Government tore up the rating handbook last March but only a tiny fraction of businesses have received promised reliefs one year on - a “shocking" treatment of businesses says Colliers.
Hundreds of thousands of businesses promised business rates reliefs through the £1.5 billion Government Business Rates Relief Fund are still waiting to receive support despite promises made by the Government nearly a year ago. According to business rates experts at Colliers, distribution of the fund is fast becoming a postcode lottery.
The now named COVID-19 Additional Relief Fund (CARF) was announced last March following the Government’s unprecedented step of announcing that Material Change of Circumstance (MCC) business rates appeals for businesses impacted by COVID-19 would not be valid for the appeals system – a move that was lambasted by the rating profession at the time and put paid to the hopes of hundreds of thousands of businesses who had started the appeals process against their rates bills, on the grounds of the impact the pandemic had had on their businesses.
The new £1.5 billion relief fund announced instead, would be for businesses affected by COVID-19, outside the retail, hospitality, and leisure sectors, which would be distributed by Local Authorities to “get cash to affected businesses in the most proportionate and equitable way.
Yet despite the call for haste, the Government took nine months to pass the necessary legislation relating to the MCC provisions and to set out guidance for local authorities to set up their local relief schemes. And rather than providing a standard guidance for allocation and distribution, the government has allowed local authorities discretion to allocate funds as they see fit - a situation John Webber, Head of Business Rates at Colliers describes as “carnage”.
“Giving the local authorities the ability to decide who is eligible for the reliefs is just not prescriptive enough and we know from past experiences that authorities all have different interpretations of the regulations. We’ll be ending with 300 odd policies and whether businesses receive relief or not will be a total postcode lottery.”
Colliers points out such a system is particularly difficult for any business with multiple sites, having to manage multiple schemes, each with its own criteria, exclusions, varying evidence and /information requests and deadlines.
According to Colliers, only around 19% of local authorities have released their relief policies for this fund, with many others saying they will get annual billing for 2022/23 out of the way first. So nearly a year on, very little relief has actually been distributed - so little that the government has not published its distribution tables yet.
And, as feared, those LAs that have released criteria are ranging widely. Some authorities have capped awards - such as a Central London authority who have capped relief at £30k per entity, and others have shown much more inflexible restrictions on eligibility such as one Surrey regional local authority who are not awarding to office businesses or those businesses with a rateable value (RV) above £500k. In Gloucestershire one local authority has announced it will not be awarding reliefs if a ratepayer has more than five properties across England.
An added complication for ratepayers is that some of the schemes that have been released (albeit very few) have now been closed to applications, making it nigh on impossible to manage for multi-site ratepayers. And others are on a ‘first come first served’ basis meaning if you’re not checking for releases regularly businesses could miss the boat.
Webber continued, “By its actions, the Government has not only denied hundreds and thousands of businesses the right to justifiably appeal their business rates, but it has instigated a relief system that has been decimated not only by the size of fund to be distributed but also by the interpretation and resources of local authorities on how to distribute it.”
“Meanwhile many long-suffering businesses are still waiting for their reliefs one year on from the announcement and two years since COVID set in and the first lockdown began with the Government telling office workers to work from home. That’s two years for businesses who’ve been adversely impacted by COVID-19 to miss out on the support they need. It’s a total joke.”