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Government Commits Further £1.5bn to Business Rates Relief

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A sum of £1.5 billion has been promised as extra business rates relief to operators in England who have been badly impacted by the Covid-19 pandemic but haven’t been eligible to relief through other channels.

Businesses in the retail, hospitality and leisure sectors have already been promised rates relief worth a total of around £16 billion but the government has said it wants to ensure other kinds of companies are covered by similar support.

Those rate reliefs are due to run until June 2021, by which point all businesses should be able to start operating again almost as normal having come through the various Covid-induced lockdowns of recent months.

Official statements from government have explained that some businesses have been left ineligible for rates relief so far and have been applying for discounts on the basis that the pandemic has caused them a ‘material change of circumstance’ (MCC).

The government has said it will not be considering appeals against rates bills based on an MCC but will instead aim to provide financial support via its new £1.5 billion fund to businesses in sectors it views as having “suffered most economically” in recent months.

A keenness to avoid providing financial relief to businesses that have been able to operate almost as normal during the pandemic is cited as the key reason why an approach not tied to commercial property prices is being taken.

“By providing more targeted support than the business rates appeals system, our approach will help protect and support jobs in businesses across the country,” said chancellor Rishi Sunak in a statement on the subject.

“This is the fastest and fairest way of getting support to businesses who need it the most,” added Robert Jenrick, secretary of state for the Ministry for Housing, Communities and Local Government.

UK Hospitality has welcomed the announcements about an extension of business rates relief as good news for companies like those within the hospitality industry’s supply chains who have been badly hit by the pandemic but struggled to access rates relief. 

However, the trade body has argued that thousands of hospitality businesses will still be struggling to cover the costs of their rates bills once their reliefs are removed and they’ve reopened in July.

“Extending the full rates holiday to September now would provide government and industry with much-needed breathing space,” argues Kate Nicholls, UK Hospitality’s chief executive.

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