On top of current reliefs, Colliers estimate this will cost around £9 billion- but will be money well spent to keep British business functioning.
The Chancellor’s massive package to help the retail and leisure industries announced at the beginning of the week is incredibly welcome according to John Webber, Head of Business Rates at Colliers International, but does not go far enough to support the wide span of businesses impacted by Covid-19, which also need some respite from the crippling property tax.
According to Colliers, retail and leisure are not alone in being crucial to the UK economy- telecoms, financial services, manufacturing are also key. “Every business plays its part and every business is suffering at the moment and likely to do so going forward for the next few months due to forces outside their control. We really must support them- and a package of cheap loans is not enough.”
Webber continues, “Rather than giving stage by stage offerings to whichever sector is shouting loudest – today nurseries were granted business rates relief, tomorrow it will be someone else- the Government should have a consistent across the board approach. We would suggest giving every business a six months holiday, to be reviewed at the end of that six months to see if it should be extended for the year.”
Currently the business tax take is around £26 billion net, of which the retail sector pays around one quarter, around £7.625 billion. Given the rates holiday for retail already announced, that leaves a bill of over £18 billion for the year. A six months holiday to all companies would therefore cost the government around £9 billion, which is not out of the realms of possibility, given the other amounts the government has been discussing.
According to Webber, some billing authorities* have already announced they are not going to be actually collecting rates in April in any case- so this shows some are already considering their own deferment schemes. Webber feels we should rather see uniformity across the board and the benefits given to every business in every local authority and funded by central Government. “Otherwise businesses will take matters into their own hands- and simply not pay.”
“And I would include offering empty rates property relief also. A landlord that has had a property empty for over three months is paying full business rates on this. Yet the landlord has not a hope in re-letting the property in the current economic climate. The Government should recognise this and provide relief accordingly. Property landlords include some of our key pension funds and institutions. Any fall out from them will impact on the man on the street’s pension pot, so only exacerbating the current issues.”
Webber concludes, “The Chancellor ‘s speech should be applauded in starting to provide support for one of our most critical sectors. But it is not the whole story. We say “get it done” and grant a full six months business rates holiday, at the least, - before it all becomes too little too late."
*For example, Sheffield City Council