George Osborne said in last year’s Autumn Statement that pubs with a rateable value of less than £50,000 will get a rebate of £1,000 for the next two years.
However, the relief is subject to European State Aid law, which governs that individuals are only entitled to claim €200,000 (c£160,000) worth of ‘de minimus’ relief over a rolling three-year period. Other relief subject to the law includes small business rate relief, flood relief and enterprise zone relief. In cases where businesses are required to apply for the relief, rather than it being granted automatically by local councils, individuals are being asked to sign a declaration that receiving the aid means they will not fall foul of State Aid law.
Jerry Schurder, head of rating at property consultancy Gerald Eve, said he has “a number of clients” affected by this restriction but it is “not well-publicised”.
'Stifled by red tape'
“It’s just a mess frankly and massively unhelpful,” he told the PMA. “These announcements would provide a genuine benefit, but only if companies can access the relief they’re entitled to and can do so without being stifled by masses of red tape.
“Unfortunately the Government has chosen to deliver these sorts of relief as discretionary [to each council]. If it was a mandatory relief it wouldn’t fall foul of state aid rules.”
Colliers International head of rating John Webber said some local authorities are granting the relief automatically, which means operators will then have to return the money, “causing more admin headaches than applying for it in the first place”.
“Effectively businesses would reach [the limit of state aid] pretty quickly if you had relief from other areas. It’s a bit of a dog’s dinner,” he added.
'Frustrating'
However, Michael Yass, principal at MY Chartered Surveyor, said although it would be “frustrating” for a multiple operator to not receive relief on all of its properties where they have rateable values below £50,000, “it’s still relief they wouldn’t otherwise be receiving”.
A spokesperson for the Department of Communities & Local Government said: “The £1,000 Business Rate Relief is aimed at smaller shops, pubs and restaurants which are not likely to be affected by state aid limits.”