COVID-19 – Business Rates Retail Discount Scheme

It was announced in the Chancellor’s March Budget that there would be an extension to the retail discount scheme in order to help businesses who are struggling due to COVID-19.

Since the budget the Chancellor has removed the rateable value requirement meaning this relief is available to all qualifying retail, hospitality and leisure businesses.  This will mean that around 900,000 properties will be eligible for 100% business rates relief (Budget 2020).

How it works?

From 1 April 2020 qualifying businesses in retail, hospitality and leisure will pay no business rates for 12 months. There is no rateable value limit on this relief.

This scheme will be administered by local councils and they will be in touch with all qualifying businesses in coming months. If you have any questions on this you should contact your local council.

The total amount of government-funded relief available for each property for 2020/21 under this scheme is 100% of the business rates bill, after mandatory reliefs.

The relief is provided by the council, after the reduction of your business rates for other discretionary reliefs such as existing reliefs which apply to Charities and Community Amateur Sports Clubs. This means that organisations which already benefit from some business rates relief, but which still pay rates after the discretionary reliefs (eg for CASCs it is an 80% relief) will be able to use the relief to reduce their rates bill to £nil.    

This means your local council will send you your usual business rates bill including any applicable normal discounts however; you will (or you should!) see that the amount due will be reduced to nil payable under the retail discount scheme.

Example 1

Occupied shop with rateable value of £13,500 eligible for Small Business Rate Relief

Gross Rates (before any reliefs) £6,737
Net Rates after SBRR (50%) (£3,368)
Expanded Retail discount (100%) (£3,368)
Rates Due £0.00

Example 2

Occupied shop with rateable value of £100,000

Gross Rates (before any reliefs) £51,200
Expanded Retail discount (100%) (£51,200)
Rates Due £0.00

Example 3

Occupied Charity Shop with rateable value of £40,000 eligible for Charity Relief

Gross Rates (before any reliefs) £20,480
Net Rates after Charity Relief (£4,096)
Expanded Retail discount (100%) (£4,09)
Rates Due £0.00

Which businesses can benefit?

The relief is for properties that are wholly or mainly used:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues;
  • for assembly and leisure; or
  • as hotels, guest & boarding premises and self-catering accommodation.

The government have confirmed that the following sample of businesses do qualify (please note there will be other businesses that fit into the retail, hospitality and leisure categories:

Sale of goods to the public Services to the public Food and/or Drink Other Non domestic
Shops such as bakers, supermarkets, off licences, florists Hair and Beauty
services
Takeaways Live Music venue Hotels, Guest and
boarding houses
Charity Shops Travel agents Sandwich
shops
Sports Grounds and leisure activities clubs (eg football clubs,
cricket clubs, golf clubs etc)
Holiday homes
Opticians Ticket offices Coffee shops Museums and art galleries Caravan Parks and Sites
Post Offices (Not sorting offices) Laundrettes Pubs/Bars Historichouses/ stately homes  
Furnishing shops/display rooms/ show
rooms
Funeral directors   Theatres  
Markets Hire services eg
car or tool
  Gyms  
      Clubhouses  

Public Houses

In addition the government has extended the Business Rates discount for pubs with a rateable value below £100,000 in England to £5,000 from 1 April 2020.

Which businesses do not qualify?

There are a number of business which do not qualify for the expanded retail discount scheme.  A number of confirmed sectors are;

Professional and/or financial services, estate and lettings agents, employment agencies, medical or animal services and gambling institutions.

Contact us

If you would like additional detail of how the Business Rates Retail Discount scheme may assist your business, please contact us at: advice@taitwalker.co.uk