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

The Government should ring fence the supermarket rates windfall that they have received to support small hospitality, retail and leisure businesses get back on their feet in the New Year, say leading tax and advisory firm Blick Rothenberg.

Richard Churchill and partner at the firm said: “ Sainsbury’s decision to hand back £440m of business rates relief following on from Tesco and Morrisons own announcements returning £850m means Government will have received a windfall £1,290m.”

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

Richard said: “ The rates holiday for small businesses in retail, hospitality and leisure was intended to provide a life-line for those businesses to survive Coronavirus. 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.”

He added: “ 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 2021 is needed and this money should be used as part of the fund to allow further sector specific business rate concessions for 2021/22.”

Richard said: “ 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. “

He added: “ As other support measures come to an end and tax deferrals for 2020 become payable, cashflow 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.”