Government to “rule out” Covid-19 business rates appeals amid new £1.5bn relief package

Government to legislate against Covid-19 business rates appeals
// Treasury making another £1.5bn available in business rates relief for companies unable to receive current support
// It would also legislate to “rule out” Covid-19 related appeals & direct these businesses towards the £1.5bn pot
// Tax and property experts have slammed the move

The government has said it will legislate to “rule out” business rates appeals related to the Covid-19 pandemic, as it unveiled a new £1.5 billion relief package.

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

Thousands of retail, hospitality and leisure firms are currently benefiting from government-mandated business rates holiday which was first announced a year ago.


In England, the tax relief will continue until the end of June, before becoming a reduced discount until the end of March 2022. In Wales and Scotland, the business rates holiday was extended for another 12 months.

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

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

It is understood this would 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 would 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.

“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,” he said.

John Webber, head of business rates at property advisory firm Colliers, said the government was “tearing up” the rule book and making a “mockery” of the system.

“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,” he said.

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

He added: “£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.

“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.”

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 per cent 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.

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

“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.”

with PA Wires

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  1. Commercial property firms have always been the biggest takers and deliverers of least value, so why should that change now.


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