Colliers International is calling on the Government to re-think its strategy on business rates relief and holidays. It is suggesting a system based on needs to ensure the most vulnerable companies benefit across all sectors, while also reducing Government costs.
News that John Lewis has come under pressure to hand back millions of pounds in business rates relief received in the retail business rates ‘holiday’ 2020/21 has put the whole issue back in the spotlight, said John Webber head of business rates at Colliers.
Last year the retail/ hospitality and leisure sectors were given a blanket business rates holiday - a quick response by the Government to help businesses who were struggling because of the pandemic and lockdown. Colliers has estimated that the total rates holiday was around £12bn. However, this blanket approach also meant supermarkets that were able to stay open through the national lockdowns also benefitted from the rates holiday, even though many of them made a profit on the year’s trading.
The result has been some naming and shaming, and Webber said: “It’s time for a re-think. The Government’s blanket approach last year was in many ways perfectly sensible. We did not know what we were dealing with in the early stages of the pandemic and which companies would be able cope well and which wouldn’t under lockdown - and the overall priority was to preserve jobs and keep the nation fed. However, we suggest the Government this time asks businesses to show proof of a decline in turn over or profit caused by the pandemic and lockdown to be eligible.
“We want the Government to extend reliefs to businesses outside the retail/ leisure and hospitality sectors. Allow the names of the businesses that do apply for the rates holiday to be in the public domain- again focusing the minds of companies to only apply if they have genuine need.
“For those eligible businesses, offer a business rates holiday for the next six months. We suggest the government acts quickly on to avoid new bills being sent out to struggling companies as we start the new rating list in April. The Scottish government has already announced a three-month extension of reliefs for the retail, hospitality, and leisure sectors in Scotland, so what is the UK Government waiting for? A well targeted reliefs programme announced now to businesses genuinely struggling would provide an important buffer so businesses can plan their re-openings and hopefully maintain jobs.”