UNITED KINGDOM – June 2020

CONTENTS SHOPPING CENTRE GIANT INTU ENTERS ADMINISTRATION ...... 2 BUSINESS WASTE: THE FORGOTTEN EXPENSE ...... 4 KEY POINTS FROM THE NEW CODE OF PRACTICE FOR THE COMMERCIAL PROPERTY SECTOR PUBLISHED BY THE GOVERNMENT IN RESPONSE TO COVID-19 ...... 5 JAVID URGES REORGANISATION AND DEVOLUTION POST-COVID ...... 6 ‘REPLACE BUSINESS RATES WITH ONLINE SALES TAX’ ...... 7 UK DEBT IS BIGGER THAN ECONOMY FOR FIRST TIME SINCE 1963 ...... 7 THE FINANCIAL RISK AND RESILIENCE OF ENGLISH LOCAL AUTHORITIES IN THE CORONAVIRUS CRISIS ...... 9 COURT OF APPEAL REFUSES VALUATION OFFICE AGENCY PERMISSION TO APPEAL RULING ON RATEABLE VALUATION OF COUNCIL-RUN MUSEUM ...... 10 IS COVID-19 A “MATERIAL CHANGE OF CIRCUMSTANCES” WHICH WOULD JUSTIFY A TEMPORARY REVALUATION OF BUSINESS RATES? ...... 12 RETAIL FACES AN UNEMPLOYMENT TICKING TIME BOMB ...... 13 MPS BACK WHOLESALERS' CALL FOR BUSINESS RATES RELIEF ...... 13 CORONAVIRUS: RESTAURANT BOSSES IN PLEA TO PM FOR HELP ...... 14 NEVER WASTE A CRISIS – HOW CORONAVIRUS GALVANISED RETAIL ...... 16 BUSINESS RATES GRANT MONEY COULD BE CLAWED BACK, SAYS IFS ...... 19 UK MANUFACTURERS CALL FOR BUSINESS RATES BREAK TO AID RECOVERY ...... 20 'THERE'S A VOLCANO, THAT UNLESS BORIS WAKES UP TO IT NOW, WILL GO BANG' ...... 21 BORIS JOHNSON URGED TO TAX GIANTS LIKE AMAZON TO HELP AILING SHOPS POST-LOCKDOWN ...... 25 HOW U.K.’S $168 BILLION VIRUS AID PACKAGE IS BEING ROLLED OUT...... 26 ENGLAND ...... 29

BUSINESS RATES REVOLT: LONDON COMPANIES REFUSE TO COUGH UP DURING LOCKDOWN ...... 29 SADIQ KHAN ANNOUNCES £500MILLION CUTS PLAN TO LONDON UNDERGROUND, MET POLICE AND LONDON FIRE BRIGADE ...... 32 OPENING CERTAIN BUSINESSES AND VENUES IN ENGLAND FROM 4 JULY 2020 ...... 33 WESTMINSTER DENIES FIRMS BUSINESS RATES RELIEF FOR EMPTY OFFICES DURING LOCKDOWN ...... 34 EXETER CITY COUNCIL SECURES LANDMARK RULING AT ROYAL COURTS OF JUSTICE ...... 35 CORONAVIRUS: TOILET FEARS HAMPER HIGH STREET RETURN FOR SOME ...... 37 CORONAVIRUS: ENGLAND'S COUNCILS 'FACE LARGE-SCALE' CUTS TO SERVICES ...... 40 FURTHER SUPPORT NEEDED TO SAVE HIGH STREET RETAILERS, SAYS SPORTS DIRECT CFO...... 41 CORONAVIRUS: SPORTS DIRECT CFO CALLS FOR MORE SUPPORT FOR AILING RETAILERS ...... 42 AFTER COVID WE'RE GOING TO NEED A SERIOUS URBAN REGENERATION PLAN ...... 43 BUSINESS RATES FIRM THREATENS CLIENTS WITH WINDING-UP ORDERS AND BANKRUPTCY ...... 44 NORTHERN IRELAND ...... 46

PROPERTY VALUATION IN AN UNCERTAIN MARKET...... 46 SCOTLAND ...... 48

NORTH-EAST BOSSES WARN OF JOB LOSSES AND COLLAPSE OF FIRMS AS SCOTTISH GOVERNMENT REJECTS BUSINESS RATES RELIEF APPEAL ...... 48

International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles. P a g e | 2

SCOTTISH BAILOUT PUTS TRUMP'S GOLF RESORTS IN LINE FOR £1M TAX REBATE ...... 49 MORE SUPPORT FOR SMALL BUSINESSES ...... 50 WALES ...... 51

BIRA WELCOMES BUSINESS RATES REVALUATION POSTPONEMENT IN WALES ...... 51 CORONAVIRUS: CALL FOR £250M RECOVERY FUND IN WALES ...... 52

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Shopping centre giant Intu enters administration The owner of some of the UK's biggest shopping centres, Intu, has called in administrators.

The firm, which owns the Trafford Centre, the Lakeside complex, and Braehead, said earlier it had not reached an agreement in financial restructuring talks with its lenders.

Its centres will stay open under administrators KPMG.

The company said shares listed on the London and Johannesburg stock exchanges had been suspended.

The significance of Intu's collapse "cannot be understated," said Richard Lim, chief executive of Retail Economics.

Intu collapse: What went wrong for the retail giant?

The coronavirus lockdown is speeding up a trend towards buying more consumer goods online, he said. He estimates 50% of workers normally can't receive parcels at work.

'Too much retail space'

But with many people spending most of their time at home, and car journeys to shopping centres discouraged, many of those people are now ordering via websites.

How landlords should react is a difficult question and there won't be a simple solution that will work for every mall, he says.

Particularly hard-hit will be shops at large office developments like Canary Wharf if more people are working from home.

"It's going to be a really, really tough challenge. There's no getting away from the fact we have too much retail space."

While more retailers and shopping centres are likely to close, landlords can offer shorter, flexible leases, he said, to attract retailers with new ideas.

The firm said it had appointed three administrators at the KPMG accountancy firm and that "the appointment is expected to become effective shortly".

The company was one of the UK's biggest shopping centre groups, with 17 centres in the UK.

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In Nottingham, where it owns the Victoria Centre, shoppers said they hoped stores would remain open.

One worker at the local Boots, who didn't give her name, said she didn't know yet whether her shop will be affected. "I think we'll all be worried," she told the BBC.

Intu had been struggling even before the coronavirus outbreak with about £4.6bn worth of debt.

Intu has a hugely complicated corporate structure.

Although the company's gone into administration, its shopping centres haven't.

They are separate companies owned by a myriad of banks and lenders.

And they've now got the keys. Shoppers aren't likely to notice any real difference in the short term. But buyers will be sought.

The jewel in the crown is Manchester's Trafford Centre, followed by Lakeside.

But Intu's less-popular malls will prove more difficult to sell, especially given the turmoil in retail right now.

Intu is a property business which basically put all its eggs in one basket, buying more malls as shopping habits changed, and it ended up with way too much debt.

Coronavirus then compounded its problems.

Intu's spectacular collapse also highlights the pressures retail landlords are now under given the big slump in rental income from their tenants.

According to its annual report, published in March, its debts were worth 68% of its assets, a jump from 53% a year earlier.

It told investors earlier this month that it expected rent collected for 2020 to drop to £310m from £492m a year earlier.

According to Property Week, landlords collected just 18% of commercial rents for the three months to 24 June.

As rent payments dried up and property values fell, its prospects declined.

The company employs 2,500 people and its wider supply chain supports about 130,000 jobs, which will now be in doubt.

Intu's centres were partially shut during the coronavirus lockdown, with only essential shops remaining open.

The company had about 60% of shopping centre staff and about 20% of head office employees on furlough.

Investors in the company's shares will be nursing heavy losses.

Its shares traded as cheaply as 1.2 pence each early on Friday, valuing the company at £16m. It was worth as much as £13bn in 2006.

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Business Waste: The Forgotten Expense Starting a business can be exciting and exhausting in equal measure, and one stress that can come back to haunt fledgling businesses is rubbish.

Often overlooked in the thrusts of a businesses beginning, waste can quickly become an unexpected and costly problem.

Many new and inexperienced company owners are surprised to discover that waste services are not included within their business rates, with some only realising when they are met with warnings or fines.

Business rates are a tax for commercial property calculated on the rateable value of the premises.

The rates are applicable to most non-domestic property such as offices, shops, factories and holiday rental homes or guest houses.

Some areas, like agriculture and worship, can benefit from rate relief, and properties with a rateable value below £12,000 do not have to contribute.

Confusion can arise for those with new ventures when they learn that, unlike domestic council taxes, the charge for their business does not include waste disposal services.

Contrary to residential council tax, which is the main source of local government income, only approximately 40% of the money gained from business rates are retained by councils, with the rest heading to central government.

And, although the tax goes some way to funding community services such as road maintenance, social care and preserving parks and open spaces, it can come as a shock to businesses to learn they are ultimately the beneficiaries of very little, especially not waste collections.

