Government 'must act fast' on £1.5bn business rates relief fund

Time is of the essence to ensure £1.5 billion in discounts on rates bills are administrated quickly to ease crippling cash pressures, business leaders said today.

The Treasury has unveiled details of a new Business Rates relief fund of £1.5 billion, for businesses affected by Covid-19 outside the retail, hospitality, and leisure sectors.

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 has said that market-wide economic changes to property values, as a result of the health crisis, can only be properly considered as general rates revaluations.

As a result, government will also be legislating to rule out Covid-19 related MCC appeals.

Instead the £1.5 billion pot will be distributed according to which sectors have suffered most economically, rather than on the basis of falls in property value.

Raj Kandola (pictured), head of policy of the Greater Birmingham Chambers of Commerce, said that although the cash injection is welcome, the Treasury must explain how it intends to help thousands of firms who are no longer eligible to apply for rebates on their bills.

“A cash injection of this scale is always welcome and is needed - especially if it can help those businesses that were made to close through no fault of their own and have fallen through the cracks of existing support.

“As we highlighted in our Back our Businesses plan, firms in the supply chain of the retail, leisure and hospitality industries have suffered from massive disruption and receive little direct support - hopefully this Fund will go someway to rectify the situation.

“Time is of the essence - the Government will need to work with Local Authorities to ensure that the discounts to rates bills are administered as quickly as possible in order to help ease the crippling cash pressures many businesses up and down the country are facing right now.

“Nevertheless, HMT also has to explain how they intend to help the thousands of businesses who will be negatively impacted by this announcement - in particular, those firms that have suffered genuine hardship and now are no longer eligible to apply for a rebate on their bills despite spending months in the appeal process.

“As always, we will await the full guidance note from Government on how the fund will be administered and full details will be shared in due course via our updated Covid-19 Support Grid. ”

John Webber, head of business rates at Colliers, lambasted the announcement, commenting that the announcement makes a mockery of the business rates appeals process and the system itself.

He said: “This is a staggering response by the Government to sectors that have been adversely impacted by Covid-19- that would not be out of place in a Banana Republic.

“The Government is ripping out the rule book retrospectively. It is the wrong thing to do on every level.

“The Government 's Valuation Office Agency (VOA) spent the last part of last year negotiating with the agents of rate payers on the impact of Covid-19 and its effects on businesses, following the government 's working from home and social distancing policies and agreed these constituted a MCC “Material Change of Circumstance ” by which businesses would be able to claim a rebate on their rates bills.

“To now deny this is a MCC retrospectively, because the numbers are too high is deeply shocking.

“ £1.5 billion will not even scratch the surface for businesses struggling to pay their rates bills from last year- over 400,000 of which have started the appeals process in what is 'the largest MCC caused by a single event in rating history'.

“After three months of refusing to negotiate with us, to introduce retrospective legislation 12 months after rate payers first presumed they would see some hope of reduction and to change the rules like this makes a mockery of the whole appeals process and indeed the business rates system. ”

Read out Back our Businesses report here.

Access our Covid-19 support grid here.

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