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HELP WITH COMMERCIAL RENTS AND BUSINESS RATES

EXTRA HELP AVAILABLE FOR SMALL AND PARTICULARLY VULNERABLE BUSINESSES

If you have any questions, please get in touch with our COVID-19 Task Force here


RELEVANT AS OF 1:00PM 26TH MAY
Rent

The Government has taken steps to support commercial tenants who remain concerned about eviction from their business premises. We know this will be a particular concern for businesses who have been told to close by the government.

Commercial tenants who cannot pay their rent because of coronavirus are now protected from eviction.  The measures mean no business will be forced out of their premises if they miss a payment in the three months to 30 June 2020. The government has the option to extend this date too, if they see fit. 

The tenant will remain liable for the rent though and so will need to remain in dialogue with their landlord.

Landlords and investors were asked to work collaboratively with tenants to find a solution through the pandemic. Despite this, there have been widespread reports of some landlords putting tenants under pressure by using alternative debt recovery tactics.

To address this, the Government has announced that it will introduce temporary measures to:

  • Ban the use of statutory demands and winding up orders where a company cannot pay their rent due to coronavirus
  • Prevent landlords using the Commercial Rent Arrears Recovery process unless they are owed 90 days of unpaid rent.

These new measures will initially be in force until 30 June 2020, but with the option to extend them if deemed necessary.

Rates

There are other ways the government is helping out businesses with financial support that they won’t need to repay.

The government have announced that the planned revaluation of business rates will no longer take place in 2021.  This is welcome news for many businesses where the revaluation may have resulted in increased business rates. Of course, this is subject, to property valuations in the current environment which are no doubt going to be impacted.

Those of you based in England and operating in the retail, hospitality and leisure industries won’t pay business rates for 2020/21. This will broadly apply to properties in England that are occupied:

  • As shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • For assembly and leisure
  • As hotels, guest & boarding premises and self-catering accommodation

There’s nothing for you to do to get this relief – your local authority will deal with it for you. You can read the guidance they have been given here.

Grants

Some of you will qualify for cash grants, too. For businesses in the same industries mentioned above, grants will be available as follows:

  • £25,000 per property with a rateable value between £15,001 and £51,000
  • £10,000 per property with a rateable value of under £15,000

In addition, businesses in any industry that pay little or no business rates will also be given a grant of £10,000. This applies to businesses already claiming small business rate relief, rural rate relief or tapered relief.

These grants are taxable.

Your local authority will write to you if you are eligible for these grants. There’s nothing you need to do.

The total cost of these grants is estimated to be over £12bn which is staggering. You can see the breakdown of the figures per local authority hereAnd remember this is just one of the ways the government is providing help for businesses. 

You can estimate what this will save you by using the Government’s rates calculator. In addition, you can see the guidance issued to Local Authorities here.

What if I run a children’s nursery?

Properties that are occupied by providers of Ofsted’s Early Years Registration or are wholly or mainly used for the provision of the Early Years Foundation Stage will get a business rates holiday for the 2020/21 tax year.  Again, if you qualify this will be applied automatically by your local authority so there is nothing you need to do to get this help.

You can estimate what this will save you by using the Government’s business rates calculator.  In addition, you can see the guidance issued to Local Authorities here.

What if I don’t qualify for the above grants?

The Government have recently announced that up to a further £617 million would be made available to Local Government aimed at helping small businesses with ongoing fixed property costs.

The Government has asked Local Authorities to prioritise the following types of business (although there is the flexibility for them to choose to make payments to other business if deemed appropriate due to local circumstances):

  • Businesses in shared spaces
  • Regular market traders
  • Small charity properties that would meet the criteria for Small Business Rates Relief
  • Bed and breakfast businesses that pay council tax rather than business rates

These grants are primarily aimed at small and micro businesses (see below), those with relatively high on-going property costs and which can demonstrate they have suffered a significant fall in income due to the COVID-19 crisis.

They must occupy property, or part of a property, with a rateable value, annual rent or annual mortgage payments below £51,000.

A business will be small for these purposes if it satisfies two or more of the following requirements:

  • Turnover of not more than £10.2 million
  • Balance sheet total of not more than £5.1 million
  • Have less than 50 employees.

A business will be a micro-business for these purposes if it satisfies two or more of the following requirements:

  • Turnover of not more than £632,000
  • Balance sheet total of not more than £316,000
  • Have less than 10 employees.

The business cannot be entitled to some other Covid-19 support schemes such as the Small Business Grant Fund, Retail and Hospitality Leisure Grant etc, but being entitled to the Self Employment Income Support Scheme and CJRS does not impact on entitlement.

Grants will be a maximum of £25,000, with local authorities having discretion to adapt their approach to local circumstances.

And don’t forget….

The above measures are in addition to those that have already been announced, which includes:

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