Budget 2021 Update – validating expanded retail discounts and identifying linked companies

You will be aware that the recent Budget announced that Expanded Retail Discounts would continue to apply in 2021-22 at 100% from 1 April 2021 to 30 June 2021, and at 66% for the remaining period from 1 July 2021 to 31 March 2022.

Cash Caps
Guidance released by MHCLG has confirmed that there will be no caps on the amount of relief that can be granted for the three months period at 100%, but that ‘cash caps’ would apply to the remaining nine months period at 66%.

From 1 July 2021, relief will be capped at £105,000 per business, or £2 million per business where the business is in occupation of a property that was required, or would have been required, to close on 5 January 2021. Additionally, the cash caps apply at a Group company level, meaning that holding companies and subsidiaries cannot claim up to the cash cap for each company, with the caps being applied at the Group level.

In cases where it is clear to the Local Authority that the ratepayer is likely to breach the cash caps from July to March then an Authority should automatically withhold the discount. Otherwise, Authorities may include the discount in bills and ask the ratepayer, on a self-assessment basis to inform the Authority if they are receiving the relief elsewhere and whether they will be in breach of the cash caps.

As the cash caps are ‘per business’ rather than ‘per ratepayer’, this presents obvious difficulties to Local Authorities in identifying businesses that are liable for business rates with multiple councils.

Validating relief entitlement and ratepayer details
HUB from Destin Solutions provides the most comprehensive database of business ratepayer information available with ratepayer details from 99% of local authorities, and also includes a Search function to identify ratepayers who are liable elsewhere.

In addition, when a ratepayer Search is undertaken a user is also provided with details of other holding and subsidiary companies that are part of the same company Group. This means a user can see when a ratepayer is part of wider company Group structure, where the cash cap applies to the Group as a whole, rather than to the individual company.

HUB has been in operation for 3 years and is already used by over 100 councils to validate relief entitlement and ratepayer information. With the introduction of the ‘cash caps’ in Expanded Retail Discount it is the perfect solution to check whether a ratepayer is liable for business rates elsewhere or part of a wider Group structure, thereby validating and verifying whether they are entitled to the 66% Expanded Retail Discount from July 2021 to March 2022.

For further information please contact peter.haywood@destin.co.uk

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