CINEMAS, pubs and restaurants in England have been thrown a much-needed lifeline as business rates have been scrapped for 12 months, chancellor Rishi Sunak revealed today.
The move will apply to all businesses in the hospitality and leisure sectors regardless of their rateable value.
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It sees an extension to the government's Budget announcement, which already saw it axe business rates for the 2020/21 financial year for firms with a rateable value below £51,000.
Businesses in the retail, hospitality and leisure sectors, with a rateable value of between £15,000 and £51,000 can also now apply for an additional cash grant of up to £25,000 per business.
In addition, Mr Sunak said businesses in general that need access to cash to pay their rent, staff salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on "attractive terms".
This loan pot initially stands at £330billion and will be available from next week, but could increase if needed.
Plus, 700,000 of the smallest businesses that had been offered £3,000 cash grants in the Budget will see this grant increase to up to £10,000.
The government has also announced it is changing planning permission to allow pubs and restaurants to operate as takeaway and delivery services from tomorrow.
Mr Sunak had already said in the Budget that a promised business rate discount of £1,000 for small pubs with a rateable value of below £100,000 would be increased to £5,000 for this year.
The Treasury also confirmed that government advice to avoid pubs, clubs and theatres is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place.
The government has been under pressure to help struggling companies after Boris Johnson yesterday told millions of people to avoid going out, and others to stay inside their homes for 12 weeks.
Only today we reported how up to 800,000 small businesses could be at risk of going under as many won't have insurance cover.
There are 5.8million small businesses in the UK, according to the Federation of Small Businesses (FSB), and around 800,000 in the retail, entertainment and recreation sector.
FSB national chairman Mike Cherry had warned that many of these firms, which employ 6million people, have taken a "massive hit" because of the new social distancing measures.
Meanwhile trade body the British Beer and Pub Association (BBPA) said thousands of pubs, and hundreds of thousands of jobs "will be lost in days" without government action.
Commenting on today's news, research firm Capital Economics said: "Overall, this is a pretty big package alongside a credible commitment to do whatever is necessary to support the economy no matter the cost.
"With policymakers acting quickly and working closely together, this raises the chances that, beyond the huge hit to GDP that is likely in the second quarter of the year, a prolonged economic slump will be avoided."
Simon Rothenberg at leading accounting and tax advisory firm Blick Rothenberg said: "The chancellor's further announcement that business owners can walk into a bank on Monday and speak to a manager about the business loan support is very encouraging.
"But will the banks be able to be open given current and predicted future advice?"
What is a firm's rateable value?
The rateable value of a small business in England is based on an estimate of the rent the property could have commanded on April 1, 2015, according to accountancy firm HW Fisher.
This was decided by the government’s Valuation Office Agency and is due to be revalued on April 1, 2020.
The estimated rent is then roughly halved to give the business rates payable.
HW Fisher says the business rate per square metre could easily be £800 a year in Mayfair, for example, and £100 (or less) in Newcastle Upon Tyne.
Rates relief is handled differently in Scotland, Wales and Northern Ireland.
Mr Sunak says these countries will receive at least £3.5billion in additional funding to help businesses in Scotland, Wales and Northern Ireland.
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