The reasons for business rates not including services such as waste management are due to the calculations of rateable value.

Given different trades tend to produce different amounts of rubbish, and waste production varying drastically from business to business, it is both impossible and unfair to include disposal services within business tax.

How does it work?

Businesses are therefore legally required to use a waste management service.

It is a business owners Duty of Care, a legal responsibility, to ensure the production, storage, transport, and disposal of waste is done with environmental harm kept to a minimum.

The Duty also covers waste that has left business premises, with business owners still legally responsible even at, and past, the point of disposal.

A business must complete a waste transfer note between themselves and their waste management provider which is valid for two years.

This acts as a receipt should council enforcement officers or the Environment Agency ask, and if a transfer note is not provided, a business may be held responsible should waste not be disposed of properly and safely.

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Last year, a company in Birtley was fined £1,400 for failure to produce a waste transfer note when asked to do so, and a Shoreham-based builder faced a £1,000 fine in February for fly-tipped rubbish despite claiming he had paid a service to appropriately dispose of it.

It is therefore integral for businesses to select a licensed, trusted waste management service to deal with the safe and proper disposal of commercial waste.

Key points from the new Code of Practice for the commercial property sector published by the government in response to COVID-19

A much anticipated 'Code of Practice for commercial property relationships during the COVID-19 pandemic' was published at the end of last week by the government, just in time to meet the next quarter day on 24 June. The Code sets out best practice guidelines for landlords and tenants in relation to treatment of rent and service charge arrears and new sums falling due as the economy begins to restart and throughout the subsequent recovery period. The Code applies across the UK and to all commercial property sectors, from offices, retail and industrial through to hospitality, leisure, ports and even the agricultural sector (albeit with an acknowledgment that a different legal framework is in play for agricultural tenancies).

The key takeaways are:

 the Code is not a statutory instrument or legally binding but it is endorsed by a number of leading organisations and representative bodies within the sector, including the British Chamber of Commerce, the British Property Federation and the British Retail Consortium, all of whom have been instrumental in its launch;  the Code makes clear that tenants who are in a position to pay in full should do so. Tenants who are unable to pay in full should seek agreement with their landlord to pay what they can;  both landlords and tenants are called upon to act reasonably, work together collaboratively, use all available government resources and to renegotiate rent where applicable in order to find mutual solutions to COVID-19 shocks;  a variety of potential options are set out which the Code encourages parties to consider in respect of rent arrears and future payments. Landlords should be prepared to make concessions on rent payments where they can and to provide clear reasoning for the refusal of concessions;  where landlords are being asked to agree to concessions, the Code suggests that tenants should be prepared to provide evidence to support and justify any requests and also to make reasonable concessions of their own (for instance, offering reversionary leases or extended terms in return for rent deferment);  service charges should be reduced where lack of use of a property during the lockdown period has lowered the costs incurred by the landlord;  any reduction in service charge is to be passed on to tenants as soon as possible, notably ahead of the conventional year end reconciliation, in order to improve cash flow;  the Code recognises that additional service charge costs may be incurred in complying with COVID-19 health and safety requirements. These costs should be taken into account when calculating any service charge reductions.

In summary, the government is encouraging landlords and tenants to be as collaborative and flexible as possible in their approaches to mitigating the financial impacts of the COVID-19 pandemic. There is a clear message here for

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landlords, tenants and funders – 'you are all in the same boat'. The Code adopts a pragmatic tone and whilst it is not mandatory in any aspect, given the weight of its industry backing those who choose to ignore it are likely to be quickly singled out.

The Code is to apply until 24 June 2021 but with the June quarter day upon us and many predicting an even sharper drop in rent and service charge receipts than was seen in March, its impact will become clear in the next few weeks. Previous industry Codes – the RICS Service Charge Code and the 2007 Code for Leasing Business Premises as notable examples – have been launched with fanfare but with little lasting effect, particularly outside the institutional universe. Yet these are very different times which may prompt a very different response. Landlords and tenants must tread carefully however – the Code is addressing behaviours, it is not imposing solutions and there are many traps in which to fall when seeking to secure and document a legally binding arrangement.

Javid urges reorganisation and devolution post-COVID

Council tax reform and local government reorganisation should both play a part in the post COVID economic recovery, former Chancellor Sajid Javid has said.

He has called for the devolution agenda to be revitalised, with increased powers and resources given to the devolved authorities.

It says: ‘Local leadership should play a major role in the expanded programme of public investment, and there should therefore be as much haste as possible in developing a renewed agenda for English Devolution; the promised White Paper must be published as soon as possible this year.’

It also calls for local bodies to be given powers to raise cash for themselves and increased borrowing capacity. It warned: ‘This cannot be about Whitehall waving its wallet over the heads of metro mayors.’

Mr Javid, who is also a former communities secretary, calls on the Government to commission a system-wide review of the tax system. But he warns it should avoid raising income tax, VAT or National Insurance and focus instead on tighten the reliefs ‘which unduly favour the wealthy’.

Describing the current system of council tax as ‘highly regressive’, he calls for a ‘full council tax revaluation over this parliament, with revaluations every three years’ and a reform of bands and rates to bring the tax in line with current property prices.

Chief executive of the Chartered Institute of Public Finance and Accountancy, Rob Whiteman, told The MJ revaluation was ‘a good thing’ but added: ‘The biggest single issues for local government is how is social care funding and what is the method of redistribution.’

While he said there was always a place for a property tax, he said: ‘the bigger the spread of taxes, the better.

‘Local government needs other sources of income…. Rather than being wholly reliant on property taxes.’

Sajid Javid’s report, After the Virus, calls on the Government to:

 Revitalise the devolution agenda and increase the capacity of devolved authorities  Increased investment in infrastructure  Invest in left-behind regions  Reform of the planning rules International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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 New fiscal rules  A relentless focus on jobs  Pro-growth tax reform  Free trade agreements

‘Replace business rates with online sales tax’ More than four in five executives believe that the business rates system should be replaced with an online sales tax, research suggests.

In a survey of just over a thousand business leaders by BDO, the accounting firm, 84 per cent believed that the rates system should be overhauled.

While business rates — the tax on commercial property — bring in £30 billion a year, the system penalises companies that require a presence in town centres, resulting in them paying considerably higher rates than rivals operating online or out of town.

The leap in digital shopping and lengthy closures of bricks-and-mortar stores during the Covid-19 pandemic have intensified demands for Whitehall to overhaul the way in which it taxes companies. Ministers have granted shops, pubs, hotels and other leisure and hospitality venues a year-long “rates holiday” to help them through the virus- related downturn.

“This survey shows that business leaders deem it logical for digital companies to pay tax based on their online sales to help the economy to recover,” Paul Falvey, tax partner at BDO, said.

The Treasury introduced a 2 per cent digital sales tax in April, but this is aimed at large online businesses with global revenues of more than £500 million and UK sales of £25 million.

The Trump administration this week withdrew from international talks over a multilateral framework for taxing giant technology groups.

“There is widespread consensus that digital companies should pay more tax, but the key will be how,” Mr Falvey said. “International co-operation on digital taxes is the preferred solution of policymakers, but it is difficult to achieve in practice, so some countries, including the UK, have decided to introduce their own tax. Going it alone has dangers, as other countries including the USA have threatened retaliatory measures.”

UK debt is bigger than economy for first time since 1963

Government borrowed a record £55bn in May on back of coronavirus crisis

Britain’s public debt is larger than the size of the country’s economy for the first time since 1963, after the government borrowed a record £55bn in May.

The total level of debt has risen by £173bn over the last year to reach £1.95tn, or 100.9% of GDP, as ministers introduced unprecedented support for businesses and households during the coronavirus crisis.

The UK joined Italy, the US and Japan in the club of nations with levels of borrowing higher than their national income as the latest Office for National Statistics figures showed the UK government borrowed £55.2bn in May, roughly nine times more than the same month last year and the highest monthly borrowing since comparable records began in 1993.

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While most economists have urged the government to take a relaxed view of rising debt levels following forecasts that interest rates on government debt will stay low for several decades, the Treasury is known to be nervous about joining the 100% club.

Debt levels are expected to continue rising for the rest of the year, pushing the debt-to-GDP ratio nearer to 105% and more likely towards 110%, according to some City forecasts.

The UK economy has begun to bounce back from the depths of the lockdown in April and May, but the recovery is expected to be long and slow, as exporters wait for foreign markets to open and the worst-hit high street businesses cope with heavy restrictions on the number of customers they can serve.

Official figures estimate that GDP has slumped by 25% since the beginning of the lockdown and the number of people claiming work-related benefits has more than doubled to 2.8m.

The Treasury’s independent forecaster, the Office for Budget Responsibility, said GDP and overall tax receipts had performed “a little less badly than assumed”. In March, the OBR forecast a 35% hit to GDP by June. It said the labour market, which had largely been protected by the Treasury’s job retention scheme, was also performing better than it expected, though it was clear from other measures that many households were struggling to make ends meet.

