Hundreds of millions of pounds in business rates relief has not been paid back by ‘essential retailers’ which remained open during lockdown.
Since April 1 2020 all UK retailers have not been required to pay business rates as part of an unprecedented support package which has collectively saved the industry billions.
Between April 1 2020 and March 31 2021, £3.03 billion of the collective business rates holiday has been given to essential retailers, representing more than a quarter of the total cost of rates relief in England according to figures from Altus Group.
Many of the UK’s largest retailers including the Big 4 supermarkets opted to repay the business rates relief as a gesture of goodwill, with many of them actually seeing an increase in trading during lockdown as they were allowed to remain open.
According to Altus Group, 14 major retailers have paid back £2.16 billion in business rates relief, meaning £870 million has not yet been paid back.
In England, the tax relief will continue until the end of June, before becoming a reduced discount until the end of March 2022. In Wales and Scotland, the business rates holiday was extended for another 12 months.
This three-month extension is expected to provide a further £758 million tax break for essential retailers, but around £490 million has been refused so far under the new opt out provision.
“Some parts of the retail sector thrived during the pandemic and the rates holiday was the icing on an already very sweet cake,” Altus Group’s UK president of property tax Robert Hayton said.