With Landlords set to receive just a fraction of the rent they are owed today, on what has been dubbed ‘Watershed Wednesday’, the Chancellor must now acknowledge the pressure facing property owners as a direct result of the coronavirus and provide parity on tax.
Through the business rates system, the Government has provided a great deal of financial support to businesses affected by COVID-19 with £10.13 billion in rates relief for the retail, leisure and hospitality sectors in England.
However, one group that isn’t seeing support are Landlords. The time has surely come for the Government to recognise the unfairness in the way that the empty rates system operates in these unprecedented times.
It was right that the Government offered significant financial support for occupiers of premises in those sectors most adversely affected like retail, leisure and hospitality through the business rates holiday but those measures simply don’t extend to those properties vacant and to let.
Landlords with empty properties are having to face head on the impact of the extension of the protective measures which the UK Government have extended until the end of September to prevent struggling companies from eviction over the summer.
Whilst landlords are well versed in managing risk, none could have foreseen nor planned financially for a global pandemic nor the challenges they now face as Landlords remain under intense pressure to waive or defer rent to help their tenants survive.
Landlords have largely put their head above the parapet and stood tall ready to help their tenants. Whilst the Chancellor, Rishi Sunak, has dished the cash out to try and negate the economic impact of COVID-19 upon business, Landlords of commercial property have so far been overlooked despite being asked to play their part too.
The 2008 empty rates changes were essentially a penalty to try and bring properties back into use. It seems now wholly inappropriate to charge empty rates during these times of crisis. Surely, as a minimum, empty rates should be scrapped for retail, leisure and hospitality properties for the 2020/21 tax year to bring some form of parity with occupied properties in those sectors?
With over 20,000 shops forecasted to close for good in 2020, up by about 4,500 on last year, as occupiers re-evaluate their estates to try and trade successfully moving forward, further financial pain is yet to come. The time is long overdue that empty rates are modernised with rate free periods extended to reflect the time that it really takes to re-let.
No property that becomes vacant as a result of the economic consequences of the pandemic and which cannot be re-let should not have to pay punitive empty rates during 2020/21. It is not a big ask given the role Landlords are being asked to play.
It is now time for the Chancellor to acknowledge the important role that the commercial property sector is being asked to play in the recovery. The whole point of collaboration is give and take but at the moment there is no give by Government.