“The headline unemployment measure has yet to show much effect from the crisis, but the claimant count measure that relates directly to benefit claims has climbed very sharply,” it said.

The ONS said tax payments received by HMRC were down £16.2bn or 43% on the same period last year, with a drop in VAT receipts accounting for the bulk of the deterioration following the government’s deferral scheme.

At the same time, central government spending increased £30.6bn or 48%, reflecting the extra costs of the coronavirus job retention scheme, additional grants to local authorities and higher public services spending, especially on health. Local government borrowing was up £3bn in May on the same month last year.

The chancellor, Rishi Sunak, said: “Today’s figures confirm that coronavirus is having a severe impact on our public finances. The best way to restore our public finances to a more sustainable footing is to safely reopen our economy so people can return to work.

“We’ve set out our plan to do this in a gradual and safe fashion, including reopening high streets across the country this week, as we kickstart our economic recovery.”

In May the government announced it would need to borrow an extra £225bn to get through the summer months while the economy remained weak.

Alison Ring, public sector director at the ICAEW accountancy body, said the Treasury had spent more cash in April and May than in the previous three financial years combined. “This is not surprising given the huge amounts of financial support the government is providing to keep the economy going through lockdown,” she said.

Sam Miley, an economist at the consultancy CEBR, said: “With high government spending levels and weak tax receipts set to remain for at least the next few months, further sustained increases to public sector debt should be expected.”

Borrowing for April was revised down by £13.6bn to £48.5bn. The ONS said this was largely because of stronger than previously estimated tax receipts and national insurance contributions, and lower spending than previously estimated associated with the coronavirus job retention scheme. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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The financial risk and resilience of English local authorities in the coronavirus crisis

Local authorities (LAs) across the country are among those on the front line of the coronavirus crisis. But geographical differences in demographic and economic structures make different parts of the country more vulnerable to different effects of the crisis – on health, on families and children, and on jobs and incomes. This means the demands and costs facing each LA will change in different ways and at different times. Moreover, differences in the extent to which each LA relies on different revenue sources, and in their financial reserves and commitments, mean they face differing degrees of financial risk and have differing degrees of financial resilience.

This report is published alongside a spreadsheet dashboard that collates for each LA in England a series of indicators of coronavirus-related risks. It looks at the extent to which these risks vary and the degree to which they are correlated, focusing on LAs’ revenues and financial resilience. It also briefly discusses the extra funding that central government has made available to them to help them address these risks in the current financial year.

Key findings

The government has allocated £3.2 billion of general funding to LAs to help them cope better with the impact of the coronavirus crisis on their spending and income. Most of the first £1.6 billion of this was allocated on the basis of estimated needs for adult social care spending. But the second £1.6 billion has been allocated on a per-person basis, and 35% of funding from this tranche in areas with two-tier local government is going to lower-tier shire districts, up from less than 2% of the first tranche, with a reduction in the share going to upper-tier counties, which have responsibility for social care services.

The changes in how the second tranche of this funding has been allocated were motivated by returns from LAs suggesting the crisis is expected to impact income more than spending. Returns from a group of urban authorities mostly in the Midlands and North of England suggest impacts on income could exceed impacts on spending by two-thirds, with income from business rates and sales, fees and charges particularly affected.

Lower-tier shire district councils are particularly reliant on business rates revenues and income from sales, fees and charges, likely putting them at greater risk of revenue falls. On average, they could lose business rates revenues equivalent to 18% of revenue expenditure before a ‘safety net system’ compensates them for losses, compared with 6% for urban metropolitan districts and 2% for county councils. Fees for parking, cultural and leisure services, planning and trade waste schemes, which are likely at particular risk, are equivalent to an average of 29% of shire districts’ budgets, compared with 7% for London boroughs and less than 1% for county councils.

There is substantial variation in reliance on these revenue sources between individual LAs, implying significant variation in risk to overall revenues. One in ten shire districts rely on fees from parking, cultural and leisure services, planning and trade waste schemes for less than 9% of their expenditure, while another one in ten rely on them for more than 55%, for instance.

LAs serving more deprived communities seem likely to be subject to less revenue risk than LAs serving more affluent communities. First, they rely less on income from sales, fees and charges, and much less on council tax revenues. For example, the tenth of LAs with the highest levels of deprivation rely on council tax for 32% of their non-schools revenue expenditure, compared with 69% for the tenth of LAs with the lowest levels of deprivation. Second, a smaller share of jobs in their areas are in the sectors most affected by the coronavirus lockdown (such as

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non-food retail, hospitality and transport), and a smaller fraction of their adult residents are self-employed and had to wait until late May for financial support for loss of income.

LAs’ ability to cope with increased borrowing is likely to vary significantly. For example, forecast reserves as of March 2020 (pre-COVID) were less than 20% of non-schools revenue expenditure in one in ten LAs, but more than approximately 160% of non-schools revenue expenditure in another tenth. Debt servicing costs, which are hard to adjust unless LAs are able to refinance debt on more favourable terms, are essentially nothing for one in ten LAs, but account for more than 20% of non-schools revenue expenditure in another tenth.

On average, LAs that are more reliant on revenues that look particularly vulnerable in the short term have higher reserves, but this is far from always the case. On average, shire districts have reserves equivalent to 110% of non- schools revenue expenditure, compared with 41% for London boroughs and 25% for shire counties. This should leave them better placed to manage a temporary decline in revenues. But three LAs (all shire districts) are among the bottom 30% of LAs in terms of reserves, but also among the top 30% in terms of reliance on sales, fees and charges (SFCs) from culture, parking, planning and trade waste and above-safety-net business rates revenues. For 19 LAs, income from these SFCs and above-safety-net business rates revenues exceeds their forecast reserves as of March 2020.

LAs with higher levels of deprivation have residents who appear more vulnerable to the coronavirus crisis on a number of dimensions, potentially increasing service demands and challenges. Mental ill health, homelessness and overcrowding, interventions from children’s social services, and receipt of free school meals are higher in LAs with high levels of more general deprivation. If, as evidence suggests, households already facing challenges and poverty are more vulnerable to the stresses and strains of lockdown and social distancing, the demand for support from LAs and other public services could increase. Prevalence of conditions that increase the risk of severe COVID-19 – coronary heart disease, diabetes and hypertension – are also higher in some deprived LAs, especially in the North of England. If individuals with such conditions are asked or choose to socially distance for an extended period, they may need more support from LAs in both the short and longer terms.

Taking these findings together suggests LAs of different types and serving different types of communities will be affected by the coronavirus crisis in different ways. LAs serving more affluent communities and especially shire districts appear to be exposed to greater revenue risks due to their reliance on local taxes and SFCs income (rather than central government grants). On the other hand, LAs serving more deprived communities could see particular increases in service needs and challenges if the coronavirus crisis hits individuals and families already suffering disadvantage harder, and these effects could be long lasting. These patterns should be borne in mind by the government if and when it allocates further funding to LAs.

Court of Appeal refuses Valuation Office Agency permission to appeal ruling on rateable valuation of council-run museum

The Court of Appeal has refused to grant the Valuation Office Agency permission to appeal a ruling in favour of Exeter City Council over the rateable valuation of the city’s Grade II-listed Royal Albert Memorial Museum & Art Gallery (RAMM).

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In January this year the Upper Tribunal (Lands Chamber) found in Hughes (VO) v Exeter City Council (RATING - valuation - alteration of rating list - museum located in an historic building) [2020] UKUT 7 (LC) that the RAMM should not be valued based on the cost of rebuilding (contractor’s or CB), which was the VOA’s preferred method.

The case was brought by the VOA as an appeal against a decision made by the Valuation Tribunal for England in August 2018, which used the Revenue and Expenditure (R&E) basis for valuing RAMM and set its rateable value at £1 from April 2015.

The previous rateable value, also the result of an appeal, was £445,000.

The Upper Tribunal judgment recognised the intrinsic high operational costs of occupying a listed building and running a museum and it was made clear that “there is no legal principle which would preclude the use of the R&E method in the present case and would require the CB to be used”.

Exeter City Council said the decision would have a significant impact on the way many English and Welsh museums are valued in the future, especially those in similar listed buildings with high operating costs.

Due to the importance of the case to the sector, the council was supported by Arts Council, England (ACE) and the National Museum Directors Council (NMDC).

Cllr Rachel Sutton, Exeter’s Portfolio Holder for Climate and Culture, said: “We are relieved by the outcome which is good news for RAMM but also the sector as a whole. Like all other local authorities, Exeter is facing huge financial challenges and the new rateable value will represent a substantial saving at a critical time.

“The judgment recognises the reality of the public subsidy required for a museum that is highly valued by its community but has an intrinsic cost. Many other museums and local authorities will find themselves in a similar position and our hope all along was that this judgement would also benefit other museums and the communities they serve.

“We are extremely grateful to ACE and NMDC. Without their support this landmark case would have been too costly for us, as a district council, to pursue.”

Colin Hunter of Lambert Smith Hampton, who acted as an expert witness at the hearing, said: “This appeal is the culmination of several years of discussions and appeals on behalf of various museums, both local authority and independent museums.

