Wednesday 11th March 2020. The anticipated Spring Budget was announced with great expectations in respect of potential reforms to the business rates system which could provide much added relief to the struggling retail sector, along with the added complications of the ongoing Covid-19 outbreak, and the effects this may have.
Over the last few years the property industry along with national retailers and occupier groups have called for major reforms to the Business Rates system which is considered to be in its present format “not fit for purpose” being a contributing factor in the collapse of large swathes of the retail sector.
Suggestions for this budget have included proposals such as reducing the Business Rates Multiplier, reforming or reviewing the unfair transitional phasing system and a review of the Check Challenge Appeal system which can see appeals take in excess of 30 months to conclude, by which time businesses may have ceased trading.
The main announcement from the Government in the Spring Budget was that relief for retail occupiers with Rateable Values below £51,000 would be increased from 50% to 100% for the last year of the Rating List, and also extending to this to the leisure and hospitality sectors.
Whilst this is a welcome measure and will no doubt assist struggling businesses up and down the country, this still does not address the flawed Rating Appeals system, does not address the issue of transitional phasing which impacts on the level of rates occupiers pay and does not address the main problem the high street is experiencing whereby a number of national occupiers would not fall into this bracket of relief. “Papering over the cracks” is a phrase that comes to mind.
Whilst this particular inclusion was the main takeaway from the Budget the following were also introduced:
- Business rates pubs discount – The current discount of £1,000 to Public Houses with Rateable Value below £100,000 will be increased to £5,000 from 1st April 2020.
- Business rates local newspaper office space discount – The £1,500 discount applied for office space occupied by Local Newspapers will be extended to 31st March 2025. This is applied by the Local Authority and limited to one relief per newspaper title.
- Review of Business Rates – Another review has been proposed and will be announced in the Autumn Statement. Whether the major reform that is required is introduced is anyone’s guess.
- Investment in Valuation Office Agency – The Government intends to invest an additional £11.5million into the VOA which will hopefully approve efficiency.
It is a welcome addition that the Government intend to undertake a consultation into major reform of the business rates system however this has been mentioned previously in several budgets with very little action or change yet to be implemented.
Until the autumn budget we wait with baited breath for the outcome of the consultation and in the meantime occupiers up and down the country are in a no better position than before 12.30pm on the 11th March 2020.
Here at Roger Hannah Ltd we understand the implications of excessive Business Rates and the financial burden and strain this can place on occupiers. We have vast experience in providing Business Rates advice to a variety of occupiers up and down the country and whilst the budget will provide relief for certain occupiers, we are on hand to assist and guide when required.
If you own or occupy a property and you feel you may be paying too much on your business rates, or unsure whether your rateable value is correct, contact our specialist Business Rates team for a free initial consultation.