Small businesses right across England are soon set to see their business rates bills reimposed with the Business Rates Relief set to end in April. The Federation of Small Businesses (FSB) is calling on the UK government to:
1. Extend the retail, hospitality and leisure 100% relief for another 12 months to April 2022
2. Establish a revenue test so business rates relief is extended to those in the supply chain who’ve been impacted by the pandemic
3. Increase the number of small businesses which are able to claim business rates relief by moving the rateable value threshold at which they start to receive bills to £25,000 from £12,000
FSB National Chair Mike Cherry said: "Over the past year, small businesses right across the nation have seen their finances upended, placed staff on furlough while others have been forced to make difficult decisions about their futures. However, despite all this, and in the midst of a third national lockdown, these same small firms on the high street will now start to receive letters from their local authorities asking for business rates to be paid for the next financial year.
"For too long the business rates system has been outdated and regressive, and the ongoing pandemic has only highlighted the need for serious reform in the months ahead. But over the past few months, many small firms have benefited from the retail hospitality and leisure relief which has helped to ensure businesses don't go under and jobs are saved.
"But with this due to end in April, and with the economic situation set to remain turbulent for many months to come, it is imperative that the Government extends this rates relief.”
In Scotland, Ministers in Edinburgh have confirmed 100% relief for operators in the retail, hospitality and leisure sectors for three months from April. However, FSB wants to see this help extended for the entire year.
Andrew McRae, FSB’s Scotland policy chair, said: “We need to avoid any scenario where businesses face property tax demands on premises the government has barred them from using. Full rates relief for all smaller firms must be confirmed for the year, allowing local shops, pubs, hotels and restaurants to get back on their feet.”
FSB Wales has similarly called on Welsh Government to extend 100% business rates relief for retail, hospitality and leisure firms for another 12 months in order to remove the cliff edge that many firms are facing in April.
Ben Francis, FSB Wales Policy Chair, said: “Welsh firms are still in the dark about when or how they will be able to reopen, and yet at the same time are facing significant financial obligations without any idea of how they can meet them. That’s why Welsh Government must take action now to support these firms in the coming months.”
In Northern Ireland, the Finance Minister has set aside £150 million for rates support in 2021/22, and has previously hinted that this would be used for additional 6 months relief to those sectors which received a 100% rates holiday this year.
Commenting, FSB NI Policy Chair, Tina McKenzie said: “Given the financial difficulties which many businesses are facing, we must consider whether it is appropriate to levy rates on businesses at all in the next financial year. A rates discount for those businesses most impacted by the pandemic should be a priority for the Executive. Ministers must also enhance Small Business Rate Relief, which would recognise the wide range of SMEs which have been impacted by the economic fallout of coronavirus.”
Mike Cherry added: “We must also address the ongoing issue surrounding those who have been left with little support. The retail, hospitality and leisure business rates relief does not encompass the whole sector. Thousands of small businesses in the supply chain have lost the same trade, but have not been allowed to access the same relief. These small firms are struggling just as equally and need to be offered the same levels of support to safeguard their long term futures.
“In addition to this extending support to those in other sectors outside of retail, hospitality and leisure such as the manufacturing industry which will have seen orders cancelled and put on hold.
"It would be hugely unfair to slap small firms with large business rates bills at a time when many won't see their incomes rise for months to come, which is why this extension is needed for at least another 12 months.
"Not only do we want to see the retail hospitality and leisure relief extended, but we think it is important to widen the net of those who can claim small business rates relief. Up until now, the full relief was available for those with a rateable value of up to £12,000, we want to see this widen to include those up to £25,000. This would be a genuine relief to thousands of extra firms who are struggling to make ends meet at a time of national crisis.
"Our small businesses on the high street are the beating heart of our communities and will also be crucial to the whole nation's recovery, but slapping regressive business rates bills on them will only undo any hard work they've done to keep running.
"The government must make big decisions for small businesses, and this would be one important step to helping firms onto the path to recovery."