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25 March 2021

Government to legislate against Covid-19 business rates appeals

25 March 2021

The Government has said it will legislate to “rule out” business rates appeals related to the coronavirus pandemic, as it unveiled a new £1.5 billion relief package.

Tax experts have said the legal change on appeals would be a “catastrophic blow” for many firms impacted by the property tax.

Thousands of retail, hospitality and leisure firms are currently benefiting from Government business rates relief which was announced at the onset of the pandemic.

The financial support will continue until the end of June, before becoming a reduced discount until the end of March 2022.

This will be a catastrophic blow for businesses who have spent the last year lawfully pursuing business rate adjustments only to have their statutory legal right ripped from them

On Thursday, the Treasury revealed that it is making another £1.5 billion available in rates relief for companies unable to receive current support.

It said the money will be distributed to sectors which have “suffered most economically” outside the current rates holiday.

It is understood that this will particularly benefit commercial property firms and supply chain businesses that are currently ineligible for the support.

The Treasury said many firms unable to receive rates relief have appealed against their business rates bills, arguing that they have been impacted by a “material change of circumstance” due to the pandemic.

However, the Government said it will now legislate to “rule out” Covid-19 related appeals and direct these companies towards the £1.5 billion pot.

Robert Hayton, UK president of property tax at the real estate adviser Altus Group, criticised the move.

He said: “This will be a catastrophic blow for businesses who have spent the last year lawfully pursuing business rate adjustments only to have their statutory legal right ripped from them to allow the Government to roll out a wholly inadequate scheme which won’t deliver enough business rates support and threatens the post-pandemic recovery.”

Data from the HMRC’s valuation office agency showed that 303,260 properties, including offices, pubs and retailers, lodged appeals in 2020, representing a 321% increase on 2019.

The Government said that allowing rates appeals on a “material change in circumstances” could have led to “significant amounts of taxpayer support going to businesses who have been able to operate normally throughout the pandemic” and would disproportionately benefit London.

Chancellor Rishi Sunak said: “Our priority throughout this crisis has been to protect jobs and livelihoods.

“Providing this extra support will get cash to businesses who need it most, quickly and fairly.

“By providing more targeted support than the business rates appeals system, our approach will help protect and support jobs in businesses across the country, providing a further boost as we reopen the economy, emerge from this crisis, and build back better.”

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