Hunter added: “The detailed 70 page decision in respect of RAMM pulls together all of the previous arguments raised by both the museums and the Valuation Office and provides extremely valuable guidance for how museums should be valued in the future.

“The principle issue between experts was the appropriate valuation method to be applied. The Valuation Office relied on a method based on the cost of construction of a modern equivalent museum. This decision goes back to first principles and explores what a reasonable museum tenant could and would be willing to pay in rent. The refusal to allow an appeal to the Court of Appeal should mean that this decision is the final word.”

Founded in 1868, RAMM is the largest museum in Exeter and is housed in a Gothic Revival building of local New Red Sandstone that has undergone several extensions during its history.

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Is COVID-19 a “Material Change of Circumstances” which would justify a temporary revaluation of business rates?

Landlords of unlet units in shopping centres or offices will not benefit from the Government’s Expanded Retail Discount 2020/21 for Coronavirus.

It is possible though that that they could make Checks and Challenges under the Non-Domestic Rating (Alteration of Lists and Appeal) (England) Regulations 2009 (SI 2009 No 2268) (“The Appeal Regulations”) seeking to reflect the temporary effects of COVID-19 on the value of the occupation of their premises.

The Checks and Challenges would be on the ground set out in Regulation 4(1)(b) of the Appeal Regulations, namely:

"the rateable value shown in the list for a hereditament is inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list was compiled."

Under regulation 3(1) of the Appeal Regulations, a “material change of circumstances” means “a change in any of the matters mentioned in paragraph 2(7) of Schedule 6 of the Local Government Finance Act 1988." The potentially relevant matters mentioned in paragraph 2(7) are:

1. matters affecting the physical state or physical enjoyment of the hereditament, 2. the mode or category of occupation of the hereditament, 3. … 4. matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless physically manifest there, and 5. the use or occupation of other premises situated in the locality of the hereditament.

There are arguments that the matters in (a) (d) and (e) have changed materially as a result of COVID-19. Similar appeals were successfully made following the impact of the Foot and Mouth outbreak in 2001 and the imposition of the ban on smoking in 2007.

It isn’t clear whether appeals based on the impact of COVID-19 would also succeed but the arguments are similar to those which did succeed in 2001 and 2007 and many landlords are making Checks and Challenges on the basis that there is little to lose.

What should you do?

The valuation date for any Check/Challenge is the date it is submitted and it is important that date is whilst the lockdown is in place, so we recommend any Checks/Challenges are made quickly.

We can advise and assist with introductions to a number of agents who would make the Checks/Challenges for you.

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Retail Faces An Unemployment Ticking Time Bomb Retail in the U.K. awoke from its enforced three month slumber this week and all the headlines would have you believe that everyone was rushing back out to the stores.

For some brands this might have held true, Primark and Sports Direct especially appeared to be popular. But is all this a true reflection of the current state of retail? Battered and bruised long before the COVID-19 coronavirus appeared, jobs were already being lost at an alarming rate.

According to the British Retail Consortium (BRC), in the year to October 2019, retail lost 85,000 jobs. Chief executive, Helen Dickinson stating that, "We have seen a persistent downwards trend in retail employment over the past three years, with the third-quarter fall of 2.8% equivalent to a loss of 85,000 people across the U.K. retail industry in the preceding 12 months".

But far more worryingly, according to the Centre for Retail Research, in 2020, lost retail sales will amount to £17.281 billion, 20,622 stores will close and a further 235,704 jobs will be lost.

For non-grocery and essential retail such as fashion, electronics and homeware to name a few sectors, the outlook appears bleak for their physical stores as more and more of us continue our lockdown habits and remain shopping online.

Noticeable this week has been the reality that not all stores have reopened, for John Lewis they opened just two of their department stores while on Oxford Street, Debenhams remained shuttered.

Footfall will take a long time to approach anything like pre-pandemic levels meaning that many stores will simply become commercially untenable. Business rates holiday aside, all the other fixed and variable costs of running a store estate remain in place. And after property, the biggest cost for any retail business are its people.

But of course, under the government furlough scheme much of that cost is currently hidden, 80% of salaries being paid by the taxpayer and in many cases, the employer making up the difference. So that for many working in retail, they have retained their normal level of income. Artificially shielded from the grim reality which awaits.

However, that's all about to change as retail chains realise that with vastly reduced sales, it makes no sense to keep their stores open. And when they do, mass redundancies are likely to follow as they rush to slim down their portfolio and find other ways of reaching customers other than through physical stores.

The next key date for retailers is June 24 when this quarter's rent payments are due to landlords, and many have gone on record as saying that they either won't pay or are seeking preferential terms such as deferring, reducing or moving to turnover rents.

Meanwhile, mass unemployment in retail is a disaster waiting to happen and seemingly there's nothing that can be done to prevent it.

MPs back wholesalers' call for business rates relief More than 50 MPs have joined the Federation of Wholesale Distributors' (FWD) call for food and drink wholesalers to receive the same government support as their hospitality sector customers.

In a cross-party letter to the chancellor Rishi Sunak, 31 parliamentarians say it is a ‘clear anomaly' that food and drink wholesalers are not eligible for the business rates relief and other measures available under the Retail, Hospitality and Leisure Grant Fund (RHLGF).

A further 21 MPs have written independently to the chancellor to echo the request for inclusion.

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The letter says: "This sector, which is crucial in supplying food, drink and household items to rural areas and critical public services such as care homes, hospitals, and schools, faces a crisis on a scale never seen before.

"A very significant proportion of the businesses in the sector do not qualify for the financial support schemes that the government has made available and they are not in a position to take out loans."

Foodservice wholesalers have seen a 70%-80% loss of business during lockdown, with some trading as much as 95% down.

A Defra survey of FWD members found that nearly 50% of respondents, all of whom have a turnover of £45m or less, are in danger of going into liquidation by the end of the year.

Among the signatories are former Conservative party leader Sir Iain Duncan Smith and former Labour Shadow Chancellor John McDonnell. Mr McDonnell is also among a number of MPs who have tabled parliamentary questions asking the chancellor if he will extend the hospitality, retail and leisure grants to the wholesale food and drink sector.

FWD chief executive James Bielby said: "There is widespread recognition among parliamentarians that, as an integral part of the machinery of economic growth, wholesalers need the same support as the restaurants, pubs, hotels and workplace caterers they supply and support.

"Without significant support for its distribution network, our members' customers cannot recover as quickly as they or the Treasury would wish, which will delay economic regeneration, at a cost of job losses and business failures. Immediate investment in the supply chain is essential for the smooth and swift recovery of the hospitality sector."

Coronavirus: Restaurant bosses in plea to PM for help Bosses at restaurant and food chains including Wagamama and Pizza Hut have warned the prime minister the sector faces mass job cuts without more help.

In a letter to Boris Johnson backed by 90 firms, they say that if social distancing remains they will need action on tax, rents and other support.

Without more help, the sector faces "grave damage", the firms say.

Deliveroo organised the letter, signed by its partner restaurants including Itsu and Pret A Manger.

The companies, which together represent more than 1,000 outlets, praised government measures already introduced, but said more "swift action" was needed while two-metre separation requirements remained in place.

The government has commissioned a comprehensive review into the two-metre rule, which the prime minister's official spokesman said on Monday would "look at evidence around transmission of the virus in different environments, incidence rates and international comparisons". Ministers have said the review will be completed "in the coming weeks".

In the letter, the bosses write: "Without government support to help restaurants to generate revenue and cover costs, tens of thousands of restaurants may be forced to permanently close their doors in the coming months.

"This crisis is far from over and the potential consequences are deeply concerning. A huge number of restaurants across the country are facing the prospect of bankruptcy."

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The firms own outlets across the UK, but are likely to reopen them at different times. In Northern Ireland, restaurants and cafes can reopen from 3 July, and in England the day after. The Scottish government has outlined a phased approach to pubs and restaurants reopening but there is no date. Nor is there a date for Wales.

Signatories include:

 Julian Metcalfe, founder and chief executive of Itsu  Pano Christou, chief executive of Pret A Manger  Emma Woods and Nigel Sherwood, chief executive and chief operating officer of Wagamama's  Neil Manhas, general manager for Pizza Hut UK.

The action called for includes slashing VAT on restaurant food and maintaining the Job Retention Scheme for restaurants while social distancing measures are in place.

Permanent closures

The chains also want "mortgage holidays" for landlords, so that this can be passed on in the form of lower rents, and an extension of the moratorium on evictions for as long as social distancing measures prevent restaurants from operating at full capacity.

A government spokesperson said: "We are working closely with the hospitality sector to develop safe ways for restaurants, bars and cafes to reopen as soon as we can from July.

"These businesses can continue to access our extensive package of support, including our job retention scheme which has been extended until October - meaning it will have been open for eight months and will continue to support businesses as the economy reopens and people return to work."

The spokesperson also pointed out that this was in addition to 100% business rates holidays, loans and tax deferrals.

