The Government is making an extra £1.5bn in business rates relief available to firms that weren’t eligible before – including offices and wholesalers.
Existing business rates relief is available to those in retail, leisure and hospitality.
The Federation of Small Businesses (FSB) welcomed the move. “Many of those businesses such as wholesalers, suppliers and brewers have been hit hard by the pandemic but haven’t been able to access the same levels of support,” said its national chair, Mike Cherry.
However, business rates relief appeals made due to Covid-19 are now banned as well. These appeals were expected to cost up to £5bn, so the Government has saved itself £3.5bn, according to figures from the Rating Surveyors’ Association.
The Government said that allowing rates appeals on material change of circumstances could have led to ‘significant amounts of taxpayer support going to businesses who have been able to operate normally throughout the pandemic’. It added this could disproportionately benefit firms in London.
‘It is the wrong thing to do on every level’
Experts describe the move as ‘outrageous’, writing off the hundreds of thousands of business owners who have already pursued an appeal. Figures from the Government’s Valuation Office Agency state that 303,260 properties, including offices, pubs and retailers, lodged appeals in 2020 – that’s more than three times the number lodged in 2019.
Robert Hayton, UK president of property tax at Altus Group, said: “This is outrageous. The material change of circumstance has been a part of rating law for decades and something like a global pandemic is exactly what it is there for.
“You shouldn’t legislate against it just because it will cost you too much money.”
He said that from July sectors like retail and hospitality would have to pay rates based on their 2015 rental valuations until April 2023 when a revaluation is due. Covid won’t be reflected in bills until then.
John Webber, head of business rates at Colliers, shared a similar sentiment.
“The Government is ripping out the rule book retrospectively. It is the wrong thing to do on every level.
“The Government’s Valuation Office Agency (VOA) spent the last part of last year negotiating with the agents of rate payers on the impact of Covid-19 and its effects on businesses, following the Government’s working from home and social distancing policies and agreed these constituted a material change of circumstance (MCC) by which businesses would be able to claim a rebate on their rates bills.
“To now deny this is a MCC retrospectively, because the numbers are too high is deeply shocking.”