Business Rates Budget Predictions
Retail Rate Relief extended and long term reform delayed.
Monday evening was a momentous occasion as the Prime Minister set out his roadmap for taking the country out of lockdown no earlier than 21 June, which one hopes will mark the beginning of a recovery. This desired milestone will have a bearing on what the Chancellor of the Exchequer has in store in his Budget next Wednesday.
Retail and hospitality sectors were the only recipients of immediate relief from business rates during the pandemic. 100% Retail Rate Relief (RRR), worth £10bn, was granted on 1 April 2020 for these occupiers. We predict this relief will be extended for at least a further three months from 1 April 2021.
This prediction looks likely when considering Scottish Government has already made their announcement to extent RRR.
We also predict that the criteria for RRR will be more tightly drawn and may even be application based. The current arrangements permit a broad range of retail uses to qualify. Some question whether it is right that businesses that remained open during lockdown should qualify for the relief, particularly given that some supermarkets, retailers and trade counter occupiers repaid the relief.
COVID-19 has delayed the Government’s fundamental review into business rates that followed the 2019 parliamentary inquiry. The review has been held in abeyance until the autumn, as has the wider reform of taxation, including suggested carbon and online sales taxes.
The beginning of change seems certain, but not until some months after the country is ‘unlocked’.