Spending Review doesn’t address business rate emergency
There wasn’t much pre-Christmas cheer on the business rates front from the Chancellor’s Spending Review yesterday, unless you count the miniscule concession that there will be a freeze of the business rates multiplier in 2021-22.
But the government is considering options for further Covid-19 related support through business rates reliefs. It will outline plans for 2021-22 reliefs in the New Year. The government will provide an estimated £762 million to compensate local authorities for 75 per cent of lost council tax and business rates revenues in 2020-21 that would otherwise need to be funded through local authority budgets in 2021-22 and later years.
The government’s review of the business rates system is ongoing and they say will result in a final report to be published in spring 2021… let’s see if that does finally arrive.
The airport sector was given a bit of a lifeline earlier this week with some support announced for 2021/22 but there are plenty of other sectors that feel left out in the cold. We will all certainly “be in this together” to parrot Osborne’s famous phrase if, next April, the current business rates holiday does come to an abrupt end, this will be a sucker punch for many amid the dire forecasts that keep coming out of the retail and hospitality sectors.
And finally, some good news for the Valuation Office Agency with £22m announced to modernise its IT systems, enabling the agency to become more flexible, efficient and resilient, and £31 million to support the 2023 revaluation.
Almost more importantly a lot will be resting on the revised tier systems due out today to see how many businesses will be able to open partially or fully for December. This is a time when many retailers and hospitality venues rake in a big percentage of their annual profits to tide them over the traditionally leaner months in January and February. Without those few weeks of hopeful frantic spend many may just call it a day sooner rather than later.
A Tory MP is calling for business rates to be scrapped and replaced by an increase in VAT in order to save high street businesses.
Maximising income and protecting cash flow has never been more important for landlords as the UK battles through the latest stage of the pandemic.
Here is an easy way to check if your business is eligible for further grants to help you through lockdown 3.0.