Budget 2021 – What does it mean for your Business?

Business Rates Information: Budget and Confirmation of the 2021/22 Business Rates Multipliers

Following the Budget, the Ministry of Communities Housing and Local Government have published their Business Rates Information Letter, confirming the Budget 2021 business rates measures.

At the Budget on 3 March 2021, the Chancellor announced that the Government would provide additional business rates support for eligible retail, hospitality, leisure,
and nursery businesses in England occupying a qualifying property.

As temporary measure for 2021/22 he announced that:

•The Expanded Retail Discount (2020/21) will be extended for three months for eligible properties, at 100% relief, uncapped, for the period 1 April 2021 to 30 June 2021.
•From 1 July 2021 to 31 March 2022, the Expanded Retail Discount would apply at 66% relief for eligible properties in the scheme, with a cash cap of £2m for businesses that were required to close as at 5 January 2021, and up to £105,000 for business permitted to open at that date.
• The Nursery Discount 2021 would also be extended for three months, at 100%, uncapped, for the period 1 April 2021 to 30 June 2021.
• From 1 July 2021 to 31 March 2022 the Nursery Discount would apply at 66% relief for eligible properties, with a cash cap of £105,000.
• For the Expanded Retail Discount 2021/22 and Nursery Discount 2021/22, businesses may choose to opt out of support by providing billing authorities notification of their request to refuse support, per eligible hereditament.

These changes will have effect for 2021/22. Local authorities will be expected to use their discretionary relief powers (under section 47 of the Local Government Finance Act 1988 as amended) to grant these discounts in line with the relevant eligibility criteria. Authorities will be compensated for the cost of granting the discount through a section 31 grant from Government. No new legislation will be required to deliver the scheme.

As a short-term measure, authorities may consider rolling forward their 2020/21 scheme into the first three months of 2021/22. Under regulations made under section 47 of the Local Government Finance Act 1988 authorities must give at least 12 months notice before varying a rate relief scheme the effect of which would have been to increase rate bills.

To ensure that the relief awarded for the initial three months meets the requirement of section 47 to give 12 months’ notice (which can only take effect from 31 March of a financial year) billing authorities may also wish to consider issuing a letter to ratepayers providing notification of the award of the extended relief to all affected ratepayers. This notification should highlight that the 100% relief only applies for the first three months of the financial year and that a further decision will be made in respect of the period 1 July to 31 March at 66% relief will apply to eligible ratepayers.

Authorities should also ensure that their scheme from 1 April 2021 includes the option for ratepayers to refuse the discount.

Confirmation of the Non-Domestic Rating Multipliers for 2021/2022

As set out in the Spending Review published on 25 November 2020, the Government has decided to freeze the business rates multipliers in 2021/22. The Government has laid the necessary legislation (the Local Government Finance Act 1988 (Non-Domestic Rating Multipliers) (England) Order 2021) to implement this freeze.

Following the approval by the House of Commons on 10 February 2021 of the Local Government Finance Report (England) 2021/2022, the Secretary of State has calculated the non-domestic rating multipliers for England for 2021/2022.

In accordance with the requirements of paragraph 6(1) of Schedule 7 to the Local Government Finance Act 1988 (inserted by paragraph 62 of the Local Government Act 2003), this Business Rates Information Letter provides details on the non-domestic rating multiplier and the small business non-domestic rating multiplier for England for 2021/2022.

For 2021/22, the values of the multipliers are:

• non-domestic rating multiplier: 51.2p (0.512)
• small business non-domestic rating multiplier: 49.9p (0.499)

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