Coronavirus business rates update, 26 March
The biggest question on AccountingWEB, in this virus-affected spring, concerned how claimants could get their hands on the small business grant introduced by the Chancellor in his coronavirus Budget on 11 March.
UPDATE, 26 March - Further guidance from the Ministry of Housing, Communities and Local Government clarified the criteria for a separate 100% Nursery Discount for business rates announced on 18 March after objections from the industry that it had been left out of the holiday available to retail, hospitality and leisure businesses. Businesses will be entitled to the relief if they occupy premises listed on Ofsted's Early Years Register.
Estate agents, lettings agencies and bingo halls that closed as a result of Covid-19 measures to restrict the spread of the virus will also be exempted from business rates in 2020-21, the Treasury announced on Wednesday.
These concessions announced by the Treasury apply to England only. The Scottish and Welsh governments issued their own guidance this week 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.
[Some details kindly furnished by our colleagues on PracticeWeb]
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The small business grants announced at the time of the Budget were originally set at £3,000 for those entitled to the small business rates relief (SBRR). But less than a week later, on 17 March, the Chancellor announced a business rates holiday for all businesses in England for 2020-21. Alongside which was increased grants for £10,000, plus another £15,000 on top for retail, hospitality and leisure businesses in properties with rateable values between £15,000 and £51,000.
According to AccountingWEB member the_fishmonger the government’s COVID-19 support for business page said on Budget day that funding for the scheme would be provided to local authorities in early April and that “guidance for local authorities on the scheme will be provided shortly”.
A secondhand report from SBA on the small business grant thread suggested that the Budget-day announcement took their local council by surprise and they were waiting for official advice on who was eligible and when the grants would happen.
After 13 days of questioning on how firms could claim the grants, the Department of Business, Energy and Industrial Strategy (BEIS) issued guidance to local authorities on Tuesday explaining the criteria and conditions around the grant schemes.
As the_fishmonger pointed out, all that needs to happen now is for local authorities to set up administration systems with the relevant data fields to satisfy BEIS oversight requirements and contact eligible businesses…
Meet the acronyms
The 12-page grant funding schemes PDF introduces two new acronym-heavy schemes empowering local authorities to dispense grants to businesses under the following criteria:
- 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) – enhanced grant created for businesses that qualified for the Expanded Retail Discount announced all the way back in late January. 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.
Some of the key conditions affecting both schemes include:
- Effective from 11 March 2020. Businesses that were dissolved before that date will not be eligible
- Only available for companies in England
- Premises occupied for personal uses will be excluded, along with car parks and parking spaces
- 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,” the BEIS advised.
Nor will the small business grants be available for home-workers who do not pay business rates. AccountingWEB understands that Chancellor Rishi Sunak may introduce new measures to support the self-employed later this week.
As has been mentioned frequently on AccountingWEB and elsewhere, there’s a big difference between making a headline-grabbing business support announcement and actually delivering it.
With its frequent references to hereditaments and acronyms upon acronyms defining the different eligibility crisis, the BEIS instructions wouldn’t pass a plain English test. In the heat of the crisis, the department’s civil servants may be falling back into old habits, particularly with an eye on preventing fraudulent claims. Perhaps we need to allow them some leeway in this instance, but support measures need to be as simple and easy to implement as possible if they’re going to be effective.
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