Coronavirus: Devolved business rates and grants across the UK
Each country within the United Kingdom has been responsible for developing their own approach to business support in the coronavirus crisis as far as their powers allow them to by amending business rates and providing grants.
Each regional government has published details of the different business rate reliefs and targeted business grants that are on offer in their own jurisdiction. This article presents an overview of the different regimes in force.
The Scottish government’s latest update to business rate relief on 2 April 2020, confirms the following are available:
- 100% full year relief for businesses in the retail, hospitality, leisure and aviation sectors.
- 1.6% rates relief available to all non-domestic properties.
- Business rate relief discounts may apply to properties that:
- have a small rateable value
- in a rural area
- used for charity or religious purposes
- has been recently empty.
Businesses are not required to apply for the business rate relief or discounts as these will be automatically applied by councils. Those businesses that are required to pay rates for 2020-21 but are struggling should contact their local council to discuss payment options.
Businesses in Scotland can also able to apply for grants under a scheme which will be open until 31 March 2021. These grants will provide:
- £25,000 for businesses in retail, hospitality, and leisure if their premises have a rateable value of between £18,001 and £51,000
- £10,000 for all businesses across any sector, provided that the business also qualifies for:
- Small business bonus scheme relief
- Rural relief
- Nursery relief
- Business growth accelerator relief
- Disabled relief or
- Fresh start.
Self-catering accommodation and caravans can also benefit from a grant if they are the primary source of income for the ratepayer (1/3 or more) and were let for 140 days or more in 2019-20.
The latest update from the Northern Ireland government confirms what business rates reliefs and grants are available to businesses. The regional rate for 2020-21 will be set at the end of April 2020. The Finance Minister for Northern Ireland has announced that there will be a reduction in business rates of 12.5% for all businesses.
Any business rate relief or discount will be automatically applied to bills by the council and so an application is not necessary. The only exception is the hardship relief which requires an application. The rates relief consists of:
- No rates will be charged to any business (excluding public sector and utilities) for the months of May, June and July 2020, this will automatically reduce bills by 25%.
- Rate bills will not be issued until June 2020. Ratepayers will be able to choose to pay their bills in monthly instalments.
- A hardship relief has been made available by application for any business suffering from the temporary crisis.
- Other existing rates reliefs include:
- 100% rates relief for charitable bodies.
- 80% rates relief for sport and recreation bodies.
- 70% rates relief for industrial derating.
- 50% rates relief for vacant non-domestic properties.
Grants will need to be applied for by businesses.
- £25,000 for business in retail, hospitality and tourism if their premises have a rateable value of between £15,001 and £51,000.
- £10,000 for businesses that are currently in receipt of small business rate relief, subject to some exclusions and conditions, including having a rateable value of less than £15,000.
The Welsh government last updated the details on business rate relief and grants on 30 March 2020.
Business rate relief or discount will be automatically applied to bills by local councils.
- 100% full year relief for retail, hospitality, leisure and other small businesses, with a rateable value of £500,000 or less.
Businesses need to apply for the following grants:
- £25,000 for businesses in retail, hospitality and leisure if their premises have a rateable value of between £12,001 and £51,000.
- £10,000 for all businesses with a rateable value of £12,000 or less.
- £100,000 for all businesses who employ between 10 and 249 people.
- £10,000 for all small businesses who employ up to 9 people.
How to benefit from the grants available
Applications for grants across the UK are now open. Businesses should review whether they meet the conditions, which are detailed on each regional government site.
The governments across the UK are constantly releasing updates or new guidance and so this article will be updated with further changes.
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Reshma Johar is a Tax Consultant at Carter Backer Winter. She is both ATT and CTA qualified with experience gained from practice and her involvement with the CIOT. She has a particular interest in OMB and private client taxes.