The Government have now released a detailed list of all the businesses which are subject to the enforced closure which came into force on 23rd March. This was made possible by the Secretary of State exercising his designated powers to enable the police and local authorities to act. To support some of these businesses, the Government have now extended the business rates exemption & grant availability scheme announced last week and details of the scheme can be found here.

Although the measures will assist many businesses, the Government is restricted to the EU State Aid Rules which mean the maximum tax relief that can be given to any single business is set at 800,000 euros. However, the EU Commission are also allowing additional measures under their Temporary Framework which include state subsidised loans to companies.  

At the moment, the Government have applied to the EU for an exemption to State Aid limits and told Councils to proceed on the assumption that they will be successful in their application. However, large businesses would do well to work on the assumption that it will not succeed for budgetary purposes.

Government’s Current Proposals

Business Rates Exemptions - All qualifying Retail, Hospitality and Leisure businesses in England will obtain a 12 month business rates exemption. There is no Rateable Value threshold.

The Government guidance to Councils on the scheme can be found here. It is important to review this guide as there are certain types of businesses in these sectors which will not qualify. The Government have amended the list this afternoon to now allow Estate Agents, Letting Agents and Bingo Halls to also qualify. However, non-qualifying businesses include Medical (Dentists & Doctors Surgeries, Veterinary Practices, Chiropractors & Osteopaths), Financial Services (Banks, Building Societies, Cash Points, Bureau de Change), Professional Service (Solicitors, Accountants, Insurance and Financial Advisers) along with Post Office sorting offices.

To clarify, all qualifying businesses that are temporary CLOSED as a result of the COVID-19 will be treated as occupied for this relief. This is welcome news as it allows businesses to keep their stock on site whilst empty.

Grants - Businesses in England who qualify for Small Business Rates Relief (SBBR) will be eligible for a grant of £10,000. The criteria for qualifying for SBRR can be found here.

Further Grants - for Retail, Hospitality and Leisure businesses with a Rateable Value between £15,000 and below £51,000 will be eligible for grants of £25,000 per property. More details can be found here.

Further information - on all Government support including the protection from eviction for commercial tenants can be accessed here.

For all businesses affected by the forced closures who don’t qualify for support or for those with restrictions on their staff travelling to and from work unless it is essential, there are a number of measures to consider to mitigate business rates.

a) Partial Empty Rate Relief – Local Authorities have the discretion to grant partial rates exemption on any non-domestic assessment where the area involved is only temporarily vacant. However, all business files need to be removed from the area.

b) Empty Rates Relief – When a property becomes vacant it is entitled to mandatory relief from rates, Commercial & Retail (three months) and Industrial (six months). To qualify all business files have to be removed from site.

c) Intermittent Occupation – If the property is likely to remain vacant after the expiration of the exemption periods then full rates would be payable. However, by establishing intermittent occupation this can reset the exemption. For more details on this specialist area please contact us.

d) Covid-19 Reductions – The rating legislation enables businesses to make a claim for a reduction in their business rates where there has been a ‘material change to the locality’. This is a complex area of the legislation as there is no detailed definition of what constitutes a qualifying material change and we have to rely on evolving case-law precedents. However, the previous Foot & Mouth outbreak was accepted as a material change and as this situation increases it is likely that the impact of Covid-19 will be sufficiently observable within the locality to also succeed. It is important to note that the timing of the claim cannot be retrospective so we would recommend getting in touch now so we can prepare your case.

e) Prohibited from Occupying Premises – We consider that the enforced closure of business through the exercise of The Health Protection (Coronavirus) Regulations 2020 is sufficient to make an application to Councils for business rates exemption during this period. The Unoccupied Property Regulations provide for such an exemption but Councils may seek to resist the claim if there are any files left on the premises. We consider that this can possibly be countered by the fact that the files cannot be beneficially used by the business and therefore would not constitute occupation. Please get in touch for further information on this.

f) 2017 Rating List – The Government are now consulting on the closure of the right to challenge your current business rates assessment. At present this is likely to be in just over 12 months and if you haven’t already had a Professional review your assessment we would urge you to take action.

g) 2021 Rating List – The Valuation Office Agency are currently revaluing all rating assessments for a new rating list which comes into force on 1st April next year. The draft valuations will be available later in the year and it is important that businesses seek advice on the likely impact this will have to their budget.

For further advice, please contact us.