The Budget & business rates explained
Despite the chatter last week about scrapping downwards transition, it’s not in there which is very disappointing because that would do much to restore faith in the system.
The 50% relief for properties with a rateable value below £51,000 meeting the qualification criteria has been increased. Today it has been announced that this will be increased to 100% relief for 2020/2021. In addition to the increase in percentage, the types of properties which are eligible will also be expanded to include hospitality and leisure businesses for example hotels and cinemas. This is only a temporary measure and perhaps linked to Covid 19 rather than any change in business rates philosophy.
The existing £1,000 relief for pubs with a rateable value below £100,000 is to be increased to £5,000 for 2020/2021. Again a temporary measure.
It is important to note that both these reliefs will likely remain discretionary and require an application to be submitted to the relevant local billing authority ensuring state aid limits are adhered to. Although the UK is no longer part of the EU, the transition period does not expire until 1st January 2021 (provisional date) at which point new rules may come into play. Then the Competition and Markets Authority (CMA) become responsible for monitoring aid which affects trade between the UK and the EU.
Local Newspaper Office Space Discount
The £1,500 business rates relief for office space used by local newspapers in England will be extended for an additional five years to 31st March 2025.
Public Lavatories Relief
The government has pledged to bring forward legislation as soon as possible to allow for 100% mandatory relief on standalone public lavatories from April 2020.
Other announcements include the extension of the 100% business rates retention scheme pilots in areas including Greater Manchester & Liverpool. London will also see 67% retention in 2020-21 in line with the Greater London Authority funding agreement made in 2017-18. This could be considered a clear indication that any fundamental changes to business rates may be some way off despite today’s confirmation of a fundamental business rates review to be held in Autumn. Indeed the terms of reference published today alongside the budget announcement state that fundamental changes to the business rates system are to be considered in the medium to long term with consultation to begin in the Spring; kicked into the long grass…?
It is clear that business rates, being the stable tax it is contributing £32 billion a year, is not in line for any immediate drastic government reforms.
The budget speech can be found via the following link:
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