New £1.5 billion business rates relief fund will benefit wholesalers

Wholesalers that have been adversely affected by the COVID-19 crisis will finally be able to apply for business rates relief following the announcement by the Government of a new £1.5 billion fund.

Local authorities will use their knowledge of local businesses and the local economy to make awards, which will be available to businesses hit hard by the pandemic but previously left out of the original £16 billion business rates relief fund that benefited the hospitality, retail and leisure sectors.

The Government has said that it will work with local government to enable ratepayers to apply “as soon as possible this year”.

Business rates are devolved so the devolved administrations will receive an additional £285 million through the Barnett formula. This comprises £145 million for the Scottish Government, £90 million for the Welsh Government, and £50 million for the Northern Ireland Executive.

FWD chief executive James Bielby commented: “After months of making the case, we welcome recognition of the intrinsic value of foodservice wholesalers to UK prosperity.”

Illustrative case study from HM Treasury
Food wholesaler operating from a warehouse outside of London:

  • prior to the pandemic sold exclusive to restaurants within a region
  • since the pandemic, turnover reduced nearly to nil
  • large warehouse where social distancing can be observed without an impact on operations.
  • rateable value – £95,000
  • size – 5,200m2
  • under the MCC regime, the businesses would unlikely have been deemed to have suffered an MCC and so would have received no reduction
  • under the new proposed approach the business would likely fall within scope given the economic impact on their business
  • for illustrative purposes, a 15% relief would save the business £7,300

Commenting on the launch of the new fund, chancellor Rishi Sunak said: “Providing this extra support will get cash to businesses who need it most, quickly and fairly. By providing more targeted support than the business rates appeals system, our approach will help protect and support jobs in businesses across the country, providing a further boost as we reopen the economy.”

For more information:

Tel: FWD (01323) 724952

Published Date: March 26, 2021
Category: Wholesale Industry News