COVID-19: ‘Catastrophic blow’ as pandemic business rates discounts denied | Business News

Thousands of companies are to be refused business rates discounts claimed because of the pandemic in what has been described as a “catastrophic blow”.

The Treasury stated that it could legislate to throw out the claims – which it has been estimated might have value it £5bn – and can as a substitute arrange a £1.5bn fund to assist the worst affected firms.

Supply chain companies which have seen commerce collapse, however have missed out on £16bn in business rates reduction for retail, hospitality and leisure sector operators, must be amongst these to obtain the help.

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However taxpayer assist can be denied to others, with the federal government giving the instance of a metropolis centre office-based agency which can have seen many workers working from residence and property values hit however in any other case not suffered a huge impact.

The authorities stated 170,000 companies had utilized for discounts on their business rates payments arguing that the COVID-19 disaster represented a “material change of circumstances”.

But it stated these appeals might have meant “significant amounts” of taxpayer money going to firms which were capable of function usually.

They would additionally disproportionately profit sure areas such as London if that they had been allowed to go forward, the federal government stated.

Instead, the Treasury is allocating a £1.5bn pot to native authorities “based on the stock of properties in the area whose sectors have been affected by COVID-19”.

Real property adviser Altus cited one estimate suggesting rates appeals might have value the federal government as much as £5bn.

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Chancellor Rishi Sunak stated: Our priority throughout this crisis has been to protect jobs and livelihoods.

By offering extra focused assist than the business rates appeals system, our method will assist defend and assist jobs in companies throughout the nation.”

But Robert Hayton, UK president of property tax at Altus, said: “This can be a catastrophic blow for companies.”

He said firms had “spent the final year lawfully pursuing business rate changes solely to have their statutory authorized proper ripped from them to permit the federal government to roll out an entirely insufficient scheme which will not ship sufficient business rates assist”.

CBI chief economist Rain Newton-Smith said the new £1.5bn fund would help “forgotten provide chain companies” that had been hit indirectly by restrictions.

But she added: “Other companies whose revenues have been onerous hit by the disaster will definitely be extremely pissed off that their appeals for discounts can be null and void now.”

The government said councils would “use their data of native business and the native economic system” to distribute the new pot of money.

It argued that relief should be provided to sectors that have suffered most economically rather than on the basis of falls in property values.

The Federation of Small Businesses welcomed the new money to help the likes of wholesalers, suppliers and brewers but said it was “essential” that it ought to attain people who want it most.

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