In his first Budget as Chancellor of the Exchequer, Rishi Sunak announced today that tens of thousands of small businesses in England will not pay business rates for the coming year.
Previously it had been announced by the government that businesses in the retail sector with a Rateable Value below £51,000 would receive a discount of 50% but today Sunak went a step further and abolished business rates altogether for the coming year.
In a spectacular turn, Sunak also announced the retail rates relief would apply to other eligible leisure or hospitality businesses with an RV below £51,000. Meaning that businesses such as museums, caravan parks, gyms, small hotels and night clubs who could have been amongst some of the hardest hit, will also pay no business rates for the next year.
Graham Isle, business rates specialist in our Leeds office commented, “Whilst the impact on retail sounds great, in practice the government are not giving away as much as it may first appear. State Aid De Minimis Levels sets out that most organisations can only receive up to €200,000 support within any three-year period.
“This means that whilst the announcement is welcome news for independent retailers with a small number of stores, units in less affluent towns and units in secondary locations it is unlikely to influence the struggling high streets. That said, the extension of the relief to additional property types will massively benefit sectors that could have been hardest hit and have previously been overlooked!
For now, we await further guidance that will be able to clarify what exactly this will mean and for which property types will be eligible.”