The year-long business rates holiday in England has been extended for another three months, until the end of June 2021.
Eligible retail, hospitality and leisure businesses will then pay a third of their normal charge for the rest of the financial year.
A maximum discount of £2 million is available to non-essential retail firms that were forced to close on 5 January 2021 due to lockdown restrictions. Other eligible properties can get a discount of up to £105,000 per business.
The Treasury expects to see the "the vast majority of eligible businesses receiving 75% relief" from business rates in 2021/22.
Helen Dickinson, chief executive at the British Retail Consortium, said:
"The three-month extension will provide essential funding at this challenging time.
"Beyond this point, relief is capped at only £2m for closed businesses - a tiny fraction of their total liability.
"Without more funding, it is likely that many non-essential retailers will struggle under sluggish consumer demand and high COVID-19 costs."
Last year's 100% business rates holiday in England gave eligible businesses in the retail, hospitality and leisure sectors a tax cut worth £10 billion.
The Treasury expects the latest three-month extension and subsequent reduced rate to save those firms in England around £6bn in 2021/22.
Business rates multiplier freeze
Back in November, around the time we were expecting Autumn Budget 2020, it was announced in the Spending Review that the business rates multiplier was to be frozen for one year for 2021/22.
The multiplier is one part of the equation used to determine how much you will have to pay in business rates in any given tax year. Your rateable value is multiplied by your multiplier to work out your bill before any relief.
The Government sets two multipliers for each tax year.
The standard business rates multiplier, which applies if your rateable value is more than £51,000, remains at 51.2p. The small business rates multiplier is used if your rateable value is less than £51,000. This stays at 49.9p for 2021/22.
As a result, the Treasury said businesses in England can expect to save around £575m in total over the next five years.
‘Fundamental report' due in autumn
The Government is due to publish its "fundamental report of the business rates system in England" in the autumn.
This was originally due to be published last autumn, only for a second wave of COVID-19 to see it postponed until the spring.
Nothing materialised in last month's Spring Budget, although an interim report was published last week.
This forms the basis of what will be announced in the autumn, with talk already gathering pace on a new online services tax.
This might be levied on all goods sold online or may apply to online-only retailers in a bid to level the playing field with bricks-and-mortar retailers who pay business rates on their premises.
Dickinson added:
"The business rates system remains broken and it is vital that the ongoing business rates review delivers on its promise to reduce the burden on retail, which already results in store closures and job losses."
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