The business rate details behind the budget headlines


Hot on the heels of Wednesday’s budget, the government last night published the Local Authority guidance which clarifies the details of how the relief scheme will operate.

The initial three month extension should apply to all businesses that are existing recipients of Expanded Retail Discount. So if you received ERD in 2020/21 then it should also apply for the first three months of the new rate year (1 April 2021 to 30 June 2021). There will be no cap to this amount. Councils have been provided with template letters which give ratepayers the opportunity to return the relief if they so wish and several high profile retailers have promised to return circa £2bn in recent months.

The eligibility criteria are almost identical to last year but councils have some latitude to make their own decisions about how the relief should be administered. As a result we expect that some councils will automatically award the relief to 2021/22 bills. Other councils wont, so its incredibly important to check when you receive rates bills.

From 1 July 2021 the position changes. If your business was forced to close on 5 January 2021 as a result of lockdown measures then relief continues at  a discount of 66% of your rates liability up to a £2m cap.

If your business wasn’t required to close then the relief will be capped at £105,000 per business.

Once again these measures only apply to occupied properties and those legally required to close. There is still no relief for owners of vacant Retail Leisure & Hospitality properties.

The measures announced in England are less than those  in Scotland and Wales where a full 12 months relief has been confirmed albeit with some limits in Wales to prevent claims from RV’s over £500k.

As always, if you have any questions then please don’t hesitate to contact us.

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We are a retailer with a specific rates issue relevant to the definition of occupied. We have the 7 year residue of a 10-year lease and were receiving the retail discount in 2019/2020. We had to temporarily stop trade to the public because of failure by the landlord to repair their adjacent premises and because of asbestos contamination and although our premises are still fitted out and with stock on site, the local authority are classing us as vacant (as if we owned the property), have rescinded the retail relief and are levying full rates. Can a tenanted, fitted-out premises be targeted in this way? Is there a definition of vacant?

By Patrick Franks