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Business Rates Update - 18 March 2020

18th March 2020

Last night saw the Chancellor of the Exchequer, Rishi Sunak, announce an expansion to the business rates holiday in England, which will rise from 100% relief for the financial year 2020/21 for those retail, leisure and hospitality subjects with rateable values up to £51,000 to 100% rates relief for all within this sector irrespective of rv.

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

This is in addition to the £330 billion package of Government-backed guaranteed loans to small and medium sized businesses that will be on offer. The previously announced business interruption loan size of £1.2m will now also be increased to £5m.

The Scottish Government has also significantly improved their package of reliefs and grants available. The Economy Secretary, Fiona Hyslop, announced this afternoon that the Scottish Government will now mirror in full the package of measures announced by the Chancellor last night as follows:

  1. 100% relief for all retail, hospitality, leisure subjects (previously it was only applicable to rv’s £69,000 or less)
  2. Those entitled to small business rates relief or rural rates relief will be eligible for a £10,000 grant
  3. A £25,000 grant for those leisure, retail and hospitality businesses with an rv between £18,000 and £51,000
  4. A freeze on the 2019/20 UBR rate as follows:
  • Basic rate £51,000 and below = 49p
  • Intermediate rate (RV £51,001-£95,000) = 50.3p
  • Higher Rate (RV >£95,001) = 51.6p

 

Kate Forbes, Finance Secretary, has also confirmed the reliefs will be automatically applied to rates bills from 1st April 2020. A list will be published online for businesses to check if they are eligible.

This is welcome news for some within the worst affected sectors. Previously, state aid limits were capped at €200,000 over a 3 year period and this has now been temporarily relaxed to €500,000, meaning larger businesses who may have otherwise found their limits already reached for relief during the year 2019/20 will now be able to benefit further.

The Chancellor has committed to doing “whatever it takes” and so these measures, whilst largely welcomed, are short term fixes only and need to be continuously reviewed and updated to include other sectors as it becomes evident.

As Ryden recently reported, due to recent changes enacted in the NDR (Scotland) Bill, due to come into effect on 1st April 2020, the ability to appeal on the grounds of a Material Change in Circumstances (MCC) due to economic factors has been removed. This means that all businesses affected by the coronavirus must appeal before the deadline of 31st March 2020 for this argument to be considered this financial year. These truly are exceptional and unprecedented situations we face today and to remove scope to appeal on those grounds will ultimately prove fatal to many ratepayers. Ryden will continue to lobby for a U-turn in this area and we would urge the Scottish Government to listen to the business community and acknowledge how detrimental this could be to their survival.

Ryden is working hard to ensure all our client’s interests are protected and we will be submitting MCC appeals for all those affected by this crisis within the statutory deadlines. We are also on hand to answer any questions during these challenging times. 

The situation is evolving daily and we will endeavour to keep you up to date at all times. Do not hesitate to contact our Rating team to discuss any of these matters in more depth.

Lynsey Russell

Lynsey has over 16 years experience in the valuation of subjects for non-domestic rating within both the public and private sector.  She has valued a wide variety of subjects including retail, office, industrial, licensed and leisure, schools, colleges and universities and all other public buildings, negotiating appeals and giving evidence as an expert witness at various Valuation Appeal Committee hearings.

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