Business Rates and the Budget 2021

By Aaron McLeod, Director

Business rates featured heavily in today’s budget as the Chancellor announced that all businesses in the hospitality, retail and leisure sectors would be given a further three months’ exemption in England.

Probably one of the worst kept secrets of this Budget, he also confirmed the three hardest hit sectors will be discounted by 66% for the remaining nine months of the year albeit with a cap of £2m for those which were required to shut on January 5, 2021 and a £105,000 limit for those which remained open for business. Nurseries will also qualify for relief in the same manner but this is likely to come under the specific Business rates: nursery (childcare) discount provision.

So, not as generous as Scotland but no doubt sighs of relief in these quarters and no bills will be issues for three months as the relief is worked out. There was little cheer on the business rates front for other hard-hit sectors such as offices and the hospitality supply chain, however. We will continue to see the appeal numbers no doubt rocket in the new financial year.

There was also a hint about the Government making additional resources available to enable new tech in HMRC with a view to developing a digitalised system for business rates. However, with the business rates’ review pushed back to the autumn it is doubtful we will see any tangible changes or wholesale IT reform before those findings are published. But does this hint at the valuation date for the 2023 revaluation being moved from 1 April 2021 to 1 April 2022 one year before that new list comes into force…? That change would ensure that the rating list more closely follows the market and if revaluations do move to a three-yearly cycle, as indicated by Boris prior to the pandemic, those two changes would together answer many of the criticisms levelled at the business rates system.

The Government have forecasted £24 billion in Business rates receipts for 2021-2022 which is £8 billion less than that budgeted in 2020-2021 taking account of the impact of COVID related relief packages including Expanded Retail Relief.

Other Budget news includes:


Restart Grants in England of up to £6,000 per premises for non-essential retail businesses and up to £18,000 per premises for hospitality and other sectors that are opening later in addition to £425 million of discretionary business grant funding for local authorities to allocate.

Support for airports

The government is renewing the Airports and Ground Operations Support Scheme for a further six months from the start of 2021-22. This will provide support for eligible businesses in England up to the equivalent of half of their business rates liabilities during 2021-22, subject to certain conditions and a cap per claimant of £4 million.

Full Business Rates relief in Freeport tax sites in England

Relief will be available to all new businesses, and certain existing businesses where they expand, until 30 September 2026. Relief will apply for five years from the point at which each beneficiary first receives relief.

Freezing business rates multiplier

 As announced previously, the business rates multiplier for 2021/2022 will be frozen at 49.9p(Small business) & 51.2p(Standard)

There is again no mention of assistance for those who have been faced with the burden of empty properties throughout these uncertain times with no access to the reliefs on offer, whether this will form part of the discretionary business grant funding remains to be seen.  As ever we await the actual detail behind the announcement which should follow in the coming days and weeks.