Business Rate relief for Storm Damage - Jan 2017
Storms Desmond and Eva have had a devastating impact across the North of England. Countless commercial properties have been flooded leaving many business owners unable to trade yet are still liable for Business Rates. There has been understandable concern from the business community regarding this, particularly whilst properties aren’t fit for occupation.
The Department of Local Communities and Government have recently published details of assistance available to business owners and it can be broken down into two broad areas: Business Rates Relief Scheme and The Business Support Scheme.
The key details are:
The Business Support Scheme
The Business Support Scheme grants £2,500 per business reported as flooded. This grant goes direct to the local Council & is then redistributed at their discretion. It is interesting to note that the Government’s guidance explicitly states that “the priority should be direct grants to small and medium-sized businesses that were flooded to help them recover”.
The scheme not only covers businesses directly impacted by flooding but also businesses that are indirectly impacted. For example where a business now has no/highly restricted access to premises for themselves, their customers and their suppliers.
Business Rates Relief
Who is Eligible?
Properties eligible for relief are those that have been flooded (in whole or in part) and which has resulted in business activity undertaken at the property being adversely affected. This only applies to properties with a rateable value of less than £10 million.
Please be aware though that in considering whether the business activity has been adversely affected, Local Authorities will consider the impact of the flooding in the full context of all business activities. Very small or insignificant impacts will be ignored. It is a question of fact and degree and each case will have its own particular set of circumstance.
What relief is available?
100 per cent Business Rates rate relief for a minimum of three months or until the business restarts trading from the property, if longer.
What if my property has been flooded more than once?
Where this has occurred and business activities are adversely impacted only one period of 3 months relief will be funded and should be applied from the first date on which the above criteria were met.
What if the property was empty and not trading?
The scheme does not cover relief for any hereditament which was empty at the time it was flooded as there was no business activity on the premises at the time. Where a hereditament becomes empty after the flood then it will receive the normal 3 or 6 months (as applicable) empty property rate free period or will continue to receive the balance of the flooding relief.
What about properties removed from the rating list after flooding?
Seriously damaged property may be removed from the rating list. When a property is removed from the rating list the ratepayer is not liable for business rates. Once the property returns to the list it may be eligible for any remaining period of flood relief. For example, a property that was taken out of the list for a month would be eligible for a minimum of two months flood relief.
I’m in an Enterprise Zone – how does this affect relief?
Where a property is eligible for Enterprise Zone relief, that relief should be granted and this will be funded under the rates retention scheme.
If a property in an Enterprise Zone is not eligible for Enterprise Zone relief, or that relief has ended, Flooding Relief may be granted in the normal way.
Is there any assistance outside of Business Rates Relief?
In short – yes. Firstly, Councils may use their discretionary powers to offer further discounts outside this scheme (and under the rate retention scheme, 50 per cent of the cost would be locally funded and 50 per cent funded by central government). However, if and when this is applied is solely at the discretion of the local council.
In summary, it’s clear that there is assistance available, how easy it will be for business owners to access this is more of an unknown. It is a positive step that the Local Authorities have been granted the power to provide further assistance. However, as 50% of this cost would be financed by the Local Authorities itself it would be surprising if this additional help amounted to anything significant.