Rating surveyors believe four-week delay will impact office sector until September and put more businesses at risk.
The delay in the easing of lockdown restrictions in England until 19 July due to rising coronavirus cases should be accompanied by further government support measures, according to John Webber, Head of Business Rates at Colliers - and in particular some relief on business rates.
The government has said current social distancing restrictions will remain in place for offices, shops and hospitality venues across the country beyond 21 June and the rule of six indoors for hospitality venues will still apply, as will the cap on outside gatherings of 30 people. People will still be advised to work from home if they can. Shops, theatres, museums and other venues will still be expected to enforce social distancing restrictions such as table service and mask wearing and nightclubs must remain closed.
The restriction will be reviewed in two weeks’ time and that “if, after two weeks, we have concluded that the risk has diminished then we reserve the possibility of proceeding to step four, and a full opening, sooner.” said the Prime Minister.
John Webber comments, “The delay in lifting restrictions creates a real problem for many sectors of our economy, particularly, as for many businesses, the ending of government support and reliefs will now be before restrictions are fully lifted, not after, as previously planned.
This means businesses in the retail and hospitality sectors, both impacted by costly coronavirus health and safety measures and social distancing policies which affect the bottom line, will be seeing business rates bills return on 1 July. For some of the bigger players the £2m cap on rates relief means that many will be back to almost full business rates payments during the summer. And as 30 June is also the date that the moratorium on the evictions of tenants is lifted, this could be a tough period for businesses in both sectors.”
“And turning to offices, the situation is even worse,” says Webber. “Not only have office occupiers received no business rates holidays during the pandemic, but the government’s announcement in late March that it will rule out any business rates appeal submitted on the grounds of COVID-19 related Material Change of Circumstance, give office occupiers nowhere to go.”
“Many office based businesses have been severely affected by the lockdown, particularly those in the serviced office business, who cannot rent out their space as the nation adheres to government policy to “work from home if you can.”
“By delaying the lifting of restrictions to 19 July, I believe you’ll find many businesses deciding it’s probably not worth going back into their space until September, given the” return to the office to work” coincides with the start of the holiday season. So, we will be seeing nearly a 3 months delay in all rather than just a couple of weeks.” says Webber.
Webber also feels it is unjust that although the government has promised a £1.5 billion business rates relief fund to compensate businesses for not being able to appeal their bills on grounds of MCC, this, “not only comes nowhere near compensating what businesses have lost through the pandemic”, but also the guidance on how to obtain this fund has not yet been published. “Businesses have received nothing from this fund so far, and don’t know yet when they will receive something or how to apply for it. It’s a shambles!”
“The VOA are getting ready to drop their July rates bills – the government must take action and provide a further rates holiday and extra support to businesses now.”