Chancellor of the Exchequer Rishi Sunak said the 100% business rates holiday in England, a tax cut worth £10bn so far, will be extended.
The 100% business rates holiday in England will be extended to the end of June. For the remaining nine months it will be discounted by two thirds up to a value of £2m for those who have been closed. The discount will be lower for those able to open.
The Budget documents write that the government will "continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2 million per business for properties that were required to be closed on 5 January 2021, or £105,000 per business for other eligible properties. Nurseries will also qualify for relief in the same way as other eligible properties. When combined with Small Business Rates Relief, this means 750,000 retail, hospitality and leisure properties in England will pay no business rates for 3 months from 1 April 2021, with the vast majority of eligible businesses receiving 75% relief across the year."
The government said local authorities will be fully compensated for the loss of income as a result of these business rates measures and receive new burdens funding for administrative and IT costs. It added that it will legislate to ensure that the business rates relief repayments that have been made by certain businesses are deductible for corporation tax and income tax purposes.
The three month extension to the business rates holiday in England to the end of June will provide £758 million in tax savings to ‘essential retailers’ who have remained open throughout the pandemic, according to the real estate adviser, Altus Group despite the Big four supermarkets, discounters and a number of other larger retailers having already repaid £2.16 billion in the relief that they received in 2020/21.
By Paul Norman.
