As part of the "extraordinary" measures to support the UK economy in the face of disruption from the COVID-19 outbreak, many businesses occupying property with a rateable value of less than £51,000 will be eligible for a tax holiday.
Business rates are a tax on properties that are used for commercial purposes, and are charged based on an estimate of what it would cost to rent the property on the open market: the "rateable value". This new measure, which will affect thousands of small businesses, applies for the next 12 months to retailers, museums, art galleries, theatres, caravan parks, gyms, small hotels, sports clubs and night clubs. All of these businesses will be hard hit if customers stay away to slow the spread of COVID-19. Retailers who already currently benefit from the 50% discount scheme will be rebilled to reflect the rates holiday, and others new to the discount scheme may need to apply. There is also a £5,000 business rates discount for pubs with a rateable value below £100,000.
A further boost will be given to any businesses eligible for small business rates relief or rural rates relief – these businesses will also be awarded a £3,000 cash grant. It is not yet clear how businesses will access the grants, but they will be provided by local authorities.
These emergency measures have been welcomed, but others have also questioned where the support is for the larger retailers on the high street, who already see themselves unfairly having to compete with online retailers. And whilst the Chancellor did refer to a business rates review, with the conclusions to be published in the autumn, there has been industry frustration that the budget did not offer more radical and long-term reforms to support the high street.