Government tore up the rating handbook in March but has not yet delivered reliefs promised - a “shocking" treatment of businesses.
Hundreds of thousands of businesses promised business rates reliefs through the £1.5 billion Government Business Rates Relief Fund have still not received a penny, despite promises made by the Government last Spring.
In March, the Government took the unprecedented step of announcing it would legislate 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 hundred 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.*
As a sweetener the Government announced a £1.5 billion New Business Rates Relief fund for businesses affected by COVID-19, outside the retail, hospitality, and leisure sectors, which would be distributed by Local Authorities. The relief fund would “get cash to affected businesses in the most proportionate and equitable way.”
The Government also said, “We’ll work with and support local government to enable ratepayers to apply as soon as possible this year, once the legislation relating to MCC provisions has passed and local authorities have set up local relief schemes.”
All well and good, except the legislation relating to MCC provisions has still not passed through Parliament and become law – six months on – and there are no signs it will be passed in the immediate future. Not only that but as John Webber, Head of Business Rates at Colliers points out:
“As far as we are aware neither the government nor the billing authorities have engaged with the rating industry or set out any guidance for businesses to apply to receive this relief fund. We are still very much in the dark.”
There are also rumours that the government will leave it to each billing authority to draw up its own guidance, a situation Webber describes as “carnage.”
“Giving the local authorities the ability to decide who will be 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 have 300 odd policies and whether businesses receive relief or not will be a total ”postcode lottery.”
Webber points out that by the time the billing authorities get their plans together it will be between 18 months and two years since COVID-19 set in, the first Lockdown began andthe Government told office workers to work from home.
That’s nearly two years for businesses who’ve been adversely impacted by COVID-19 to miss out on the support they need.
“One wonders what state they’ll be in by the time the reliefs are actually paid out.”
“As we said at the time when the Government announced this retrospective move to deny MCC appeals, £1.5 billion will not even scratch the surface for businesses struggling to pay their rates bills from last two year - over 400,000 of whom had started the appeals process in what was “the largest MCC caused by a single event in rating history”.
“But to not even get the scheme started yet is a disgrace and affront to businesses.”
*between April 1sts 2020, just after the start of the first Lockdown, and end March 2021, 409,430 checks (the first stage of the appeals process) were registered by businesses, most of whom had been impacted by Covid-19.
This dwarfs the 158,910 number of checks registered in the previous three years (April 2017 to March 2020) and shows the total disruption to hundreds and thousands of businesses caused by the pandemic and lockdowns.