Serious discrepancies have emerged over how easy it is to access the £1,000 rates relief to which all retailers of a certain size are entitled. Rod Edwards, Head of Rating for Eddisons explains.
This rather makes a mockery of the government’s claim to be helping smaller businesses – and retailers in particular – to ride out the challenges of trading in a highly competitive environment.
All retailers occupying properties with a rateable value of £50,000 or less should, since 1 April last year, have been entitled to £1,000 off their rates bill. There are a few caveats but, broadly speaking, all retail businesses should have had an equal opportunity to access this saving.
However, while some local authorities have automatically granted the rates discount, without any form filling or supplementary questions, others have interrogated retailers to such a degree that it has become virtually impossible for them to obtain the relief.
One of the worst cases I am aware of is in the London borough of Croydon where a restaurateur was quizzed on how much of their menu was deep fried and whether they paid staff the minimum wage. It would appear that the local authority was assessing the retailer’s suitability for the relief, perhaps in order to discourage too many fast food venues in the borough.
Although the retail relief scheme is at the discretion of local authorities, the government’s own listing of qualifying retailers does not differentiate between types of restaurant. In another London borough, Ealing Council would not provide the relief until they had physically confirmed for themselves that the property was actually being used for retail purposes.
There may be genuine reasons where form filling is required, for example where the local authority needs to be sure that the retailer is conforming to EU law on state aid. The de minimis regulations state that relief must not exceed €200,000 over a three-year period and this may well be the case for retailers with multiple outlets.
The situation could become more complicated and uneven in the next rating year, when retailers have been promised a discount of £1,500 from 1 April.
I consider it grossly unfair that occupiers in some parts of the country are automatically receiving the rates discount from day one while others have to jump through hoops to get it, and may give up before they reach that point. I would be interested to hear about other examples where retailers are finding it hard to access this relief – or indeed, where it is proving easy.
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Craig joined Eddisons in 2011 as an Associate Director after spending 17 years in Leeds in the business rates environment. He has acted for many clients from single property owners to multinationals on a wide range of property from shops to concrete batching plants.
Craig has over 20 years’ experience in the rating field, but the ever-evolving and complex issues in this area means he continues to develop his experience and knowledge.