Further Emergency Funding Announcement via Business Rates

The Cabinet Secretary and First Minister have both confirmed that all the Barnett consequentials arising from the business support measures in England will be passed on to support businesses in Scotland.

There had been hope that rates relief would be extended to other sectors beyond the hospitality sector, including retail and leisure, but this is not the case.

Yesterday the Chancellor confirmed availability of an initial £330 billion of guarantees – equivalent to 15% of our GDP. This means any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan,

on attractive terms. And if demand is greater than the initial £330 billion this go further and provide as much capacity as required.

That support will be delivered through two main schemes:

  • to support liquidity amongst larger firms, a new lending facility with the Governor of the Bank of England to provide low cost, easily accessible commercial paper
  • to support lending to small and medium sized businesses, with the extending of the new Business Interruption Loan Scheme announced at the Budget last week, so that rather than loans of £1.2 million, it will now provide loans of up to £5 million, with no interest due for the first six months

Both of these schemes will be up and running by the start of next week.

Some sectors are facing particularly acute challenges. In the coming days the Secretary of State for Transport will outline a potential support package for specifically airlines and airports.

Following the changed medical advice yesterday, there are concerns about the impact on pubs, clubs, theatres and other hospitality, leisure and retail venues.

The Chancellor announced last week that for businesses in the retail, hospitality and leisure sectors, with a rateable value of less than £51,000, they would pay no business rates this year. Under the revised scheme, this will be extended to all retail, hospitality and leisure not withstanding the Rateable Value.

These businesses will have the opportunity for an additional cash grant of up to £25,000 per business – to help bridge through this difficult period.

That means every single shop, pub, theatre, music venue, restaurant – and any other business in the retail, hospitality or leisure sector – will pay no business rates whatsoever for 12 months, and if they have a rateable value of less than £51,000 they can now get a cash grant as well.

Local authorities in England will be fully compensated for the costs of these measures, and the devolved administrations will receive at least £3.5 billion in additional funding as a result to provide support to businesses in Scotland, Wales and Northern Ireland.

Fiona Hyslop, the Cabinet Secretary for the Economy, gave the ministerial statement today confirming that the Scottish Parliament will replicate the above measures being introduced in England.

This will include:

  • Freezing the rate poundage rate at 2019/2020 levels
  • 100% rates relief for 12 months for all retail, leisure & hospitality subjects as outlined above – ‘no rateable value ceiling’
  • £10,000 grant available to all subjects that currently receive Small Business Rates Relief or Rural Relief
  • £25,000 grant available to leisure, hospitality subjects between rateable value £18,000 to rateable value £51,000

The Cabinet Secretary did confirm that Finance Depts will be advised to look favourably on requests from business for payment deferrals for a fixed period but the full relief as outlined above will not extend beyond the property types described above. This is unfortunate.

The Finance Secretary advised that the relief will be implemented automatically by the Finance Departments as from the 1 April 2020 being reflected on the bills from that date.

It is unclear at this time if the rates relief will be subject to State Aid restrictions where there is currently a ceiling of 200,000 Euros (approximately £175,000) which may affect the larger hotels and leisure complexes. Though it is indicated that the EU may loosen the ties on state aid due to the emergency of the situation. These regulations are still in place for the remainder for 2020.

Previously it should be noted Transitional Relief on hotels was only available on properties below £1.5 million, which conveniently omitted Donald Trump’s golf and leisure complexes in Scotland!
It would appear this rates scheme has no such ‘ceiling’.

There are many Appeals still to be finalised from the 2017 Revaluation and these will still proceed. If there is a reduction negotiated in the rateable value there will be a reimbursement of overpaid rates backdated to the 1 April 2017. The above rates package will not affect this process.
For full details on the types of Rates Relief available, please visit our website –

Please note the rates relief proposed is on your actual rates liability and is not a reduction in rateable value. The rateable value  will remain unchanged until the next Revaluation in 2022 and form the base for future liability when this relief comes to an end.

If you carry out any alterations to a property during the coming year, which leads to an increase in rateable value, this should still be appealed within the 6 month timescale. When the relief comes to an end this will not permit backdated appeals to be lodged on changes which occurred during this period.

If in any doubt please contact the Graham + Sibbald Rating team.