Many restaurant chains were in trouble before the coronavirus lockdown, which has only exacerbated the pressures. Last week, the owner of Frankie and Benny's, The Restaurant Group, became the latest big name to restructure, announcing 3,000 job cuts and 125 closures.

A recent survey by Deliveroo found more than half of small and independent restaurants said they would have to close within three months without further support.

"Without government support to help restaurants to generate revenue and cover costs, tens of thousands of restaurants may be forced to permanently close their doors in the coming months," it said.

The signatories pointed out that last year, customers spent £40bn in restaurants, supporting one million employees.

Kate Nicholls, chief executive of industry trade body UK Hospitality, said: "Household name brands on every High Street have been closed and many will be operating at well below capacity once lockdown ends.

"As these proposals from Deliveroo and their partner restaurants show, restaurants need urgent support from the government so that they can help rebuild economies and give people some much-needed enjoyment. Without it, some will close permanently and people's jobs will be lost."

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Never waste a crisis – how coronavirus galvanised retail

In the space of a few months, Britain and its retailers have been plunged into a crisis the scale of which few would ever have imagined.

Action points

 Retailers should assess how new technology can help them trade more effectively – especially when it can bridge the gap between the traditional strengths of stores, such as providing advice, and lockdown conditions and their aftermath  Retailers have increasingly recognised that a changing landscape brings challenges outside their established areas of expertise – now is the time to identify or accelerate such partnerships.  Seize the moment to break silos: people are working in new ways, often remotely, using technology such as Microsoft Teams, bringing the chance to break down old barriers and work in a more agile way.  Ensure good initiatives and changes stick – spend time working out how newfound agility can be maintained and built upon

Marks & Spencer chair Archie Norman made use of a famous saying in the retailer’s annual report last week – “never let a good crisis go to waste”. During the pandemic, retailers have put those words into practice.

The coronavirus outbreak may have left head offices deserted, stores put into hibernation en masse and customers staying at home under lockdown restrictions unprecedented in peacetime, but retailers have reacted with an agility that runs through every aspect of their businesses.

HQ staff adopted new technologies, such as Zoom or Google Hangouts, to work virtually with other team members and shops – the ones still open, anyway – became overnight centres of crisis management, and their managers crash-course experts in the ‘new normal’ of screens and social distancing.

New ways of selling and building relationships with customers were deployed, factories retooled to manufacture PPE, ‘non-essential’ retailers’ delivery fleets put at the disposal of the NHS, distribution networks reconfigured to cope with a surge in online demand, and warehouses reset to ensure frightened workers’ health and safety.

Adversity has been the mother of invention and some of the changes made are likely to be evident long after the pandemic subsides in how retailers think and act.

The benefits of virtual technology

At a time when human contact must be minimised, technology has enabled retailers to serve their customers in new ways. Often it has helped bridge the chasm opened between salesperson and shopper as stores have been shuttered in their tens of thousands.

Any retailer selling product that relies upon good advice rather than simple transaction – whether luxury purchases, technology or even style and cosmetics tips – stands to gain from opening virtual channels.

Dixons Carphone has launched ShopLive, enabling consumers to access its product specialists for guidance and demonstrations, recreating an in-store experience in a digital environment.

Chief executive Alex Baldock tells Retail Week: “Sometimes crisis spurs innovation… we asked ourselves ’what can we do to enhance the online customer’s experience in a way that makes the most of our strengths and helps the customer most?’” International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Luxury goods retailers such as Burberry have led the way on virtual selling, helped by their experience in China where online is more advanced. They were able to adapt their services to advise and sell using social media such as WeChat or Instagram.

Watches of Switzerland, for instance, pivoted online. The upscale retailer started selling brands online that had previously only been available in stores and made use of ‘clienteling’ technology that facilitates the strengths of knowledgeable staff and their relationships with customers to win sales that would otherwise have been lost.

Boots, whose beauty business has been affected because shoppers can no longer test cosmetics, has taken a similar tack. The health and beauty group, which introduced an online GP and pharmacy consultation service in April, will offer 15-minute video consultations with No. 7 advisers when it reopens beauty counters this month.

OC&C Strategy Consultants retail and leisure specialist Sohini Pramanick says: “In the same way as you and I have become used to working from home, retailers have pushed themselves to be more virtual, and that’s a legitimate way of serving customers.”

The need for such customer options will not go away. She cautions: “When shops reopen, the amount of restrictions still in place begs the question whether the experience will be any better than virtually.”

Technology has also been utilised behind the scenes in retail, particularly to communicate with employees and suppliers. For example, Next’s buyers have deployed video communications to work with suppliers and Marks & Spencer’s office employees have successfully used Microsoft Teams.

“We’ve seen the breaking of silos and more flexibility,” says PwC consumer markets leader Lisa Hooker of the impact of the pandemic.

Getting the basics right

Retailers have also taken the opportunity to ensure the basics are working as well as possible online. At M&S, which was already pursuing a digital-first strategy, website improvements were accelerated.

During the lockdown, M&S has established a dedicated SEO working party to improve search rankings, and position the online channel “to reflect rapidly changing customer behaviours, including trading our site with refreshed architecture focused on the goods most searched for by customers such as kidswear, bedding, towels, loungewear”.

Adoption and better use of technology are likely to continue after the pandemic as retail faces a potentially lengthy recovery period. Sarah McVittie, co-founder of fashion prediction platform Dressipi, which counts retailers such as River Island and John Lewis among its clients, says retailers will benefit from better use of data.

Many retailers feel they are drowning in data, but McVittie says it can enable agility when it can be used practically and quickly, such as through visualisation. Dressipi is one of the beneficiaries from a £40m fund set up by government-sponsored Innovate UK to fast-track innovations born out of the crisis.

Such technology will enable retailers to move swiftly in changing conditions. As shoppers switch online overnight and continue to buy from ecommerce sites, for instance, the differences and similarities between existing and new customers can be identified, new customers’ lifetime value can be developed and promotions better targeted.

Such insights are particularly useful in circumstances like the present, when employees may be juggling responsibilities and covering for furloughed colleagues. “Where it’s helpful is for people who’ve got a lot on their plate,” says McVittie. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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“What’s interesting about this period is that retailers are becoming more open. What’s important in fashion is combining data technology and the creativity that makes fashion unique,” she says.

Grocery innovations

Partnerships were already becoming a prominent feature of retail as businesses acknowledged that the demands of a changing consumer presented challenges which lay beyond their traditional strengths and expertise.

They have proceeded at pace since lockdown. Morrisons, for example, extended its partnership with etail titan Amazon to provide same-day delivery from about 40 stores, serving the UK’s biggest cities. Morrisons also ramped up delivery capacity through Deliveroo, becoming available to a quarter of UK households.

Unlike some partnerships in the past, the Deliveroo link-up – and others between the fulfilment specialist and food retailers – was a two-way street. Deliveroo itself was suffering as its established restaurant partners were put under pressure by lockdown rules.

The emergency has also brought a variety of product and supply initiatives as food retailers, in particular, moved nimbly to serve shoppers better and safeguard operations.

Perhaps the most agile product response has been the introduction of pre-selected boxes of goods, pioneered by Morrisons and offered by retailers such as M&S and Aldi.

Boxes were developed first as an option for key workers and vulnerable and shielding customers – the one launched by Morrisons at the beginning of April was a click-and-collect service for NHS staff. They quickly moved into the mainstream and the grocer has since launched special boxes catering for special diets or special occasions ranging from VE Day celebrations to Ramadan.

Similarly, M&S began with boxes of essential foods and moved on to barbecue specials and the Indian Takeaway Big Night Box as their wider relevance became clear.

Such boxes, says Hooker, also have the advantage of enabling retailers to better manage flow of stock, including selling through stock which may be in very plentiful supply.

Inside the supply chain, there has also been action. FMCG businesses launched their own direct-to-consumer arms to ensure customers did not miss out as stockpiling left shelves bare in the early days of the outbreak – ‘Heinz to Home’ is one example.

The big grocers also typically stepped up payment terms to suppliers, to help them through the dark days that might have pushed some to the wall. As lockdown loomed, Morrisons started immediate payment to smaller suppliers.

Hooker thinks that in the aftermath of the pandemic, there may be deals as retailers or other food groups “buy their supply chain” in order to guarantee its future security.

Keeping the best of change

The pandemic has brought devastation in its wake, but it has also forced retailers to reassess their fitness for purpose and to move at lightning-speed to adapt.

Whereas in the past there may have been reluctance about change or inertia about transformation, the crisis has swept such attitudes away and led to new ways of thinking and acting. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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That openness to change, and experience of how quickly change can be made to happen, is something precious and worth keeping hold of when more normal conditions resume.

It could happen in all sorts of ways. Hooker points, for instance, to the speed with which grocers were able to recruit extra staff as they leapt into action to feed the nation. One grocer told her that their business had done in a day what would have taken weeks previously when more people were hired for peak trading season.

New ways of working can bring further benefits, she believes, as retailers and other big-hiring consumer businesses such as hospitality groups face an environment in which the immigrant staff on which they have often relied are likely to be available in far fewer numbers.

