355,000 Firms Receive £10 Billion Property Tax Break | Altus Property Services

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355,000 Firms Receive £10 Billion Property Tax Break

The expanded business rates retail discount, to help try and negate the economic impact of Covid-19, will cost the Exchequer £10.06 billion in lost tax revenues during 2020/21 new analysis has found.

The real estate adviser Altus Group say 354,670 premises including supermarkets, shops, pubs and restaurants are among those who have now benefited from the tax break worth an average of £28,367 per property this financial year which started on 1st April.

Nearly a third of the overall cost of the tax measure, a total of £3.03 billion, will cover the cost of the rates holiday for 73,140 firms in the Capital with 7,407 premises in Westminster saving £943.95 million in total.

Local Authority Properties in receipt of expanded retail discount for 2020/21
Westminster 7,407
Cornwall 6,203
Birmingham 5,970
Leeds 4,573
Manchester 4,442
Camden 4,436
Buckinghamshire Council 3,788
Bristol 3,677
Liverpool 3,523
Haringey 3,467
Source: Altus Group

 

On 17th March the Chancellor, Rishi Sunak, announced that he was giving all retail, hospitality and leisure businesses in 314 Council areas across England a 100% business rates holiday during 2020/21 which started on 1st April.

More than a fifth of the overall pot will cover the rates bills for retail, leisure and hospitality firms in just 10 Council areas covering major cities such as Birmingham, Leeds, Manchester, Liverpool and Sheffield.

Local Authority
Cost of expanded retail discount 
Westminster 943,955,235
Kensington and Chelsea 231,588,141
Camden 195,322,037
Birmingham 169,976,817
Leeds 154,262,360
Manchester 144,422,979
Liverpool 128,499,495
City of London 116,044,705
Hammersmith and Fulham 115,943,208
Sheffield 112,806,547
Source: Altus Group

 

Council areas dominated by major shopping centres like Bluewater, Intu Metrocentre, Intu Trafford Centre, Intu Milton Keynes and Intu Lakeside reported the biggest average rates savings.

Local Authority Average business rates saving per property
Westminster £127,441
Gateshead £118,099
Dartford £83,729
Kensington and Chelsea £76,407
Blaby £69,996
City of London £66,387
Rushmoor £62,890
Trafford £61,640
Milton Keynes £54,671
Thurrock £54,509
Source: Altus Group

 

Robert Hayton, Head of UK business rates at Altus Group, warned “The respite will be short lived for the high street if the Government presses ahead and re-values business rates next year based upon rents paid on 1st April 2019, a full year before the economic impact of coronavirus” adding “if the Government doesn’t change track, artificially high rates bills will then be due for years to come bearing no resemblance to rents being paid as we come out of this crisis.”

Smaller premises, those with a Rateable Value below £12,000, were already eligible for Small Business Rate Relief, providing a complete exemption from business rates.

English Councils also distributed a further £1.02 billion in grant funding worth up to £25,000 to an additional 83,334 business premises last week taking the total amount that has now been paid out under the scheme to £8.61 billion representing 70% of the overall £12.33 billion pot.

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