£500m Business Rate Ruling: Can Rebate Save Offices?
White-collar firms in the UK have been thrown a lifeline after an interim ruling by the Valuation Office Agency could save UK businesses £481 million. The decision means that offices who appealed bills for business rates will get a quarter of the cost back in the form of a rebate.
The move comes after Chancellor Rishi Sunak allowed a year-long exemption from business rates for various businesses, including those in the retail, hospitality and leisure sectors.
But office-based businesses were left off the list. This left large swathes of the UK economy, including in the crucial banking, technology, and creative industries faced with big bills for offices that were sat virtually empty during 2020.
White-collar Recovery Potential
With workers either furloughed or urged to work from home, businesses had been faced with a steep bill despite a huge squeeze on revenues for many, as the reality of COVID-19 bit.
In all, around 150,000 businesses around the UK appealed the decision and, as a result, an agreement by the treasury to knock a quarter off bills for businesses has been reached – although this took weeks to negotiate.
The move will no doubt be welcomed by a white-collar sector that’s desperately struggling into recovery – and likely now facing another severe set of headwinds following the recent resurgence of coronavirus infection rates in the UK.
An Interim Measure
The rebate is only an interim measure, however. Clearly, the business sector is hoping for more, but the Valuation Office Agency is keen to point out that the initial rebate is very much an interim measure and that the assessment and negotiation of the taxation process is an ongoing matter.
“Understanding the impact of the ongoing pandemic on rateable values is a complex legal and valuation issue,” said a Valuation Office spokesperson. “We are working to resolve these cases as quickly and efficiently as we can.”
Not all businesses that have been exempt from rates have been allowed to remain so: supermarkets were initially included in the rate exemption, but have been one of the few areas of the economy not negatively impacted by the coronavirus pandemic.
However, Tesco, Morrisons, Sainsbury’s, Aldi and Lidl have agreed to pay back a total of almost £2bn following criticism from politicians.