Last week, in the Spring Budget, the Chancellor announced a 3-month extension of business rates relief. But did he go far enough?
Our Business Rates Partner Martin Davenport offers his verdict and was published as an expert voice across the retail press, including in Boutique Magazine and Retail Destination.
“A mere 3-month extension to the business rates holiday was slightly surprising, as I would have liked to see this extended at least an additional 6 months. However, the added allowance of 66% from the 1st July will no doubt help the retail and leisure sectors immensely.
“In a sure sign of support for small and medium retailers, the Chancellor announced a £2 million cap for businesses that had to close on the 5th January. Whereas, the more marginal cap of £105,000 for properties that have been able to remain open in the third national lockdown, will go some way in plugging the hole that has allowed supermarkets to benefit from the relief.
“Sunak’s speech also skirted around the swathes of businesses that will not benefit from the 3-month extension. Offices, where occupation has been hugely restricted for nearly a year already, continue to be excluded from any form of rates relief. Additionally, medical use buildings continue to be left out. Finally, properties that have been empty don’t get any retail relief – why is this?
“Of course, this £6 billion tax cut and additional £5 billion grants package is welcomed. But it took too long. Sunak should have announced this in January when we entered the third national lockdown, giving businesses and landlords critical time to budget. Since then, many have gone under as they were unable to plan.
“This relief extension only tells a fraction of the story: the business rates system is crippling the high street. 4 critical changes are required.
“The system must be more flexible and allow retailers to easily adjust rates to set up innovative mixed-use businesses – think in-store hair salons or champagne bars that will prove crucial in incentivising consumers to return. The current process – Check Challenge Appeal (CCA) – is time-consuming at best and impossible at worst.
“Secondly, the UK’s extortionately high Uniform Business Rates (UBR), which is currently 50p in every £1 and much higher than anywhere else in the world, must be brought down to about 30p.
“Thirdly, downward transition, which is crippling businesses in the North and the Midlands, must be abolished, so the system better reflects falling rents.
“Finally, empty rates relief, whereby landlords pay no rates when a property isn’t occupied, must be extended from 3 months to 6 months. Who is finding a new tenant in just 12 weeks at the moment?!
“If the Government doesn’t haul the business rates system into the 21st century, it risks undoing all the good work of its costly Covid support packages.”
Some of these comments were published by Boutique Magazine see here and Retail Destination here. You can find the former on LinkedIn @Boutique magazine and Twitter @Boutiquemag and the latter on Twitter @RD_newsfeed.