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Which businesses are eligible for the Expanded Business Rates Retail Discount?

Some of the businesses most severely affected by the Covid-19 pandemic operate in the retail, hospitality and leisure sector, with many being instructed by the Government to close down. For many of those same enterprises, business rates probably represent a (if not the) major operating cost.

In attempt to alleviate some of the financial damage, one of the first fiscal measures announced by the Government was that retail, hospitality and leisure businesses in England would not have to pay any business rates for the 2020-21 tax year. This ‘holiday’ is provided via an expanded, 100%, Business Rates Retail Discount (BRRD).

Eligible businesses must be based in England and must operate in the retail, hospitality and/or leisure sector. Business rates are charged by reference to the property occupied by the business.

Which properties benefit under the BRRD?

Properties benefiting under the BRRD are those that are used wholly or mainly:

  • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues – including properties being used:

    • for the sale of goods to visiting members of the public (e.g. shops, opticians, garden centres)

    • for the provision of services to visiting members of the public (e.g. hairdressers, travel agents, dry cleaners), and

    • for the sale of food and/or drink to visiting members of the public (e.g. cafes, coffee shops, pubs and bars)

  • for assembly and leisure – including properties being used:

    • for the provision of sport, leisure and facilities to visiting members of the public (e.g. sports grounds, stately homes, theatres),

    • for the assembly of visiting members of the public (e.g. public halls, clubhouses), or

    • hospitality such as hotels, guest and boarding premises and self-catering accommodation – including, for example, any other properties being used for the provision of living accommodation (e.g. holiday homes, caravan parks)

The list outlined above is not exhaustive but illustrates the types of property use the Government considers eligible for the BRRD.

Properties used for broadly similar purposes should be eligible for relief. However, it is important to emphasise that the property must be wholly or mainly being used for a qualifying purpose.

Which properties are ineligible for the BRRD?

Properties ineligible for the BRRD are those that are (or broadly similar in nature to those):

  • used for the provision of the following services to visiting members of the public:
    • Financial services (e.g. banks, building societies, bureaux de change)
    • Medical services (e.g. dentists, doctors, vets)
    • Professional services (e.g. solicitors, accountants, financial advisers)
    • Post office sorting offices (note: Post Offices are eligible), and
  • not reasonably accessible to visiting members of the public

Who determines eligibility?

Local authorities will determine businesses’ eligibility for the BRRD, exercising discretionary powers afforded under statute but following guidance issued from central government.

There is no application process. Local authorities will automatically apply the BRRD to Business Rates bills for 2020-21. Central government will fully refund the cost of the discount to the local authorities.

Businesses that have already received their 2020-21 bill should expect to receive a revised bill in due course.

Although the BRRD only applies to businesses based in England similar relief measures have been adopted by the devolved administrations in Scotland, Wales and Northern Ireland.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 90

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About this Author

Robert O'Hare, Squire Patton Boggs Law Firm, Professional Support Lawyer
Professional Support Lawyer

Robert O’Hare is a professional support lawyer in the firm’s Tax Strategy & Benefits Practice Group. He is predominantly based in the London office.

Primarily a corporate tax specialist, Robert has wide-ranging experience of advising clients on the full range of corporate tax issues and has specialist knowledge of UK and cross-border corporate acquisitions, public market and financing transactions alongside both private equity and retail investment fund structuring. 

207-655-1157