Business Rates & The Budget
Business rates retail discount
The Government has already announced that, for one year from 1 April 2020, the business rates retail discount for properties with a Rateable Value below £51,000 in England will increase from one third to 50%, and will be expanded to include cinemas and music venues. To support small businesses in response to COVID-19, the retail discount will be increased to 100% and expanded to include hospitality and leisure businesses for 2021.
Business rates pubs discount
The Government previously committed to introducing a £1,000 business rates discount for pubs with a Rateable Value below £100,000 in England for one year from 1 April 2020. To further support pubs, in response to COVID-19, the discount for pubs will be increased to £5,000.
Business rates local newspaper office space discount
The £1,500 business rates discount for office space used by local newspapers in England will be extended for an additional five years until 31 March 2025.
Business rates public lavatories relief
The Government will bring forward legislation as soon as possible in this session to provide mandatory 100% business rates relief for standalone public lavatories in England from April 2020.
Local authorities will be fully compensated for the loss of income as a result of these business rates measures.
Business rates review
The Government is launching a fundamental review of business rates to report in the autumn. The Terms of Reference for this review are published alongside this Budget and a call for evidence will be published in the spring.
Valuation Office Agency (VOA) business systems transformation programme
The Government will invest an additional £11.5 million in the VOA in 2020-21 to support the modernisation of VOA systems and processes, to increase efficiency and improve customer service in the future.
Altus Group comment
Alex Probyn, UK President of Expert Services at Altus Group, whilst welcoming the measures says that the major employers across all sectors of the economy have been overlooked adding “whilst the exemption for a year is excellent news for our small independent retail, leisure and hospitality businesses, delivering badly needed respite, sadly, they appear to overlook the plight of big business. Through a combination of qualifying criteria and EU State Aid rules, effectively, we are excluding the larger employers and the huge number of employees that rely upon them.”
In terms of the fundamental review, Probyn says that there has already been 155 policy papers and consultations on business rates since 2010 including previous major reviews by HM Treasury and the Department of Housing, Communities and Local Government within the last 5 years adding “the difficult questions have already been asked. Reform of the system is within our grasp with Political will. If we are serious about ‘levelling’ the economy to help struggling towns, tax demands must fall in line with declining rents whilst respite to the financial burden can be delivered through the ending of annual inflationary rises to the tax rate using growth instead to drive revenues. We have to incentivise, rather than penalise, those businesses investing in sustainability to lower energy consumption and emissions from their buildings whilst meritorious appeals must be resolved far quicker.”