Although the detail is in the small print.
As we predicted last week the Retail Rate Relief scheme has been extended in today’s budget, although as expected the amount of relief is to be reduced and the criteria will be more tightly drawn.
The current 2020/21 scheme provides retail, leisure and hospitality businesses with 100% relief from occupied business rates, worth £10bn. The scheme that comes into place on 1 April 2021 extends the 100% relief until 30 June 2021. Thereafter, the relief will be reduced to 66% from 1 July 2021 to 31 March 2022, subject to caps. For businesses that were required to be closed on 5 January 2021 the cap is £2m relief per business. For businesses that were not required to be closed on this date, the cap is £105,000 relief per business.
Relevant to those national chains that have remained open during the pandemic and who either declined or refunded the relief, legislation is to be made so that their business rates payments are deductible for Corporation Tax purposes. This will ensure that the payments made are not treated as a “gift”, ensuring that a business is no worse off from a tax perspective than if it had paid the rates in the first place.
The other notable budget pledge is the renewal of the Airports and Ground Operations Support Scheme for a further six months from 1 April 2021. Eligible businesses in England will receive full relief from business rates for six months subject to a £4m cap per business.
The Chancellor also announced that he intends to introduce “Tax Sites” within some Freeports that would give a range of tax benefits, including five years rates relief for new businesses or certain expanding businesses in the tax sites.
