Expanded Retail Discount
The Government announced in the 2018 Budget that it would provide a business rates retail discount scheme for occupied retail properties with a rateable value of less than £51,000 in each of the years 2019/20 and 2020/21. The value of the discount was one third of the bill, to be applied after mandatory reliefs and other discretionary reliefs, excluding those where local authorities have used their discretionary relief powers introduced by the Localism Act which are not funded by section 31 grants.
On 27 January 2020 the Government further announced its intention to increase this discount to 50% for eligible businesses and expand the discount to include cinemas and live music venues with a rateable value of under £51,000. At the Spring 2020 Budget, the Chancellor announced that, in response to Covid-19, the Government would increase the discount to 100% and extend it to include the leisure and hospitality sectors. The discount was subsequently further expanded to include businesses of any rateable value within these categories, and additional types of businesses have been included within the scheme.
Due to the ongoing Covid-19 pandemic, at Spring Budget on 3 March 2021, the Chancellor announced the continuation of support for eligible retail, hospitality, leisure businesses in England. For the first three months of the 2021/22 financial year, the expanded retail discount will continue to apply at 100% with no cash cap. For the remaining nine months of the year, the discount will decrease to 66% with a cash cap at £105,000 per business, or £2 million per business where the business is in occupation of a property that was required, or would have been required, to close, based on the law and guidance applicable on 5 January 2021.
Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
- as shops, restaurants, cafes, drinking establishments, cinemas and live music venues.
- for assembly and leisure; or
- as hotels, guest & boarding premises and self-catering accommodation.
We consider shops, restaurants, cafes, drinking establishments, cinemas and live music venues to mean:
1. Properties that are being used for the sale of goods to visiting members of the public:
- Shops (such as florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemist, newsagents, hardware stores, supermarkets etc.)
- Charity shops
- Post Offices
- Furnishing shops/display rooms (such as carpet shops, double glazing, and garage doors)
- Car/Caravan showrooms
- Second hand car lots
- Petrol stations
- Garden centres
- Art galleries (where art is for sale or hire)
2. Properties being used for the provision of the following services to the visiting members of the public:
- Hair and beauty services (such as hairdressers, nail bars, beauty salons, tanning shops, tattoo parlours and body-piercing services)
- Shoe repairs/key cutting
- Travel agents
- Ticket offices e.g. for theatre (where separately rated)
- Dry cleaners
- PC/TV/domestic appliance repair
- Funeral directors
- Photo processing
- Tool hire
- Car hire
- Employment agencies
- Estate agents and letting agents
- Betting shops
3. Properties that are being used for the sale of food and /or drink to visiting members of the public:
- Sandwich shops
- Coffee shops
4. Properties which are being used as cinemas.
5. Properties that are being used as live music venues:
Live music venues are hereditaments wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Hereditaments cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or a theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987 (as amended).
Hereditaments can be a live music venue even if used for other activities, but only if those other activities:
(i) Are merely ancillary or incidental to the performance of live music (e.g. the sale/supply of alcohol to audience members).
(ii) Do not affect the fact that the primary activity for the premises is the performance of live music (e.g. because those other activities are insufficiently regular or frequent, such as a polling station or a fortnightly community event).
6. Properties that are being used for the provision of sport, leisure and facilities to visiting members of the public (including for the viewing of such activities).
- Sports grounds and clubs
- Museums and art galleries
- Sport and leisure facilities
- Stately homes and historic houses
- Tourist attractions
- Wellness centres, spas, massage parlours
- Casinos, gambling clubs and bingo halls
7. Properties that are being used for the assembly of visiting members of the public.
- Public halls
- Clubhouses, clubs and institutions
8. Properties where the non-domestic part is being used for the provision of living accommodation as a business:
We consider hotels, guest & boarding premises and self-catering accommodation to mean:
- Hotels, Guest and Boarding Houses
- Holiday homes
- Caravan parks and sites
To qualify for the relief the hereditament should be wholly or mainly being used for the above qualifying purposes. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief.
Properties which have closed temporarily due to the government’s advice on COVID-19 will be treated as occupied for the purposes of this relief.
1. Properties that are being used for the provision of the following services to visiting members of the public are not included in the Retail Discount Scheme:
- Financial services (e.g. banks, building societies, cash points, bureaux de change, payday lenders, and pawn brokers)
- Medical services (e.g. vets, doctors, dentists, osteopaths, chiropodists, chiropractors)
- Professional services (e.g. solicitors, accountants, insurance agents, financial advisers)
- Post office sorting offices
2. Properties that are not reasonably accessible to visiting members of the public.