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Following the Chancellor’s initial announcement regarding the expansion of the retail relief scheme for 2020/21, the Government has made a series of changes extending the scope of the scheme which now covers a wider range of property uses in the retail, leisure and hospitality sectors.

In our last update on 26th March we expressed our disappointment that there was no clarity over whether EU State Aid limits would apply to this relief. We are pleased to see that the latest update to the guidance is transparent on the Government’s position stating that:

“The Government’s assessment is that, given the impact of Covid-19 in the sectors receiving the relief, the business rates expanded retail, leisure and hospitality discount 2020-21 is not a state aid.

The Government has considered this matter in discussions with the European Commission and is content with this analysis following those discussions. Local Authorities should apply the relief to all eligible properties.”

Businesses in England should now feel able to take the Chancellor at his word that no business which occupies properties that qualify for the relief will pay any business rates on those properties in 2020/21.

The Welsh and Scottish Governments took slightly differing approaches to the retail relief scheme. Wales has introduced an exclusion of properties with assessments of RV £500,000 or more and says that it is awaiting EU approval to treating this scheme as outside the usual State Aid provisions. The Scottish Government has included airports within its scheme but has implied that EU State Aid limits would apply.

We are waiting to see whether the devolved Governments follow the English approach on this point and will update you further.

Despite further lobbying there are still no specific measures for businesses with properties outside of the qualifying retail, leisure and hospitality sectors despite many of these businesses having had to close sites as a result of the directions from the Government restricting travel and requiring people to stay at home and avoid social distancing.

Whilst sites may have closed, they will rarely have been totally vacated as the closures will hopefully be temporary measures.

There is clearly a strong argument that these properties have effectively been closed as a result of government orders and should therefore be treated as exempt from empty rates in the same way as property where occupation is legally prohibited. Therefore, where properties have been shut for these reasons, we would encourage applications for 100% empty rate relief. We are aware, however, that some authorities are presently adopting the position that as the property is not fully vacant there can be no exemption from occupied rates. Legal opinion is being sought to clarify the law concerning occupied and vacant rates in these exceptional circumstances and we will advise clients further in due course.

We continue to believe that the Government ought to give business rates relief beyond the extensive measures taken for some sectors and will be pressing the matter with our contacts at the relevant Government departments.

Key Contacts

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Simon Green

Head of Business Rates

Alan Hampton


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