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Calls to extend business rates relief for another year intensify after car dealers saved thousands in tax

Time 3 months ago

Ministers are in talks with the Treasury about extending the business rates relief beyond March.

The move, which last year helped thousands of car dealers save vast sums of money and prevented many from closure, would be a welcome relief to the industry.

Business Secretary Kwasi Kwarteng told MPs yesterday he is working with Chancellor Rishi Sunak on ‘what further support we can supply’, following calls to extend the business rates break beyond March.

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His ministerial colleague Paul Scully acknowledged firms have raised concerns over a ‘cliff-edge’ and also over fixed costs they have to deal with, adding: ‘All of which we recognise, and (we are) continuing our conversations with the Treasury.’

Labour accused Kwarteng of being ‘all mouth and no trousers’ and pressed for an extension to business rates relief and furlough.

It is thought further support for businesses will be announced by the chancellor in the Budget on March 3.

A more flexible furlough scheme is being considered as well as the business rates relief extension. The Federation of Small Businesses has called for the government to extend rates for another year to April 2022.

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Mike Jones, chairman of ASE Global and compiler of the Car Dealer Top 100 list of most profitable dealers, said extending the relief was ‘logical’.

He told Car Dealer: ‘Alongside the furlough scheme, rates relief has been vital to help retailers reduce costs when showrooms were required to close.

‘While I am expecting significant pent-up demand when we fully reopen, vehicle sales have taken a huge hit whilst the industry is required to only operate remotely.

‘Reducing costs is vital during this period and rates are normally a large fixed cost. In addition, it makes logical sense to me that the rates relief should continue for as long as the showrooms we pay the rates on are unable to welcome customers.’

Retailers, leisure and hospitality firms have not had to pay rates for the current financial year after the government launched a rates holiday at the onset of the pandemic.

However, the property tax is currently set to restart in April for the new financial year despite non-essential retailers, including car dealers, remaining shut due to lockdown restrictions.

Speaking in the Commons, Kwarteng said: ‘I’m in constant dialogue with the chancellor. We’re looking at the economy, the situation evolving daily, minute by minute almost, and we hope that we can provide the flexible support that we have done in the last year.’

Shadow business minister Lucy Powell earlier said: ‘I’ve listened to the Secretary of State’s (Kwasi Kwarteng) answers so far and I’m afraid he’s all mouth and no trousers, so let’s try again.

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‘Businesses face a £50bn bombshell in April, yet many in hospitality, retail and services won’t even be open by then. Councils are sending out business rate bills as we speak and difficult decisions are being made now.’

Kwarteng said a ‘flexible’ approach to financial support is needed to help firms.

He added: ‘I’m in regular contact with the chancellor, he has had a nimble approach and I look forward to engaging with him on what further support we can supply.’

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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