News
Business rates holiday starts winding down
The extended 100% business rates holiday for retail, hospitality and leisure businesses in England came to an end on 30th June. From 1st July, relevant businesses will pay a third of rates until 31st March 2022.
The business rates holiday has been one of the most effective COVID-19 support measures for the retail, hospitality and leisure sectors. Approximately 400,000 firms within the hospitality and leisure industries have benefitted from the 100% business rates holiday during the last 15 months, as part of the Treasury’s coronavirus support package.
In the March 2021 Budget, the Government extended 100% business rates relief for eligible retail, hospitality and leisure properties in England until 30th June 2021. The Government also announced a transitional 66% relief will apply from 1st July 2021 to 31st March 2022. As a result of the reduction in support, local councils will begin billing hospitality and leisure businesses with rates payments from the start of July.
As well as business rate relief dropping to 66%, relief will also be subject to a cap. For the period from 1st April 2021 to 30th June 2021 there was no cash cap on the relief received. From 1st July 2021, relief will be capped at £105,000 per business, or £2 million per business where the business is in occupation of a property that was required, or would have been required, to close, based on the law and guidance applicable on 5th January 2021.
Businesses should contact their local authority with any questions they may have about these changes.
According to real estate adviser, Altus Group, the reduced relief package until April 2022 will require tens of thousands of small businesses to meet tax liabilities worth up to £5 billion. Any business affected by these changes will need to review their cashflow position, where they have not prepared for the change. With the UK Government continuing to cover a third of business rates commitments for eligible firms at a cost of £3.3 billion, this takes the Government’s total financial support to £17.1 billion, said a spokesman for Altus Group.
Date published 2 Jul 2021 | Last updated 2 Jul 2021
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