Business rates relief and grants: Get the details right
In response to the coronavirus crisis, the Chancellor announced a year-long business rates holiday for 2020-21 on Budget day (11 March). Since then accountants have been trying to find out how how claimants can get their hands on the small business grants the Chancellor added to his coronavirus package.
UPDATE, 6 May – In further concessions this week, the BEIS rolled out an extra £617m in discretionary funds to help businesses operating out of shared workplaces, market stalls and charity shops, along with B&Bs not paying business rates and any other deserving firm decided by the council. Revaluations have also been postponed for the whole of 2021.
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The original Budget concession was extended to retail, leisure and hospitality businesses with rateable values below £51000. But like many other government responses to the coronavirus, business rates support mechanisms have been extended since the Chancellor’s original Budget announcement. Rates relief for 2020-21 is now available to the following sectors:
- Retail shops including: opticians, petrol stations, garden centres, beauty salons, travel agents, funeral directors and so on
- Hospitality premises including restaurants, cafes, takeaways, pubs and live music venues
- Leisure facilities such as cinemas, hotels and B&Bs, self-catering accommodation, theatres, museums, art galleries, historic houses, gyms, casinos and sports clubs
- Children’s nurseries
- Estate agents, lettings agencies and bingo halls that closed as a result of Covid-19.
Targeted grant support schemes
The 12-month business rates holiday didn’t apply to businesses that did not pay rates, so this was supplemented by several additional grant schemes for specific sectors:
- Small Business Grant Fund (SBGF) – £10,000 available to those eligible for the small business rate relief scheme or rural rate relief scheme– essentially firms occupying properties with a rateable value of less than £15,000.
- Retail, Hospitality and Leisure Grant (RHLG) – Retail, hospitality and leisure businesses with a rateable value of up to £15,000 will get a grant of £10,000, while those with property valuations between £15,000 and £51,000 will be eligible for £25,000. This grant is available for businesses of the following types
- restaurants, cafés, bars or pubs
- cinemas and live venues
- leisure properties such as sports clubs, gyms and spas
- hospitality premises such as hotels, guest houses or self-catering accommodation.
- Discretionary top-up grants. These can be given to any deserving business, but were specifically tailored to reach the following types of previously overlooked firm:
- businesses operating form shared workspace offices
- regular market stall traders
- small charities
- B&Bs that pay council tax rather than business rates.
Grant conditions and restrictions
Some of the key conditions that apply to all these schemes include:
- Effective from 11 March 2020. Businesses that were dissolved before that date will not be eligible
- Only available for companies in England; Scotland and Wales have their own versions
- Eligible recipients will receive one grant per property
- Businesses such as pubs and leisure facilities that were eligible for the Expanded Retail Discount Scheme announced in January are also eligible for small business grants.
- Charities that would otherwise meet the criteria but whose bills were reduced by local decisions can still be considered for the RHL grant.
- Premises occupied for personal uses will be excluded, along with car parks and parking spaces
- Changes made to the business’s rateable value or rating assessment after 11 March 2020 will be not be used to determine eligibility
- Local authorities can choose to withhold or award grants where they feel their valuations for a property were inaccurate on 11 March 2020. “This is entirely at the discretion of the local authority and only intended to prevent manifest errors,” BEIS advised
- Councils will notify all eligible businesses about the grants. If you wish to refuse the funding, you will need to complete a form to confirm this.
Under the new legislation, local authorities in England have been empowered by the government to dispense a range of business grants to under the following schemes:
Devolved regimes for Scotland and Wales
These concessions announced by the Treasury apply to England only. The Scottish, Welsh governments have their own guidance on how the grant award schemes will operate within their jurisdictions.
The Scottish guidance differs from England in the following ways:
- The threshold for £25,000 grants for small business is £18,000 rather than £15,000.
- All non-domestic properties in Scotland will get 1.6% rates relief, applied automatically.
- Retail, hospitality and leisure businesses will get 100% rates relief, as in England, also applied automatically.
Guidance from the Welsh government sets the threshold for the £25,000 grant payment for retail, leisure and hospitality businesses is £12,001 – lower than in England or Scotland. Businesses in Wales can also access loan and equity funding via the Development Bank of Wales.
The grant conditions and criteria in Scotland, Wales and Northern Ireland are detailed by Reshma Johar in a separate article.
State aid complications
In early April, the government updated its guidance to applicants with an explanation of what they will need to do to ensure they remain compliant with Europe’s State Aid rules.
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