Third of high street firms miss business rates relief

Pedestrians walking past an empty shop units (Lewis Stickley/PA) (PA Wire)
Pedestrians walking past an empty shop units (Lewis Stickley/PA) (PA Wire)

The Government failed to support a third of high street businesses in England promised a discount on their business rates bills, according to new data.

Property specialists at Gerald Eve found that just 272,000 out of a promised 400,000 retailers, leisure and hospitality venues were able to claim a 50% discount on the commercial property tax announced at the last budget.

It comes as the industry experts warn that businesses could face a crippling £4.7 billion total increase in business rates next year without action.

The data comes from Freedom of Information requests to councils in England, asking them how many businesses in their area benefitted from the rates relief.

The business rates relief was handed to companies in sectors heavily impacted by pandemic closures to aid the recovery of the high street.

It means 128,000 missed out and has led to calls on the Government to ensure that any new support for businesses at the upcoming mini-budget is properly targeted.

The principal reason why only two-thirds of businesses have been able to access the 50% discount is that the former Chancellor placed a cap of £110,000 on the amount that each business can receive, rather than each property.

This means that retailers and hospitality operators with multiple sites cannot benefit other than for their first few properties.

UKHospitality is among industry bodies to call for a further business rates holiday as well as a VAT cut to help firms facing mammoth cost inflation and waning consumer sentiment in the update due on Friday.

Gerald Eve also called on the Government to extend the 50% discount next year to support businesses.

Without extending the support, retailers and the leisure and hospitality sectors – which were hardest hit from the Covid-19 pandemic – can expect their business rates bills to soar by £1.7 billion.

This is in addition to rates going up by the CPI inflation level for September, which economists predict could be around 10%, potentially adding a further £3 billion to the £30 billion tax.

Jerry Schurder, business rates policy lead at Gerald Eve, said: “The new Chancellor must avoid the mistakes of his predecessor when he announces support for businesses on Friday.

“Naturally, a lot of the attention will be on support for sky-high energy bills but there will be little point if those same firms see their business rates soar.

“In the 2019 manifesto, the Conservatives promised a fundamental review of rates and a reduction in the burden on the retail sector, but three years later, as good as nothing has been delivered.

“The new Prime Minister told businesses she wanted to intervene in reforming rates. Now she must deliver.”