One-third of high-street firms missed out on business rates relief

The government failed to support a third of high-street businesses in England that were promised a discount on their business rates bill, according to new data.

Property specialists at Gerald Eve found that just 272,000 out of a promised 400,000 businesses, including retailers and leisure and hospitality venues, were able to claim the 50 per cent discount on commercial property tax that was announced at the last Budget.

The data comes from freedom of information requests to councils in England, asking them how many businesses in their area had benefited from the discount.

Business rates relief was handed to companies in sectors heavily affected by pandemic closures, in an effort to aid the recovery of the high street. The data indicates that 128,000 businesses missed out on the discount, and has led to calls for the government to ensure that any new support for businesses at the upcoming mini-Budget is properly targeted.

The principal reason for only two-thirds of businesses having been able to access the 50 per cent discount is that the former chancellor placed a cap of £110,000 on the amount that each business can receive, rather than each property. This means that retailers and hospitality operators with multiple sites will only benefit from the discount in relation to some of their properties.

It comes as industry experts warned that businesses could face a crippling £4.7bn total increase in business rates next year without action.

UKHospitality is among the industry bodies to have called for a further business-rates holiday as well as a VAT cut, to help businesses facing mammoth cost inflation and waning consumer sentiment, in the update due to be announced on Friday.

Gerald Eve also called on the government to extend the 50 per cent discount into next year to support businesses.

Without an extension of the discount, the retail, leisure and hospitality sectors – which were among those hit hardest by the pandemic – can expect their business rates bill to soar by £1.7bn.

This is in addition to rates going up by the CPI (consumer prices index) inflation level for September, which economists predict could be around 10 per cent.

Jerry Schurder, business rates policy lead at Gerald Eve, said: “The new chancellor must avoid the mistakes of his predecessor when he announces support for businesses on Friday. Naturally, a lot of the attention will be on support for sky-high energy bills, but there will be little point if those same firms see their business rates soar.

“In the 2019 manifesto, the Conservatives promised a fundamental review of rates and a reduction in the burden on the retail sector, but three years later, as good as nothing has been delivered. The new prime minister told businesses she wanted to intervene in reforming rates. Now she must deliver.”

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