On 3 March 2021, the Chancellor announced key steps the country will take on the road to recovery from the latest lockdown due to the Covid-19 pandemic. One such step was the extension of the business rates holiday that has been in place since the start of the pandemic.

What are business rates?

Business rates are taxes that apply in England in respect of the occupation of non-domestic property, for non-domestic purposes. This includes properties such as shops, pubs and holiday rental homes amongst others, although there are certain exemptions.

The amount of business rates that are payable are determined by the relevant property’s “rateable value”. This is the open market rental value of the property as at 1 April 2015 (even if the property was built after this point) as estimated by a specific government agency.

This open market rental value will then be multiplied by an appropriate percentage, depending upon the size of the business. By way of brief summary, if the business’ rateable value is £51,000 or more, then a standard multiplier will apply, but if the business’ rateable value is below this threshold, then a small business multiplier will be applied.

What relief is applicable and till when does it apply?

In order to counteract the closure of high street businesses that coincided with the Covid-19 pandemic, the UK Government announced a 100% business rates holiday, eliminating the need for certain high street businesses to pay any business rates at all. This is in addition to the other reliefs that are otherwise available in usual circumstances.

This was initially due to expire at the end of March 2021, but due to the current lockdown having been in place since January 2021, the business rates holiday has been extended until 30 June 2021.

No action is required to receive the benefit of this holiday – this will be applied directly by the local council.

Will my business qualify for this relief?

In order to qualify for the business rates holiday, the business must be one of the following:

1. a shop;
2. a restaurant, café, bar or pub;
3. a cinema or live music venue;
4. an assembly or leisure property; or
5. a hospitality property.

The holiday is, therefore, aimed at those businesses that are most significantly impacted by the Covid-19 pandemic lockdowns, and should cover the majority of high street businesses.

Here at Herrington Carmichael, one of our specialisms are assisting with all corporate related matters for high street businesses and their owners. If you require further advice regarding any corporate transaction in respect of your high street business, please contact Edward Beedham in our Corporate department. You can also email your query to edward.beedham@herrington-carmichael.com, call 01276 686222 or use the contact form below.

This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.