Could business rates discount offer tax relief for the high street?

Business rates are a significant overhead for most occupiers of non-domestic property.

From April 2019, however, occupiers of retail premises could be eligible for a one-third discount on their business rates.

In summary, the discount will benefit smaller retailers, and applies to properties with a rateable value below £51,000.

In addition, if an occupier is already in receipt of some form of other relief, such as small business rates relief, they can also claim ‘retail relief’ on top of any existing relief.

This will be very welcome to smaller retailers, but many of the recent casualties of the high street have been larger chains; and these organisations are unlikely to see any benefit.

Landlords should also take note that retail relief does not apply to vacant properties.

The total amount of relief that can be claimed will be subject to ‘state aid’ limits.

The effect of this is to limit the maximum amount of benefit to any one business.

This will limit the maximum benefit for any business to about £275,000 over a five-year period, always assuming that the business concerned has not received any other government grants, subsidies or tax reliefs over the last three years.

The definition of retail properties follows that adopted from the previous retail relief scheme in 2014/15 and 2016/16, including shops, charity shops, hair and beauty shops, travel agents, dry cleaners, launderettes, tool hire, restaurants, takeaways and pubs.

A full list of eligible uses can be found at www.gov.uk – search for ‘Business rates: retail discount – guidance’.

The announcement has boosted confidence for those looking to expand, or starting a new venture, but what will happen beyond 2021 remains to be seen.

Daniel Green, of Flude incorporating Garner Wood, is a business rates expert, and would be happy to discuss any rating queries. Contact the Chichester office on 01243 819000, Portsmouth office on 02392 629000 or Brighton office on 01273 727070, or visit www.flude.com