The pandemic progressed at breakneck speed but prompted new ways of doing things. Despite current pressures, now is the time when retail leaders should think about how they maintain this new, agile mindset and the commercial benefits of doing so.

Pramanick observes: “That’s going to be the great learning. Don’t just think about what you do today; how do you make broader use of assets and pivot quickly? A lot of companies are saying let’s be deliberate about how we make this stick.

As Norman wrote in M&S’ annual report: “Our business is now operating in ways we have never operated before. Remote working is only a small part of it. Multitasking in stores, delegation of authority, fast decision-making, an action orientation irrespective of hierarchy, and brilliant communication direct to the front line.

“At the same time, the way our customers live and shop has changed beyond recognition and these behaviours will not fully revert any time soon. We are determined to make our ways of working permanent and accelerate the aspects of our transformation necessary to thrive in a new consumer landscape.”

All retailers should be looking forward with the same determination.

Business rates grant money could be clawed back, says IFS Central government funds given to councils to pay for grants and business rates waivers may have to be paid back if it is unspent, a finance think tank has claimed.

Of the £22bn given to English local authorities, up to £400m could be left unspent, according to calculations by the Institute of Fiscal Studies (IFS).

IFS associate director, David Philips, said a lack of a centralised databases of business rates, and the speed at which the scheme was set up meant it was ‘inevitable’ that the initial allocations would differ from the final cost of the grant scheme.

While most discrepancies are likely to be relatively small, he said: ‘A few coastal councils are likely to spend tens of millions of pounds less than they have been allocated.

‘Overall, more than £400 million of funding will have to be clawed back from local authorities initially allocated too much funding – which could potentially be recycled for more general financial support for local government to address the costs of the coronavirus crisis or to provide more support for businesses across England.’

The Chartered Institute of Public Finance and Accountancy said 87% of all eligible businesses were paid.

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Lead revenues advisor, Adrian Blaylock said this happened ‘at pace at a time when resources are stretched and there is high demand’.

He added: ‘Government have committed £12.3bn to support business. Should there be any funding remaining, CIPFA would absolutely support the redistribution of these to ensure the full level of support offered by government is used for its intended purpose.’

Chair of the Local Government Association’s resources board, Cllr Richard Watts, said councils were continuing to redistribute the cash where it was needed.

‘If all eligible businesses can be contacted and paid, and funding for the discretionary scheme is spent in full, we estimate there could be an underspend of £600 million.

‘The Government should redistribute any unspent resources from this scheme, including any clawed back, to councils to be spent on local efforts to help support businesses and reboot local economies as we move into the next phase of this crisis.’

The IFS found:  Just £1 difference in a property’s rateable value could lead to up to £24,300 in support  There were large discrepancies between the proportion of eligible support in different parts of the country, largely due to property prices and policy differences  There was significant variation in how quickly councils could pay out grants  Councils could be left with at least £400m of unspent funding

UK manufacturers call for business rates break to aid recovery A holiday on levy would be quickest way to aid industry after plunge in output, poll finds

Manufacturers have called for a coronavirus business rates holiday similar to one granted to shops, bars and hotels, after activity in the sector plunged to the lowest point in at least 30 years during lockdown. With many factories still closed and people staying at home, manufacturing output has slumped to its worst performance on record during the second quarter of the year, according to a survey by the employers group Make UK. Export and domestic orders sank to levels comparable with the depths of the financial crisis, it found, while only 12 in every 100 companies quizzed were operating at full capacity. “The data shows the terrible state of manufacturing,” said Stephen Phipson, head of Make UK. “Orders in the aerospace industry have fallen off a cliff and the carmakers are really struggling. People are rapidly cancelling orders and it's causing huge problems across the supply chain.”

The poll of 309 companies in May showed the balance for output at minus 56 per cent, the lowest in the survey’s three-decade history. It follows a one-fifth contraction in the UK economy in April, the largest since monthly records began in 1997.

Despite the gradual easing of lockdown measures, the lobby group said prospects in the next quarter “appear little better” and it forecasts manufacturing to contract by almost a tenth in 2020. That is steeper than the 7.8 per cent decline it expects for the wider economy. Although the government has offered loan guarantees for companies to survive the crisis, some major manufacturers have struggled to obtain financial assistance. Make UK has called for a “national recovery plan” and is pressing ministers for a stimulus package, starting with a suspension of business rates for manufacturers, which it argues would have the quickest impact. The levy on commercial premises has already been frozen for businesses in the retail, hospitality and leisure industries. Other proposals include spending on infrastructure and a car scrappage scheme.“

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While the short-term support packages offered to date have provided a lifeline, it’s becoming increasingly clear that the government needs to develop a comprehensive strategy to provide long term stability for the manufacturing sector,” said Tom Lawton, head of manufacturing at BDO, an accountancy firm that conducts the survey with Make UK.

Some 830,000 manufacturing employees have been furloughed, equivalent to almost one-third of the sector’s overall workforce, according to data from HM Revenue & Customs. This has provoked fears of widespread lay-offs at Britain's factories once the coronavirus job retention scheme finishes at the end of October, on top of redundancies already announced by companies such as engineering group Rolls-Royce and luxury carmaker Bentley. Make UK joins a chorus of industry groups calling for the government to outline a recovery plan for the UK economy. CBI director-general Carolyn Fairbairn has called for a future skills fund and financial support to kick-start demand and boost competitiveness, including extending business rates relief to midsized business in all sectors, along with a review of regulation to accelerate key infrastructure projects.

'There's a volcano, that unless Boris wakes up to it now, will go bang' Restauranteur Richard Caring warns PM's 'indecision' on reopening restaurants, pubs and cafes could cost two million workers their jobs

 Richard Caring has launched a blistering attack on the Government on Covid-19  He says thousands of businesses and employees are now in the ‘eye of a storm’  Caring urges the Prime Minister to be ‘brave’ and ‘stand up and be counted

One of Britain’s most powerful business tycoons has launched a blistering attack on the Government, warning that Boris Johnson’s ‘weakness and indecision’ on reopening restaurants, pubs and cafes will cost more than two million workers their jobs.

In a rare interview, restaurateur and private members’ club mogul Richard Caring – whose empire includes the famous Annabel’s club, Scott’s in London and The Ivy restaurant chain – warned the Prime Minister he was ‘killing the country’ by failing to outline when hospitality venues could reopen and whether they would have to abide by the two-metre social distancing rule.

Caring, whose staff have now delivered a million and one freshly cooked free meals to NHS workers and vulnerable people in lockdown, said Ministers had grossly underestimated the permanent damage being done to Britain’s 26,000 restaurants.

He told The Mail on Sunday that thousands of businesses and their employees were in the ‘eye of a storm’ – surviving thanks only to the Government’s taxpayer-funded furlough scheme that pays staff wages, and a pause on rent and business rates tax bills.

As soon as state aid measures are withdrawn, Caring warned, as many as ‘50 per cent or 60 per cent’ of the four- million-strong hospitality workforce could be laid off and restaurants, cafes and bars shuttered for good.

He said the wave of redundancies would be ‘like a volcano’ erupting, with the worst of the pain coming in September and October when the furlough scheme ends.

The intervention by arguably the most influential businessman in the hospitality industry will pile pressure on the Prime Minister to ease two-metre social distancing rules and follow countries such as France, Spain, Italy and Germany in allowing restaurants and pubs to reopen with less onerous restrictions.

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Calling for urgent action to avert the looming jobs crisis, Caring said: ‘The beginning of the lockdown gave us an initial shock.

Now it’s quite calm because people are furloughed, businesses are not paying staff, they are not paying rent, they are not paying rates and staff don’t have the expense of going to work and the expense of going out.

‘So as a restaurateur, you believe you can sit tight and survive, and that’s what everyone’s doing. But the big problem that people shy away from is that we’re in the eye of a storm. ‘The fact is, down the road there’s a volcano that is going to bubble over.

I don’t think people can see it yet, but everyone in hospitality is beginning to realise they will have to make heavy cuts. ‘This volcano, unless we wake up to it now, it’s going to be horrendous. It’s just going to explode, spewing out unemployed people. The pain and suffering it is going to cause is horrific.

‘There are estimates saying we could have up to five million unemployed. It’s not going to be five million – it’s going to be more. I don’t think we’ve seen anything yet. The Government is killing the country right now and the hospitality industry is the frontline disaster.’

Caring, a Tory donor, rarely makes public statements, so his intervention is likely to be received in Westminster as a piercing blow to the Government. The tycoon – who is known as the ‘king of clubs’ for his array of prized assets which also include Harry’s Bar and Mark’s Club, the J Sheekey, Sexy Fish and Le Caprice restaurants in London, as well as the Bill’s chain and a major stake in the Soho House clubs network – paid £150,000 last year at a Tory Party fundraising event to dine with Mr Johnson at the Mark’s Club in Mayfair.

