At the Budget on 3 March 2021 the Government confirmed its intention to continue with (a) the expanded retail discount scheme for 2021-22 and (b) the nursery (childcare) discount scheme for 2021-22.
The guidance below gives further details on both schemes.
You do not need to contact the Council to apply for support from the scheme – the Council will automatically calculate your discount and apply it to your Bill – and these will be issued from mid-March onwards
Expanded Retail Discount
The discount is 100% for three months, from 1 April to 30 June 2021, and at 66% for the remaining period, from 1 July 2021 to 31 March 2022. The government confirmed that there would be no cash cap on the relief received for the period from 1 April to 30 June 2021. From 1 July 2021, relief will be capped at £105,000 per business, or £2 million per business where the business is in occupation of a property that was required, or would have been required, to close, based on the law and guidance applicable on 5 January 2021.
Which properties will benefit from relief?
Properties that will benefit from the relief will be those wholly or mainly used as:
shops, restaurants, cafes, drinking establishments, cinemas and live music venues, for assembly and leisure; or as hotels, guest & boarding premises and self-catering accommodation,
The Government consider shops, restaurants, cafes, drinking establishments, cinemas and live music venues to mean:
Properties that are being used for the sale of goods to visiting members of the public:
- Shops (such as: florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licenses, chemists, newsagents, hardware stores, supermarkets)
- Charity shops
- Post offices
- Furnishing shops/ display rooms (such as: carpet shops, double glazing, garage doors)
- Car/caravan show rooms
- Second-hand car lots
- Petrol stations
- Garden Centres
- Art galleries (where art is for sale/hire)
Properties used for the provision of the following services to visiting members of the public:
- Hair and beauty services (such as: hairdressers, nail bars, beauty salons, tanning shops, etc.)
- Shoe repairs/key cutting
- Travel agents
- Ticket offices e.g. for theatre
- Dry cleaners
- PC/TV/domestic appliance repair
- Funeral directors
- Photo processing
- Tool hire
- Car hire
- Employment agencies
- Estate agents and letting agents
- Betting shops
Properties used for the sale of food and/or drink to visiting members of the public:
- Sandwich shops
- Coffee shops
Live music venues:
- Live music venues are properties wholly or mainly used for the performance of live music for the purpose of entertaining an audience. Properties cannot be considered a live music venue for the purpose of business rates relief where a venue is wholly or mainly used as a nightclub or a theatre, for the purposes of the Town and Country Planning (Use Classes) Order 1987 (as amended).
- A property can be a live music venue even if used for other activities, but only if those other activities (i) are merely ancillary or incidental to the performance of live music (e.g. the sale/supply of alcohol to audience members) or (ii) do not affect the fact that the primary activity for the premises is the performance of live music (e.g. because those other activities are insufficiently regular or frequent, such as a polling station or a fortnightly community event).
- There may be circumstances in which it is difficult to tell whether an activity is a performance of live music or, instead, the playing of recorded music. Although we would expect this would be clear in most circumstances, guidance on this may be found in Chapter 16 of the statutory guidance issued in April 2018 under section 182 of the Licensing Act 2003
Properties used for the provision of sport, leisure and facilities to visiting members of the public (including for the viewing of such activities).
We consider assembly and leisure to mean:
- Sports grounds and clubs
- Museums and art galleries
- Sport and leisure facilities
- Stately homes and historic houses
- Tourist attractions
- Wellness centres, spas, massage parlours
- Casinos, gambling clubs and bingo halls
Properties being used for the assembly of visiting members of the public.
- Public halls
- Clubhouses, clubs and institutions
Properties where the non-domestic part is being used for the provision of living accommodation as a business:
We consider hotels, guest & boarding premises and self-catering accommodation to mean:
- Hotels, Guest and Boarding Houses
- Holiday homes
- Caravan parks and sites
To qualify for the discount the hereditament should be wholly or mainly being used for the above qualifying purposes. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the relief. For the avoidance of doubt, hereditaments which have closed due to the government’s advice on COVID19 should be treated as occupied for the purposes of this relief.
The list set out above is not intended to be exhaustive as it would be impossible to list the many and varied uses that exist within the qualifying purposes. There will also be mixed uses. However, it is intended to be a guide for the types of uses that the government considers for this purpose to be eligible for relief. The Council will determine whether particular properties not listed are broadly similar in nature to those above and, if so, to consider them eligible for the relief. Conversely, properties that are not broadly similar in nature to those listed above will not be eligible for the relief.
The list below sets out the types of uses that the government does not consider to be an eligible use for the purpose of this discount. Again, it is for the Council to determine whether particular properties are broadly similar in nature to those below and, if so, to consider them not eligible for the discount.
