Budget 2020: Business rates suspended for shops and cafes

man cooking in restaurant Image copyright Getty Images

Tens of thousands of England’s retail, leisure and hospitality firms will not pay any business rates in the coming year, the chancellor has announced.

Companies with a rateable value of less than £51,000 will be eligible for the tax holiday, Rishi Sunak said.

The measure applies to firms including shops, cinemas, restaurants and hotels.

It is part of a package of “extraordinary” measures to support the UK economy in the face of disruption from the coronavirus outbreak.

“That is a tax cut worth over £1bn, saving each business up to £25,000,” Mr Sunak said.

Business rates are a tax on properties that are used for commercial purposes, and are charged based on an estimate of what it would cost to rent the property on the open market: the “rateable value”.

Mr Sunak described the business rates holiday as an “exceptional step” that would benefit museums, art galleries, theatres, caravan parks, gyms, small hotels, sports clubs and night clubs, all of whom will be hard hit if customers stay away to slow the spread of coronavirus.

Media playback is unsupported on your device

Media captionRishi Sunak said the policy would help businesses deal with impact of coronavirus

The chancellor said the business rates system as a whole would be reviewed, with the conclusions published in the autumn. Firms in England have campaigned for several years for the system to be reformed, arguing it makes it hard for bricks and mortar retailers to compete with online rivals.

Business rates in Scotland, Wales and Northern Ireland are set by the devolved administrations.

More on Budget 2020

The head of retail and consumer at Pinsent Masons, Tom Leman, said the announcement would be “extremely welcome news” for small businesses.

“On the basis the coronavirus is not a long-term issue for these businesses, it is crucial that they have the liquidity to see them through the worst.

“This will definitely help the cause and hopefully see many of them come out the other side ready to benefit from the increased spending power prompted by the money people are currently saving on their discretionary spend.”

However, some small businesses said the move would not help them. Biju Bubble Tea, based in Soho in London, tweeted that it was suffering the impact of fears around the virus, but would not qualify for relief.

Image Copyright @BijuBubbleTea @BijuBubbleTea


Twitter post by @BijuBubbleTea: There are many independent businesses (such as ours) and many others (especially in London) that have shops with rateable values above £51k. Chinatown, which has been the worst hit, is home to many independent businesses with high rateable values Image Copyright @BijuBubbleTea @BijuBubbleTea

Image Copyright @BijuBubbleTea @BijuBubbleTea


Twitter post by @BijuBubbleTea: Not sure why a shop with a rateable value of £49k, would get a 100% discount. And a shop with £60k rateable value gets no discount whatsoever.. shouldn't this relief be on a sliding scale? Image Copyright @BijuBubbleTea @BijuBubbleTea

Larger retail and leisure chains are unlikely to benefit from the rates holiday.

 » Read More at bbc.co.uk