Talking to The Mail on Sunday alongside his right-hand man Alexander Spencer-Churchill, the grandson of the 10th Duke of Marlborough, Caring urged the Prime Minister to be ‘brave’ and ‘stand up and be counted’. Mr Johnson has launched a review of the two-metre rule and indicated that hospitality businesses might be allowed to reopen on July 4.

But he has given no concrete assurances and speculation is rife that the PM wants to keep social distancing at two metres until September, when schoolchildren are scheduled to return to classrooms. ‘The British people are tough, but they want to have something to hold on to, and we’re not giving them anything at the moment, just “maybes”,’

Caring said. ‘They deserve more.’ He believes the Government has failed to grasp the scale of the looming unemployment crisis. Alongside the two million hospitality layoffs, Caring estimates that 25 per cent of those on furlough in other industries will eventually lose their jobs.

He predicts that the cull will push the overall jobless figure for Britain to an astonishing seven million people – equal to about one in five of the working-age population. ‘The clock is ticking and when furlough ends, that will be it for a lot of businesses,’ he said. ‘Businesses that were not strong in December 2019 will not survive. I think the country is going to wake up to this terrible shock.’

In Europe, Germany, Belgium, Greece, Italy, the Netherlands and Portugal have all allowed restaurants to open with 1.5 metres social distancing. Meanwhile, France, Austria, Denmark, Norway, China, Hong Kong, Lithuania and Singapore require only one metre. Guidelines issued by the World Health Organisation also recommend keeping a distance of one metre.

Caring said: ‘If they can do it elsewhere, why not here? ‘I get so many calls from people saying when are you going to open the restaurants. ‘My answer is I can’t – there are no regulations, there are no rules, there is no

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information. We don’t know if we need glass screens between tables. Is it two metres without screens? One and a half with screens? We don’t know. We’re just told it’s under review, under review, under review.’

Caring said ‘the world has turned on its head five times’ since Britain went into lockdown in March to deal with the Covid-19 crisis. He has spent it at his home in London with wife Patricia and their three children, aged one, three and five.

‘I’m just so very upset for everyone in this country and I just want everyone to be OK. ‘This crisis has changed my way of thinking dramatically. This has been such as tremendous shock to everybody.’ In January, Caring completed a deal with the former prime minister of Qatar that brought in additional investment for his hospitality empire.

‘We as a company were in expansion mode right up until the announcement of Covid back in February,’ Caring revealed. ‘Now that whole landscape has changed totally and our focus has become being secure and protective.’

He added: ‘We hadn’t signed any contracts because we were waiting for clarity on Brexit, so we didn’t actually complete any of the expansion. And then Covid hit – so our hesitation really proved to be fortunate.’ ‘I have definitely at this time lost some of the aggression to expand. Now it’s about survival. We are anxious to reach a place of calm.’

Caring started out in clothing and made his name importing fashion lines from the Far East to high street giants such as Next and many other retailers, before moving into the restaurant and private members’ club business with the purchase of Caprice Holdings group for £31.5million in 2005.

The flamboyant mogul has donated generously to help the pandemic relief effort. Together with his wife, he set up The Caring Foundation earlier this year to feed NHS workers, critically vulnerable communities, hungry children, the unemployed and the isolated elderly across the UK and Ireland during the pandemic.

More than 1,000 of Caring’s staff volunteered to cook meals in 26 kitchens at Annabel’s, The Ivy Collection, Caprice and Bill’s restaurants in cities and towns including Manchester, Birmingham, Glasgow, Dublin, Cardiff, Brighton and London. To help with storage and distribution in the capital, The Caring Foundation partnered with The Felix Project, a charity which fights food waste and hunger.

On the menu has been The Ivy’s shepherd’s pie, Harry’s lasagne, Sexy Fish chilli and other favourites from Caring’s restaurants. At 3pm last Thursday, Caring’s volunteers handed out meal number one million and one.

‘The Caring Foundation meals were very much my wife Patricia’s idea,’ Caring said. ‘She came to me one day three months ago and said there’s a situation where the Foundation can help as concern for people’s wellbeing unfolded on the news. ‘The Caring Foundation cannot thank all of the staff involved enough for their kindness and generosity of time.’

Members of Caring’s private clubs, including Annabel’s, donated £2million towards the cost of the scheme and a JustGiving fundraising page was set up where members of the public donated sums from as little as £5.

‘Many of those additional donations were sent with the kindest of supporting messages,’ he said. Caring himself is guaranteeing the final bill. He said the volunteers are now having a two-week rest to give staff a ‘bit of a break’ after reaching a million and one meals and assess whether the scheme is still useful as lockdown is eased.

‘My own feeling is that there will be a lot more needed going forward,’ Caring said. Spencer-Churchill, who helped with the volunteering effort, said: ‘We are so grateful for our members’ incredible generosity in helping health workers and those desperately in need. Our staff say the freshly cooked, nutritious food has gone down very well.’

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The Caring Foundation has also partnered with Bem Querer Mulher (BQM), a UN-backed charity programme in Brazil that fights domestic violence against women and children. Figures show domestic violence cases across the world have risen with families isolated for long periods during lockdown, and the Caring-BQM partnership, which has been set up by Patricia, will open a new Well Woman Centre in San Paolo offering support to women and children who are victims of abuse. A similar centre is planned for London.

Despite his best efforts, Caring said his business empire won’t escape the job cuts forecast for later this year. He warned that ‘value’ restaurant chains such as Bill’s were most at risk of the industry-wide layoffs. Familiar high street names such as Cafe Rouge and Frankie & Benny’s have already announced swathes of closures and job cuts.

‘I’m really upset about losing staff because we have a lot of very good people,’ Caring said. ‘But we have to look at staying in business. ‘I’m of no use to our staff if we go out of business, so we have to make cuts. ‘I like to think that this will turn itself around to the point where we can bring those people back very soon.’

Caring said nearly all the landlords of his restaurants had been ‘supportive’ during the lockdown, adding: ‘I strongly recommend that landlords and tenants communicate – they are hand-in-hand in this situation and only by the willingness to be aware of each other’s problems can they make positive progress. They need each other now more than ever before.’

He said the widely reported investment deal in January with Hamad bin Jassim bin Jaber Al Thani – who also owns Claridge’s, The Connaught, The Shard sky scraper and Paris Saint-Germain football club – ‘put us on the international stage’.

‘The idea was we would have partners with worldwide experience and knowledge we could tap into for our benefit. They are extremely impressive and solid people and we have learned an awful lot from them in our short experience.

‘[But now] I’m not looking at fast expansion. This crisis has been a real eye-opener for me and I’m sure the rest of the world. ‘I would definitely settle for a quieter life in future.’

Spencer-Churchill added: ‘Our members have being amazing from all clubs and what touches me the most is they have asked about the welfare of the staff – we really have the best members.

‘Without our team we would not have the clubs we have.’ In a final plea to the Prime Minister, Caring said so far the Government had been ‘extremely forthcoming’ in supporting the economy. But he said Ministers now ‘must really stand up and be counted’ and ‘stop being evasive’.

He argued that Britain should ‘carry on urgently printing money’ to prop up businesses starved of income to pay their bills. Figures on Friday showed the UK economy shrank by 20.4 per cent in April and a cross-party group of MPs warned that three-quarters of pubs, restaurants, hotels and travel businesses would not be able to operate if they had to reopen under two-metre social distancing.

Caring said: ‘The Government has either got to say we’re going to have 15, 20, 25 per cent of the population unemployed and we’d rather pay that bill, or they’ve got to get involved and start making some decisions, because this is not a problem that’s going to go away.

‘The only difference between this and the Great Depression of the 1930s is that today our banks are better capitalised, our Government is more aware and money is cheap for the foreseeable future.

‘If I was Prime Minister, I would print a lot more money because this devastation is going to last a long time. What are they waiting for? ‘Someone has got to stand up and be counted. Answer questions, have a plan.

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‘I believe in this country and the courage of the British people. We went through the Blitz and this is the Blitz again, times ten. We could do with a Winston Churchill, but we will come out of it. ‘But the economy is going to be so damaged and the unemployment rates so high that it’s going to take many years. We’re destroying the economy as we go.

‘My message to the Government would be make some decisions, give us something to hold on to and take advantage of the low interest rates that are definitely here for the foreseeable future. ‘Because the pain of 20 to 25 per cent unemployment and the suffering and the hardship that will cause will be three times worse than this virus.'

Boris Johnson urged to tax giants like Amazon to help ailing shops post-lockdown EXCLUSIVE: Many firms were teetering on the brink before the pandemic hit and the high street has been losing £1.8billion a week in sales under the three-month shutdown

Business chiefs are urging Boris Johnson to hit web giants like Amazon with tough new taxes to prevent ailing shops going under.

Many firms were teetering on the brink before the pandemic hit and the high street has been losing £1.8billion a week in sales under the three-month shutdown.

With non-essential shops set to reopen tomorrow under lockdown easing, the Prime Minister was warned of the need to establish a level playing field with web giants.

The online firms undercut physical rivals and the Covid-19 crisis has forced more shoppers to use them. And experts have long slammed the high rates and rents shops face.

