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Covid-19 Support For Businesses In England & Wales
COVID-19 SUPPORT FOR BUSINESSES IN ENGLAND & WALES PEGGED TO BUSINESS RATES
The UK Government has put in place a £22 billion support package for businesses in England through business rates relief and business grants.
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There will be a complete business rates ‘holiday’ for all retail, hospitality and leisure businesses in England for the 2020/2021 tax year, irrespective of Rateable Value. Properties closed temporarily due to the Government’s advice on COVID-19 will be treated as occupied for the purposes of granting the relief.
Some initial exclusions for relief were removed. Premises closed as a result of COVID-19 restrictions are also eligible for the relief and the rates ‘holiday’ was extended to those in the A2 category - including estate agents, professional services and bookmakers. Nurseries benefit, providing that they are occupied by providers on Ofsted’s Early Years Register and are wholly or mainly used for the provision of the Early Years Foundation Stage. The expanded business rates retail discount will cost the Exchequer £10.06 billion in lost tax revenues during 2020/2021.
354,670 premises will benefit from the property tax break; worth an average of £28,367 per property this financial year (1st April).
Nearly a third of the overall cost of the tax relief, a total of £3.03 billion, will cover the cost of the rates ‘holiday’ for 73,140 firms within the Capital. 7,407 premises in Westminster alone save £943.95 million in total.
ENGLAND
Local Authority
Westminster Cornwall Birmingham Leeds Manchester Camden Buckinghamshire Council Bristol Liverpool Haringey
Properties in receipt of expanded retail discount for 2020/21
Source: Ministry of Housing, Communities & Local Government
More than a fifth of the overall pot will cover the rates bills for retail, leisure and hospitality firms in just 10 Council areas covering major cities such as Birmingham, Leeds, Manchester, Liverpool and Sheffield.
Outside of Westminster and the City of London, Council areas dominated by major shopping centres such as Bluewater, Intu Metrocentre, Intu Trafford Centre, Intu Milton Keynes and Intu Lakeside, will see the biggest average rates savings during 2020/21.
Local Authority
Westminster Kensington and Chelsea Camden Birmingham Leeds Manchester Liverpool City of London Hammersmith and Fulham Sheffield
Cost of expanded retail discount
Source: Ministry of Housing, Communities & Local Government
Local Authority
Westminster Gateshead Dartford Kensington and Chelsea Blaby City of London Rushmoor Trafford Milton Keynes Thurrock
Average business rates saving per property
Source: Ministry of Housing, Communities & Local Government
Government Business Grants
The Retail, Hospitality and Leisure Grant Scheme provides businesses in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property.
Businesses in these sectors with a property that has a Rateable Value up to and including £15,000 will receive a grant of £10,000, while those with a Rateable Value of over £15,000 and below £51,000 will receive a grant of £25,000.
Under the Small Business Grant Fund, all businesses in receipt of Small Business Rates Relief and Rural Rates Relief will be eligible for a payment of £10,000.
As of 3rd May 2020, £8.61 billion had been paid out of the fund, worth £12.33 billion to over 697,000 business properties.
The Welsh Government has put in place a £1.4 billion support package for all businesses listed on the business rates register, covering business rates relief and business grants.
A business rates ‘holiday’ has been implemented for retail, hospitality and leisure businesses in Wales for the 2020/2021 tax year with a rateable value of less than £500,000. The Welsh Government has written to all of the businesses affected by the ceiling making it clear that they are eligible to apply for discretionary funding if they have a strong case.
A total of 119,872 properties in Wales are liable for business rates with a Rateable Value below £500,000 - with 52,738 of those premises falling within the retail, leisure and hospitality sectors, thus receiving 100% discount, saving £411.81 million in business rates for 2020/2021.
The ceiling on Rateable Value results in 167 retail, leisure and hospitality premises in Wales still paying ‘normal’ business rates during
WALES
2020/21, a total of £109.89 million.
Of the 167 premises excluded, 115 are hypermarkets or superstores (over 2,500m2). They will pay £78.02 million in business rates for 2020/21, whilst 21 large shops (over 1,850m2) will pay £15.74 million for 2020/21.
Government Business Grants
The business grants have two components:
Grant 1: For retail, leisure and hospitality businesses in Wales, a grant of £25,000 will be offered for businesses in these sectors, with a Rateable Value of between £12,001 and £51,000.
Grant 2: For all other sectors, the Welsh Government package provides a £10,000 grant to all businesses eligible for Small Business Rates Relief, with a Rateable Value of £12,000 or less.
State Aid
Whilst the UK left the EU on 31 January 2020, the Withdrawal Agreement provides that State Aid rules continue to apply during a transition period, subject to regulation by the EU Commission.
The Council must be satisfied that all State Aid requirements have been fully met when making grant payments, including, where required, compliance with all relevant conditions of the EU State Aid De-Minimis Regulation, the EU Commission Temporary Framework for State Aid measures to support the economy in the current COVID-19 outbreak, the UK notified and approved Scheme under that Temporary Framework, and any relevant reporting requirements to the EU Commission.
Grant payments made under the UK Temporary Framework Scheme will be subject to a de minimis limit of €800,000.
The Government’s assessment was, given the impact of COVID-19 in the sectors receiving the expanded retail, leisure and hospitality discount 2020-21, it was not State Aid. The Government discussed this matter with the European Commission and as a result those discussions, advised local authorities to apply the relief to all eligible properties.