Hereditaments that are being used for the provision of the following services to visiting members of the public
- Financial services (e.g. banks, building societies, cash points, bureaux de change, short-term loan providers)
- Medical services (e.g. vets, dentists, doctors, osteopaths, chiropractors)
- Professional services (e.g. solicitors, accountants, insurance agents/ financial advisers)
- Post office sorting offices
Hereditaments that are not reasonably accessible to visiting members of the public
How much relief will be available?
Subject to the cash caps, the total amount of government-funded relief available for each property for 2021/22 under this scheme is:
For chargeable days from 1 April 2021 to 30 June 2021 100% of the chargeable amount, and for chargeable days from 1 July 2021 to 31 March 2022, 66% of the chargeable amount.
Ratepayers that occupy more than one property will be entitled to relief for each of their eligible properties subject to the cash caps explained below.
The standard payment arrangement for business rates is for the liability for the year to be paid in 10 or 12 instalments. However, for those eligible for the Extended Retail Discount for 2021/22, this would mean those ratepayers having to make instalments in the first three months of the year when 100% relief is available. Therefore the Council will should ensure in accordance with Part 1, Schedule 1 of The Non-Domestic Rating (Collection and Enforcement) (Local Lists) (Regulations) 1989 (SI 1989/1058), as amended, that ratepayers eligible for the Extended Retail Discount are not asked to make an instalment in respect of 2021/22 for the three month period of 100% relief is available for. The Council shall provide an alternative installment arrangement for ratepayers which spreads the liability for the period from 1 July 2021 to 31 March 2022 over some or all of the remaining nine months of the year.
The cash caps
No cash caps will apply for the period between 1 April 2021 to 30 June 2021.
Under the cash caps, a ratepayer may only receive up to the following cash caps of Expanded Retail Discount in 2021/22 ignoring any relief for the period before 1 July 2021:
a. £2 million for ratepayers meeting the eligibility for the closed cash cap test set out in Annex B (subject to paragraphs 21-23), or b. £105,000 for all other ratepayers.
No ratepayer can in any circumstances exceed the £2 million cash cap across all of their hereditaments in England. Where a ratepayer eligible for the closed cash cap also occupies hereditaments which do not meet the criteria for the closed cash cap and the value of the discount on the closed hereditaments is less than £2 million then they may also claim the discount on other eligible hereditaments but only up to the cap of £105,000 in respect of those other eligible hereditaments. For example, such a ratepayer whose rate bill from 1 July 2021 onwards on hereditaments eligible for the closed cash cap is £1 million and also occupies other eligible hereditaments with a rates bill of £3 million is able to claim up to £1,105,000 in discount from 1 July 2021 onwards (£1million on their closed hereditament and then up to the £105,000 cash cap on their other eligible hereditaments).
Where a ratepayer has a qualifying connection with another ratepayer then those ratepayers should be considered as one ratepayer for the purposes of the cash caps. A ratepayer shall be treated as having a qualifying connection with another:
a. where both ratepayers are companies, and
i. one is a subsidiary of the other, or
ii. both are subsidiaries of the same company; or
b. where only one ratepayer is a company, the other ratepayer (the “second ratepayer”) has such an interest in that company as would, if the second ratepayer were a company, result in its being the holding company of the other.
In those cases where it is clear to the local authority that the ratepayer is likely to breach the cash caps then the authority should automatically withhold the discount. Otherwise, local authorities may include the discount in bills and ask the ratepayers, on a self-assessment basis, to inform the authority if they are in breach of the cash caps. Annex D of this guidance contains a sample cash cap ratepayer declaration, which local authorities may wish to use to discharge this responsibility.
Eligibility for the Closed Cash Cap (£2 million)
Ratepayers that meet the eligibility criteria for the closed cash cap will be ratepayers who for a chargeable day occupy one or more hereditaments whose use on the chargeable day would, based on the law and guidance applicable on 5 January 2021, have meant that the business or activity would have been mandated to close by the government.
For the avoidance of doubt, hereditaments which have closed due to the government’s response to coronavirus should be treated as occupied for the purposes of the closed cash cap.
If, under this eligibility test, a person would have been required to close its main, in-person service but could have adapted its business to operate takeaway, click and collect or online with delivery services, it will be considered closed and be eligible for the closed cash cap because its substantive business would have been mandated to close.
In cases where hereditaments would have remained open to provide services that can continue as they are exempt from the regulations (e.g. post office services, food banks) the ratepayer may still be eligible for the closed cash cap, because they would have been unable to provide their main in-person service.
The following hereditaments do not meet eligibility for the closed cash cap:
a. Hereditaments occupied by businesses and other ratepayers that would have been able to conduct their main service because they do not depend on providing direct in-person services from premises and can operate their services effectively remotely (e.g. accountants, solicitors).
b. Hereditaments whose occupiers may have chosen to close but not been required to.