Asked by: Christopher Chope (Conservative - Christchurch)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to allow the backdating of eligibility for access to covid-19 business support based on rateable value in cases where the Valuation Office Agency has backdated a reduction in rateable value to before the pandemic in response to an appeal made before the covid-19 outbreak but only determined in November2021; and if he will make a statement.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
To ensure payments could be made quickly and efficiently to businesses, eligibility for COVID-19 business grants was linked to the business rates system and a property’s rateable value.
The £51,000 threshold for the Small Business Grant Fund (SBGF) and the Retail, Hospitality and Leisure Grant Fund (RHLG), which both closed in August 2020, was based on the existing small business rates multiplier. This served as an established definition that local authorities could use to quickly make payments to businesses that were less likely to have sufficient cash reserves to meet their fixed costs. However, as the pathway of the virus evolved, the economic impact on businesses changed and the Government responded by adapting the scope and qualifying criteria for various support schemes. In the case of grants, business premises with a rateable value of over £51,000, and in the most impacted sectors, were eligible for the grant schemes introduced from August 2020. From August 2020 to July 2021, businesses have been able to benefit from the Local Restrictions Support Grant (LRSG), a pro-rata grant payment of up to £3,000 a month. This is in addition to the Closed Business Lockdown Payment, a one-off payment of up to £9,000, and a Restart Grant of up to £18,000.
The guidance for local authorities for the grant schemes stipulated that any changes to the rating list after the date in which a grant scheme started, including changes which have been backdated to this date, should be ignored for the purposes of eligibility. Local authorities were not required to adjust, pay or recover grants where the rating list was subsequently amended retrospectively. This means that businesses whose rateable value was over the threshold of £51,000 but has since been reduced will not be eligible for the SBGF or the RHLGF, nor will they have to repay the more generous grants they subsequently received between August 2020 and July 2021.
The rateable value of any non-domestic property is intended to represent the annual rent a property would achieve if let on the open market at a valuation date which is set in law. All non-domestic properties are assessed on this basis by the Valuation Office Agency in England, independently of central Government.