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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.

6th May 2020
Editor in Chief (interim) AccountingWEB
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Business rates

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
    - shops
    - 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.

Replies (64)

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By David Waugh
02nd Apr 2020 14:17

Can you confirm or not if the various government grants ( small business grant £10k, and the Job Retention scheme monies in particular) will be subject to Corporation tax or are they tax free ?

Thanks (0)
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By David Waugh
02nd Apr 2020 14:17

Can you confirm or not if the various government grants ( small business grant £10k, and the Job Retention scheme monies in particular) will be subject to Corporation tax or are they tax free ?

Thanks (0)
avatar
By David Waugh
02nd Apr 2020 14:17

Can you confirm or not if the various government grants ( small business grant £10k, and the Job Retention scheme monies in particular) will be subject to Corporation tax or are they tax free ?

Thanks (0)
avatar
By David Waugh
02nd Apr 2020 14:17

Can you confirm or not if the various government grants ( small business grant £10k, and the Job Retention scheme monies in particular) will be subject to Corporation tax or are they tax free ?

Thanks (0)
avatar
By David Waugh
02nd Apr 2020 14:17

Can you confirm or not if the various government grants ( small business grant £10k, and the Job Retention scheme monies in particular) will be subject to Corporation tax or are they tax free ?

Thanks (0)
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By VariegatedRedIvory
15th Apr 2020 19:10

Hi
I am in receipt of the £10,000 small business rate relief grant. I understand this is taxable but I am wondering if this would have to be regarded as turnover for the purpose of VAT threshold? I am not currently VAT registered although in the last year I was getting fairly near to the threshold.
My turnover will now undoubtedly drop but would like to know if the grant would be something that could push me near to VAT threshold again.
Thank you

Thanks (0)
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By KATHERINE MELKERTS
22nd Apr 2020 12:45

I am a solicitor and am concerned that solicitors and accountants are showing as excluded on the Business Rates Expanded Retail Discount Guidance 2020/21 dated 2 April. Does anyone know if this applies to the Small Business Grant Fund please?

Thanks (0)
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By ladyj2001
22nd Apr 2020 21:44

There seems to be quite a lot of grey area around the grants. I run a tuition business (D1 Education) with two high-street locations (in shops) in two different boroughs.

I have been told by one local authority that I am eligible for the small business grant only. I get a discount on the rates at this property because the valuation is low enough.

The second property, however, I have been told by the local authority in which it resides say I am not eligible for either of the grants because the business doesn’t meet the criteria. I am baffled.

I’ve asked the second local authority to explain exactly what makes the business illegible but to no avail!

Very confused.com!

Thanks (0)
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By Varsha64
23rd Apr 2020 10:10

Hi what are the conditions for the grant, if you do receive the grant of £10,000 , my client is aksing can you open your hardware shop for a few hours a day with one to one customer appointment or is that not allowed.
Would appreciate your thoughts.

Thanks (0)
Replying to Varsha64:
Helen Froggett Thomson
By Helen Froggett-Thomson
01st May 2020 14:55

I believe Hardware stores did not have to close, so they would be able to operate at the hours to suit themselves

Thanks (0)
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By Varsha64
23rd Apr 2020 10:07

Hi what are the conditions for the grant, if you do receive the grant of £10,000 , my client is asking can you open your hardware shop for a few hours a day with one to one customer appointment or is that not allowed.
Would appreciate your thoughts.

Thanks (0)
avatar
By Varsha64
23rd Apr 2020 10:07

Hi what are the conditions for the grant, if you do receive the grant of £10,000 , my client is asking can you open your hardware shop for a few hours a day with one to one customer appointment or is that not allowed.
Would appreciate your thoughts.

Thanks (0)
Helen Froggett Thomson
By Helen Froggett-Thomson
01st May 2020 14:37

Hello John, thanks for this article. Had a situation present itself and wondered if you could let me know your thoughts. A client applied for the £10,000 cash grant. They have a rateable value of £15,000. Their property is classed as workshop and premises. They were told by the North Herts District Council that they don't qualify on two fronts. That they had to be under £15,000 and that their classification also does not qualify (workshop and premises).
They do have SBRR. And have sent me a bill to that effect to prove it.
Also I've seen that retail clients are having trouble with the £15,000 figure. You have to be £15,001 to qualify (and less than £50,999) to get the £25,000. And it would seem that exactly £15,000 is not eligible for the £10,000 either!? seems something is wrong here?
Have you had any one else talk about this? thank you :)

Thanks (0)
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By sugar
23rd Jun 2020 12:46

when opticians are included in the rates relief and grant
why are private dental practice not included ?

any reason ?

NHs/private dental practice dont pay rates so that is fine for them but NOT if u r private practice owner

Thanks (0)

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