The Chancellor has today announced large cuts in business rates for some sectors of the commercial property market for the 2020/21 financial year, as part of a package of Budget measures aimed at countering the disruption to the economy caused by the Covid-19 Virus.
It was widely expected that the current retail relief would be increased to 50% for next year but the Government has gone further and introduced a one year 100% relief. As a result, the occupier of any retail premises with a rateable value of £51,000 or less will pay no rates from April 2020.
The relief has also been extended to include leisure properties that were not previously eligible for the relief. It will now apply to properties such as museums, art galleries, theatres, caravan parks, gyms, small hotels, B&Bs, sports clubs, night clubs, club houses and guest houses below the rateable value threshold. This will provide a welcome short-term boost to the bottom lines of eligible businesses in these sectors given recent reports of difficult trading conditions.
Public houses that are not included within the retail scheme have had their relief increased from £1,000 to £5,000 for next year.
The intention is for the relief to be granted automatically by councils as widely as possible. However, it is likely that some occupiers, particularly within the newly included leisure sector, will need to apply.
Within his statement the Chancellor also announced a review into the long-term future of business rates later this year. It remains to be seen whether this review will actually take place or be as wide ranging as experts and industry have been demanding for some time. Similar past promises have produced only limited changes.
Chris Sexton says “This is a positive action for many struggling parts of the commercial property market. Much of this was already agreed to be put in place however and there are some areas that aren’t eligible for this form of relief who need as much help. In the main though we must look at the positives which will see almost 50% of commercial property in England paying no rates next year”.
