Retail Discount

The Chancellor has recently announced that 100% retail discount will be available to qualifying hereditaments for 2020-21. This discount will be expanded to include hospitality and leisure properties. We are awaiting further guidance on this and will publish the details as soon as this is available.

Properties which will benefit from the Retail Discount

For 2019-20, properties that benefitted from the retail discount were occupied hereditaments with a rateable value of less than £51,000, that were wholly or mainly being used as shops, restaurants, cafes and drinking establishments.

For 2020-21, the Chancellor announced that he would expand the retail discount to include hospitality and leisure properties. He also announced that the discount will be 100% off the rates bill irrespective of the rateable value.  We are awaiting further government guidance on this and will update our website as soon as this is received.

1. Hereditaments that are being used for the sale of goods to visiting members of the public:

  • Shops (such as: florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets, etc)
  • Charity shops
  • Post offices
  • Furnishing shops/ display rooms (such as: carpet shops, double glazing, garage doors)
  • Car/ caravan show rooms
  • Second hand car lots
  • Petrol stations
  • Garden centres
  • Art galleries (where art is for sale/hire)

2. Hereditaments that are being used for the provision of the following services to visiting members of the public:

  • Hair and beauty services (such as: hair dressers, nail bars, beauty salons, tanning shops, etc)
  • Shoe repairs/ key cutting
  • Travel agents
  • Ticket offices (such as theatre)
  • Dry cleaners
  • Launderettes
  • PC/ TV/ domestic appliance repair
  • Funeral directors
  • Photo processing
  • Tool hire
  • Car hire

3. Hereditaments that are being used for the sale of food and/ or drink to visiting members of the public:

  • Restaurants
  • Takeaways
  • Sandwich shops
  • Coffee shops
  • Pubs
  • Bars

To qualify for the discount the hereditament should be wholly or mainly being used as a shop, restaurant, cafe or drinking establishment. In a similar way to other reliefs (such as charity relief), this is a test on use rather than occupation. Therefore, hereditaments which are occupied but not wholly or mainly used for the qualifying purpose will not qualify for the discount.

For 2020-21, the Chancellor announced that this discount would be expanded to include hospitality and leisure properties. We will provide further details of the types of businesses that will be covered under this as soon as the government guidance is available.

The list set out above is not intended to be exhaustive as it would be impossible to list the many and varied retail uses that exist. There will also be mixed uses. However, it is intended to be a guide for authorities as to the types of uses that Government considers for this purpose to be discount.

The list below sets out the types of uses that the Government does not consider to be retail use for the purpose of this discount.

1. Hereditaments that are being used for the provision of the following services to visiting members of the public:

  • Financial services (such as: banks, building societies, cash points, bureaux de change, payday lenders, betting shops, pawn brokers)
  • Other services (such as: estate agents, letting agents, employment agencies)
  • Medical services (such as: vets, dentists, doctors, osteopaths, chiropractors)
  • Professional services (such as: solicitors, accountants, insurance agents/ financial advisers, tutors) − Post office sorting offices

State Aid

State Aid law is the means by which the European Union regulates state funded support to businesses. Providing discretionary relief to ratepayers is likely to amount to State Aid. However, Retail Discount Relief will be State Aid compliant where it is provided in accordance with the De Minimis Regulations (1407/2013). The De Minimis Regulations allow an undertaking to receive up to €200,000 of De Minimis aid in a three- year period (consisting of the current financial year and the two previous financial years).

Local authorities should familiarise themselves with the terms of this State Aid exemption, in particular the types of undertaking that are excluded from receiving De Minimis aid (Article 1), the relevant definition of undertaking (Article 2(2)5) and the requirement to convert the aid into Euros. To administer De Minimis it is necessary for the local authority to establish that the award of aid will not result in the undertaking having received more than €200,000 of De Minimis aid. Note that the threshold only relates to aid provided under the De Minimis Regulations (aid under other exemptions or outside the scope of State Aid is not relevant to the De Minimis calculation).

The UK is scheduled to leave the EU on 29 March 2019. If there is an Implementation Period, the State Aid rules will continue to apply as now and will be subject to control by the EU Commission as at present. If the UK leaves the EU without a negotiated Withdrawal Agreement, the Government has announced its intention to transpose EU State Aid rules into UK domestic legislation, with only technical modifications to correct deficiencies with the transposed EU law to ensure the regime operates effectively in a domestic context. Local authorities should therefore continue to apply State Aid rules, including De Minimis, to the relief for 2019/20 and 2020/21.

Detailed State Aid guidance can also be found on the State Aid page of the GOV.UK website.

If your property meets the above criteria and you have not received the retail discount, please complete the application form below, and return it to the address provided.

Application for Retail Discount