Further rates relief granted to businesses but no claims for material change of circumstance

Samantha Jones, an Associate Director of Prop-Search

Business adversely affected by Covid-19 are set to get a £1.5bn discount on their business rates bills but will not be able to claim for material change of circumstance to further reduce payments says commercial property agent Prop-Search.

The Government has announced a further business rates relief fund for businesses in England outside of the retail, hospitality and leisure sectors which have been affected by COVID-19. This follows the “temporary” 100% business rates relief for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year and the Government’s extension in the March 2021 Budget of the 100% relief in England until 30 June 2021, after which rates will be discounted by two-thirds from 1 July 2021 until 31 March 2022.

Samantha Jones, an Associate Director of Prop-Search, said: “Further business rates relief is welcomed and is likely to come as a relief to businesses such as wholesalers and suppliers of the retail, hospitality and leisure sectors, who haven’t been able to benefit from the same levels of support as the businesses they supply.”

“However, this comes with an announcement of restrictions on businesses submitting appeals on the basis of a “material change in circumstances”. This is likely to adversely impact many businesses who had previously hoped to benefit from a reduction in their business rates bills but are now likely to miss out.”

Government has said that it intends to legislate to rule out businesses appealing for reduced business rates bills under the existing “material change of circumstance” (MCC) rules. It is believed some 170,000 businesses have made claims for MCCs.

Under MCC rules, a business can appeal for a reduction in its business rates assessment where it is able to show that the rateable value of the underlying property is inaccurate as a result of a MCC. Historically, MCC claims would have focused on events such as road or street works outside of the property, or construction works and associated scaffolding erected on an adjacent property. Businesses have, however, been seeking to argue that the impact of COVID-19 constitutes a MCC.