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Business rates windfall should be used to support small businesses getting back on their feet

The Government should ring fence the supermarket rates windfall that they have received to help small hospitality, retail and leisure businesses to get back on their feet in the New Year, says Richard Churchill.

Sainsbury’s decision to hand back £440 million of business rates relief following on from Tesco and Morrisons own announcements returning £850 million means Government will have received a windfall £1,290 million.

This money should not disappear into the black hole of public finances but is an opportunity for the Government to give clear messages and support to the hardest hit businesses in 2021 who face large rates bills from April onwards.

The rates holiday for small businesses in retail, hospitality and leisure was intended to provide a lifeline for those businesses to survive the effects of the Coronavirus pandemic. The large supermarkets who were able to remain open as essential retailers had no significant impact as a result of Coronavirus and it is right, they have returned this money that was not needed.

However, the business impact of Coronavirus has gone on for much longer than initially envisaged, beyond the timeline of the original support messages announced and for non-essential retailers their ability to trade has been reduced to next to nothing for the entire year. For those businesses planning ahead for 2021, a clear message on business rates from Government post-April is needed and this money should be used as part of the fund to allow further sector-specific business rate concessions for 2021/22.

Hopefully the Government will be able to build on this good news story and provide clarity to these hardest hit businesses in retail, hospitality and leisure as they seek to rebuild in 2021.

Many of these businesses have exhausted the other support measures in place and have critically low cash reserves. Knowing that their rates bill will be reduced or extinguished would be a real boost to these small businesses and allow more of them to be viable and continue to trade in 2021.

As other support measures come to an end and tax deferrals for 2020 become payable, cash flow will be critical for these businesses and Government should act now to provide further support and clarity for rates and give the targeted recipients of the relief time to plan.

Would you like to know more?

If you would like to discuss the above or how it may affect you, please get in touch with your usual Blick Rothenberg contact or Richard Churchill, using the details to the right.

For any press queries, please contact David Barzilay whose details are to the right.