A debt mountain of almost £2.5bn of unpaid business rates is crushing English firms, according to new data out this week.
With businesses forced to shut shop for long periods over the various lockdowns, debt piles have increased over the past 18 months, despite Government help via business rate holidays and various grant schemes.
The Government has declined to extend the business rates holiday any further for retail, leisure and hospitality companies but has confirmed an extension to the current ban on commercial evictions until next March.
However, analysis of official data has revealed a jump in rates arrears despite all the financial support measures in place. Councils collected £14.88 billion in business rates in the year to March 31, 2021, from firms not eligible for the holiday.
The stats also showed £1.18 billion in rates arrears accrued over the same period, taking total rates’ debt, including arrears from previous years, to £2.49 billion.
The large rates debt burden is expected to particularly affect office landlords and the industrial sector which still had to pay full business rates. This debt is in addition to the billions in rent debt arrears also accrued across the hospitality and retail sectors which is estimated at around £5 billion.
The new figures come as MPs debate legislation which will rule out any coronavirus-related business rates appeals under a Material Change in Circumstance (MCC). The Rating Surveyors’ Association estimate that the overall value of appeals due to coronavirus are worth around £5 billion to English firms.
To mitigate this, the Government announced back in March, that it would be setting up a £1.5 billion pot aimed at businesses outside the retail, hospitality and leisure sectors aimed at those who had suffered the most economically. As yet, no details of how this scheme can be accessed has been published.