186: COVID-19 – Reliefs for business owners with premises

The Chancellor has announced a set of temporary measures aimed at supporting businesses through the disruption caused by the COVID-19 pandemic.

Business rates

One of these measures is for a 12 month suspension, for the 2020 to 2021 tax year, on the payment of business rates, in an attempt to limit the financial impact caused by the outbreak of the virus. This is being referred to as ‘the Business Rates Holiday’.

Who is eligible for the relief?

A business is eligible for the relief where:

• the business is based in England;
• the business is in one of the following sectors:
  • retail;
  • hospitality; and
  • leisure sector.
• the premises are used wholly or mainly as one of the categories set out below:
  • shops, restaurants, cafes, drinking establishments, cinemas and live music venues;
  • for assembly and leisure; and
  • as hotels, guest and boarding premises and self-catering accommodation.

What action must be taken to apply for the relief?

No action is required; the relief will be applied to the council tax bill in April 2020 although the government has warned that local authorities may need to reissue your council tax bill to take account of this.

The Chancellor has confirmed that there is no limit of the rateable values of property that can claim this relief, and if multiple premises are occupied, the relief will apply to each premises.

Business rates grant

The Retail and Hospitality Grant Scheme has been introduced to provide a cash grant of up to £25,000 to those in the retail, hospitality and leisure sectors.

Who is eligible for the relief?

A business is eligible where:

• the business is based in England;
• the business is in one of the following sectors:
  • retail;
  • hospitality; and / or
  • leisure sector.
• the premises are used wholly or mainly as one of the categories set out below:
  • shops, restaurants, cafes, drinking establishments, cinemas and live music venues;
  • for assembly and leisure; and
  • as hotels, guest and boarding premises and self-catering accommodation.

Businesses that do not pay business rates are not eligible for this relief.

What action must be taken to apply for the relief?

No action is required; the local authority will write to eligible business owners.

Support for businesses that pay little or no business rates

For those businesses that are eligible for Small Business Rate Relief (SBRR), Rural Rate Relief (RRR) or tapered relief, the government will pay a one-off grant of £10,000 to eligible businesses to help support these businesses in meeting their business needs.

Who is eligible for the relief?

A business is eligible where:

• the business is based in England;
• the business already benefits from SBRR  and/ or RRR; and
• the business occupies physical premises.

What action must be taken to apply for the relief?

No action is required; the local authority will write to all eligible businesses. The government has advised that any enquiries on the provision of, or eligibility of, this relief, should be directed to the relevant local authority.

Protection from eviction

The Coronavirus Bill has now come into force, and amongst the various provisions contained therein, commercial tenants are protected from eviction in the event that they are unable to pay rent on the premises that they occupy until 30 June 2020.

The government can extend this period, if required, however it has been made clear in government guidance that this is not a rental holiday and all commercial tenants remain liable to pay their rent to their respective landlords.

Conclusion

These moves should be welcomed by many businesses, whom have been hit hard by the requirement to close in line with government guidance regarding social distancing and isolation, especially with the automatic application of many of these reliefs.

It is worth noting however that we are very much in the early stages of the implementation of these measures and there is some uncertainty as to their application in practice. It is likely that further guidance will be issued by the government to deal with the uncertainty and ambiguity, and we will update our publications accordingly.