Budget 2020 - England

The extension of previous short-term sticking plaster reliefs for small retailers, pubs and local newspapers, had already been announced, however today the Chancellor revealed that for the year commencing on 1 April the retail relief would be increased to 100% and eligible properties increased to include cinemas, music venues nightclubs, art galleries, museums, small hotels and other leisure operators that previously were not included. This 100% discount applies to properties with assessments below RV £51,000. The discount for pubs with assessments below RV £100,000 will be increased for one year from £1,000 to £5,000.

These aren’t to be sniffed at for those that benefit, but European State Aid rules, which are still applicable post Brexit, are likely to limit how many actually benefit. The rules limit businesses to a maximum relief totalling 200,000 Euros (approximately £175,000) over a rolling 3 year period and many larger businesses will quickly reach this limit if they have not already done so with the reliefs received over the two prior years. We are awaiting further clarification on whether these rules apply to relief associated with COVID 19 – we understand that Government guidance regarding this and other aspects of the Covid19 relief will be issued next week.

The Budget measures fail to assist larger business and those outside the favoured retail and leisure sectors also adversely impacted by the Coronavirus pandemic.

The Chancellor has recognised that businesses already befitting from small business rates relief (SBRR) would not be helped by these measures and announced £2.2 billion of funding for Local authorities in England to “provide £3,000 to around 700,000 business currently eligible for SBRR or Rural Rate Relief, to help meet their ongoing business costs”. We await further detail on how this will be administered, understanding that this will not be shown on the rate bill but will apply to all those benefiting from full SBRR and taper relief.

As expected, the Chancellor confirmed the ‘Fundamental Review’ of business rates that was promised in the Queen’s Speech which he revealed will conclude at the Autumn Budget. Those of you that have seen our commentary on the subject will know that our concerns focus on how genuine the Government’s aims are with the review. If it is truly fundamental – including an openness to reducing the overall burden – then it is to be welcomed. A quick look at the terms of reference suggests the major issues will at least be looked into, but eyebrows will be raised that it is the Treasury – which has shown with recent responses that it is dismissive of the issues that concern ratepayers– undertaking the review, and not an independent body.

Time will tell whether the review is worth its salt, or just yet another attempt to placate ratepayers while kicking the ball into the long grass.

UBR Multiplier for 2020/21

Away from the Budget, the Government has now confirmed that the small UBR will increase to 49.9p for 2020/21, with the large UBR increasing 51.2p. These increases follow CPI as announced by the previous Chancellor. The City of London is the only council that is permitted to raise its own additional supplement and has announced this will be increased from 0.6p to 0.8p. Please contact us to talk through how this will impact on your liability from April onwards.