One of the key factors that determine the tax on a business’s right to occupy commercial property in England has been frozen for 2021/22, the Chancellor has confirmed.
Buried in the supporting documents of Spending Review 2020 was a freeze on the business rates multiplier, which the Government expects to save retailers £575 million up to 2025.
The Government is also believed to be considering options for further COVID-19-related support through business rates reliefs and is expected to outline plans for 2021/22 reliefs imminently.
As the pandemic hit in March 2020, the Government introduced a 12-month business rates holiday across the retail, hospitality and leisure sectors.
That package is still in place until March 2021 and is currently providing companies with relief worth more than £10 billion in 2020/21.
However, retail groups have expressed concern that Chancellor Rishi Sunak might be waiting until Spring Budget 2021 in March to announce changes to the business rates system.
In normal circumstances by that point of the year, many retailers have usually made their plans for the forthcoming tax year.
Helen Dickinson, chief executive at the British Retail Consortium (BRC), said:
“A return to full business rates liability in April [2021] would be impossible for some firms to meet and freezing the multiplier in 2021/22 does not solve this problem.
“We are encouraged that the Government is considering options for further rates relief for businesses in England affected by COVID-19.
“Many retail businesses have been shuttered since November, depriving them of £8bn in sales.”
The BRC is urging the Government to set business rates in England at 50% to “reflect the fall in commercial property values and generate much-needed revenue for the Treasury”.
“This, along with an extension to the moratorium on debt enforcement, to encourage constructive dialogue between landlords and tenants on rents, will support the resilience of the retail industry,” added Dickinson.
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