Business rates relief: the good news and the bad

The government has unveiled a new business rates relief fund of £1.5bn for businesses affected by Covid-19 outside of retail hospitality and leisure.

“Many of those businesses, such as wholesalers, suppliers and brewers, have been hit hard by the pandemic but haven’t been able to access the same levels of support,” said Federation of Small Businesses (FSB) national chair Mike Cherry, welcoming the news.

“Although there is light at the end of the tunnel, these remain uncertain times for many businesses who won’t be functioning at full capacity for a number of months to come,” he warned.

A total of £16 billion has been set out for industries including retail, hospitality and leisure since the pandemic started, but other industries, such as wholesalers, have been campaigning for targeted support.

James Bielby, chief executive of the Federation of Wholesale Distributors (FWD), welcomed the announcement as “fantastic news” that “reflects the increased recognition within government of the vital role of food and drink wholesalers”.

“The past year has had a devastating impact on foodservice distributors and it’s especially welcome that the Treasury highlights food wholesalers as an example of where this fund should be distributed,” he told Speciality Food. “It couldn’t be clearer that our sector is at the front of the queue.”

Along with the extended Additional Restrictions Grant, there is now a total of nearly £2 billion in new government assistance available for food wholesalers through local authorities.

“While there is still a job to be done to ensure the money goes where the government intends, this is a timely boost for the supply chain when the hospitality sector is relying on its wholesalers to bring it back to life,” James said.

Covid-related appeals “ruled out”

Within its announcement of the new rates relief, the government added that it will “rule out” business rates appeals related to the Covid-19 pandemic.

“Many of those ineligible for reliefs have been appealing for discounts on their rates bills, arguing the pandemic represented a ‘material change of circumstance’ (MCC). The government is making clear today that market-wide economic changes to property values, such as from Covid-19, can only be properly considered at general rates revaluations, and will therefore be legislating to rule out Covid-19 related MCC appeals,” the government said.

It said that allowing business rates appeals could have led to “significant amounts of taxpayer support going to businesses who have been able to operate normally throughout the pandemic and disproportionately benefitting particular regions, like London”.

However, the news has been labelled a “catastrophic blow” for impacted businesses, according to the BBC. Robert Hayton, UK president of property tax at the real estate adviser Altus Group, 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.”

Keith Cooney of property consultancy Knight Frank, who was also cited by the BBC, said the decision was “draconian”. “It is retrospective and therefore will penalise the estimated 400,000 businesses that have applied for a reduction by sensibly appealing their rating assessments,” he said. While the decision on appeals will certainly impact businesses, for food and drink wholesalers who have campaigned for targeted support for the past year, the £1.5 billion worth of funding couldn’t come soon enough.