Pausing of business rates revaluation brings relief to small firms

The government has announced that a revaluation of business rates will no longer take place in 2021. The announcement aims to help reduce uncertainty for firms affected by the impacts of coronavirus.

The legislation had been introduced to bring the next revaluation forward by one year from 2022 to 2021, but following the recent economic impacts of the coronavirus pandemic ministers want to ensure businesses have more certainty during this difficult time.

Communities Secretary Rt Hon Robert Jenrick MP said “We have listened to businesses and their concerns about the timing of the 2021 business rates revaluation and have acted to end that uncertainty by postponing the change. Now is the time for us to continue to focus on supporting businesses affected by the pandemic, including through our unprecedented package of almost £10 billion in business rates relief.”

“The government is continuing work on the fundamental review of business rates, with the key aims of reducing the overall burden on businesses, improving the current business rates system, and considering more fundamental changes in the medium-to-long term. The call for evidence for the review will be published in the coming months.”

The postponement comes on top of the government’s support package for business and workers during the economic emergency including:

• businesses are set to receive a discount of almost £10 billion on their rates bills this financial year in response to coronavirus, after the business rates retail discount was increased to 100% from 50% for 2020 to 2021
• over £12 billion for local authorities to deliver grants of up to £25,000 to eligible businesses. As of 3 May, over £8.6 billion has been paid out to over 697,000 business properties
• protections for UK high street shops and other companies under strain will be protected from aggressive rent collection and asked to pay what they can during the coronavirus pandemic
• the Coronavirus Job Retention Scheme where small and large employers will be eligible to apply for a government grant of 80% of workers’ salaries up to £2,500 a month, backdated to March 1 and available for at least 3 months. The first grants have been paid.
• a deferral of the next quarter of VAT payments for firms, until the end of June – representing a £30 billion injection into the economy
• a total of £330 billion worth of government backed and guaranteed loans to support businesses

Responding to the announcement that Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “This announcement will come as a relief to thousands of small business owners who are undergoing the toughest trading period they’ve ever seen.”

“Small businesses will now be able to focus more of their funds on keeping their firms afloat and paying their employees. Every meaningful measure that can help the survival of small businesses is critical, and this move will help provide business owners with some certainty during these uncertain times.”

“Although welcome, this development does raise questions about a revaluation in 2022, based on values already three years out of date. Any near-future revaluation must recognise the turmoil we’ve been through.”

“We also have concerns that this move could benefit cowboy rating surveyors who take a cut out of any ‘savings’ businesses get – meaning another year of profits without any additional work. We urge businesses to report poor practice, and continue our efforts to drive it out completely.”