All sectors of the industry have been battered since March 2020, but the biggest impact has been felt by investors in commercial property.
Landlords have been unable to enforce collection of rents since March 2020. Many of their tenants have been able to adapt to the new world, and have made profits despite the challenges. These businesses should be required to pay their rent arrears and start paying rent from April 2021, so their landlords can bring repayments due on bank loans up to date and recommence investment in maintaining and improving their investment properties.
We all know that retail and leisure and hospitality businesses need to get back on their feet and deserve future targeted support, but landlords who own the properties these businesses operate from also need support.
They cannot be forced to operate with no income in 2021. A High Street in which every other property is boarded up for several years while liquidators try and realise some money to repay creditors is not going to encourage people out to use the shops that do remain.
The Chancellor needs to provide grants to landlords in these sectors so that they can continue to provide the resource their tenants need to get back on their feet.
Rates reform is essential for the recovery of our retail industry. It is disappointing that this major issue has been pushed back again. Reshuffling the allocation of liabilities to sectors such as logistics is not going to generate enough money, instead the Chancellor needs to be courageous and collect taxes from another source. 2% on VAT would allow the tax collection from rates to be reduced to a level that retail can afford, as well as level the playing field with online sales. These are immediate issues.
The Chancellor should also be doing everything he can to ensure that the redevelopment of empty commercial properties is undertaken as soon as possible, and that the new buildings are carbon efficient. He should introduce tax reliefs to reward the use of green construction materials and designs.
The Chancellor can do this by substantially increasing the structural buildings allowance for green buildings, giving enhanced capital allowances for green plant and machinery, and reducing the VAT payable on ‘green’ materials.
The UK property industry is an essential cog in the UK economy which has been asked to support other businesses over the last year. This contribution has to be recognised, and the Chancellor must support, not penalise, this industry in 2021.