Amazon paid just £63million in business rates here in 2018 on reported sales of £8.8billion. By comparison, Marks & Spencer pays about £184million in rates on annual sales of £10.7billion, while Tesco pays £700million on sales of £63.9billion.

Retail chiefs including Tesco’s Dave Lewis and Sports Direct boss Mike Ashley have already called for an online sales tax to help to give high street shops fairer terms.

Mr Lewis also wants business rates cut by 20 per cent and the shortfall made up with a 2 per cent levy on all online retail sales.

Paul Monaghan, of campaign group Fair Tax Mark, said: “The financial cost of coronavirus is going to be in the region of £300billon. It’s vital all sectors of society make a fair contribution and a great place to start would be to tackle tax avoiders and their enablers.

Shadow Business Minister Lucy Powell said: “It’s vital there’s a level playing field for our high streets so they don’t lose out"

“Profit-shifting to tax havens is costing the UK £7billion per year in corporation taxes. We need to act to redress the unfair playing field many businesses face from competitors who aren’t making a fair contribution. This will help national coffers and the local high street alike.”

Shadow Business Minister Lucy Powell added: “It’s vital there’s a level playing field for our high streets so they don’t lose out.”

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And Helen Dickinson, of the British Retail Consortium, said: “Government support – from its job retention scheme to loan guarantees and business rates holiday – has provided a lifeline but more will be needed.”

Mothercare went bust in January while Debenhams, House of Fraser and Marks & Spencer closed branches before the crisis. Retailers including Topshop owner Arcadia, New Look and Homebase were forced to seek agreements with landlords to shut stores and slash rent bills to stave off insolvency.

Retailers are hoping for a revival just days after the economy plunged by 20.4 per cent.

Shoppers could bag bargains as fashion chains are sitting on £150billion of stock, however they may face chaotic queues due to two-metre social distancing rules.

Joshua Bamfield, of the Centre for Retail Research, says some chains will stagger branch reopenings. He said: “Many will want to see how it works, not only from a profit and loss point of view but social distancing.

“They’ll wait to see if the Government gives in to calls to reduce it to a metre.

“What happens in the next few months is going to be key in terms of who survives.”

Amazon did not respond to requests for comment yesterday. It has previously said its UK activities help fund public services and infrastructure through the taxes it pays here.

How U.K.’s $168 Billion Virus Aid Package Is Being Rolled Out Chancellor of the Exchequer Rishi Sunak has deployed unprecedented support to help U.K. companies and workers cope with the economic damage wrought by the coronavirus pandemic. The Office for Budget Responsibility last week estimated the response so far will cost taxpayers almost 133 billion pounds ($168 billion) in the current fiscal year.

Significant job losses are nonetheless inevitable, with the country in its third month of lockdown in an effort to stop the spread of the virus. The Bank of England says the economy could shrink 14% this year, the biggest contraction since 1706.

Here’s a rundown of the measures, and their take-up so far:

Extra Funding:

The government has spent an extra 16 billion pounds on public services, according to the OBR.

National Health Service: Delivering his Budget on March 11, Sunak said “whatever extra resources our NHS needs to cope with Covid-19, it will get.” He announced a 5 billion-pound emergency response fund available to the NHS and other public services.

Welfare: Claimants of contributory employment and support allowance benefits can claim from day one rather than day eight of being unemployed. The government removed the minimum income floor on Universal Credit -- including for the self-employed -- and increased the standard allowance by 1,000 pounds per year. The Working Tax Credit basic element was also raised by 1,000 pounds per year. Welfare measures are worth about 8 billion pounds, according to the OBR.

Sick Pay: Statutory sick pay will be paid from day one, not day four, and extended to people advised to self-isolate regardless of whether they have Covid-19 symptoms. For as many as 2 million companies employing 250 people or fewer, the government will cover payments up to 14 days -- a commitment of as much as 2 billion pounds, though the OBR estimates the cost at half that. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Hardship Grants: 500 million pounds to be distributed by local authorities to directly support vulnerable people in their areas.

Results so far: According to provisional Department for Work and Pensions data, some 2.87 million claims for universal credit were received between March 16 and May 26.

Business Grants

Cash grants of 10,000 pounds for 700,000 of the country’s smallest businesses -- those that don’t pay business rates.

Retail, hospitality and leisure sector businesses with a so-called rateable value of less than 51,000 pounds are eligible for grants of 25,000 pounds.

Some 12 billion pounds was paid out to councils to fund the grant programs, according to Sunak.

Results so far: Business Secretary Alok Sharma tweeted last week week that some 10 billion pounds has been paid out to businesses in grants so far.

Tax Breaks

Business Rates: All hospitality, retail and leisure firms have a one-year business rates holiday. The Centre for Policy Studies valued the measure at 13 billion pounds.

VAT Holiday: No business will have to pay value-added tax in the April-June quarter, with payments deferred until the end of the financial year. Sunak said it amounts to a cash injection of 30 billion pounds.

The Treasury slashed to zero the VAT rate on personal protective equipment, saving care homes and businesses more than 100 million pounds. It also brought forward by seven months the abolition of VAT on electronic books and newspapers.

Income Tax: The self-employed are able to defer their payments to January.

Loan Guarantees:

On March 17, Sunak announced 330 billion pounds of loan guarantees -- equivalent to 15% of GDP. This was made up of:

Covid Corporate Financing Facility: A Bank of England-administered program that allows large companies with investment-grade credit ratings to issue short-term debt in the form of commercial paper lasting as long as a year, to help them cover immediate cash needs.

Coronavirus Business Interruption Loan Scheme: The program was first announced on March 11 and later extended in scope, allowing small companies to access loans of as much as 5 million pounds, with no interest to be paid for the first 12 months. To encourage commercial banks to lend the money, the government guaranteed to incur the first 80% of any losses on the loans, which first became available on March 23. Sunak has effectively ruled out raising the Treasury guarantee to 100%.

Coronavirus Large Business Interruption Loan Scheme: Originally announced by Sunak on April 4 and since expanded in scope, the program allows for companies with an annual turnover greater than 45 million pounds to

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access loans of as much as 25 million pounds. Those with turnover of more than 250 million pounds can borrow as much as 50 million pounds.

A new “bounce back” loan program that’s 100% backed by the state. Designed to help the smallest businesses, but open to companies of all sizes, it gives them access to loans of between 2,000 pounds and 50,000 pounds, with interest rates capped at 2.5% and the government paying the interest and fees in the first year.

Results so far: As of June 3, the Bank of England had purchased a net 16.2 billion pounds of commercial paper under the CCFF program, benefiting 53 businesses. On Thursday, it published a list of beneficiaries.

Under the business interruption loans programs almost 46,000 loans worth 8.9 billion pounds have been approved so far, the Treasury said last week. Under the interruption loans program for larger companies, 191 loans have been approved, totaling over 1.1 billion pounds.

Under the bounce back loan program, almost 700,000 loans worth 21.3 billion pounds were approved in the first two weeks.

Paying Wages:

Coronavirus Job Retention Scheme: Any employer regardless of size or profitability can furlough its workers, and the government will pay 80% of their wages up to a total of 2,500 pounds a month -- so long as the employee remains linked to the job and doesn’t work during the furlough period. Employers are allowed to top up employee salaries. The program was backdated until March 1 and Sunak has now extended it until the end of October, with employers bearing more of the cost in its final months. It covers all those on a company’s payroll by March 19. The OBR estimates the cost, net of income tax levied on the payments, at 54 billion pounds.

Self-Employed Workers Scheme: On March 26, Sunak said the government would pay the self-employed a taxable cash grant worth 80% of their average monthly profits, up to a maximum of 2,500 pounds, for at least three months. He’s since extended it to provide another 3 months support at a level of 70% of monthly profits. The program is open to anyone with an annual income of up to 50,000 pounds. The OBR estimates its cost at 15 billion pounds.

Results so far: The furlough program is supporting more than 8.7 million jobs with 17.5 billion pounds claimed so far, the Treasury said last week. By May 31, the self-employed program had received 2.5 million claims for grants totaling 7.2 billion pounds.

Housing:

Mortgage Holiday: Sunak initially came to an agreement with lenders to grant homeowners in difficulty a three- month mortgage holiday -- a grace period that’s now been extended by another three months.

For renters, Sunak increased housing benefit and Universal Credit to cover at least 30% of market rates -- a measure he valued at almost 1 billion pounds.

Results so far: Some 1.86 million customers had been granted mortgage holidays, as of May 28, according to UK Finance. That’s one in six of all mortgages.

Sectoral Deals

Trains: The Department for Transport said on March 23 it will take on the revenue and cost risk for the nation’s rail services for six months, with operators continuing to manage day-to-day services for a “a small, predetermined management fee.” International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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London Transport: The government last week agreed to 1.1 billion pounds of extra funding to keep the capital’s transit system running, as well as a loan of 505 million pounds.

Buses: On April 3, the government announced a 400-million pound package to keep bus services running nationwide, including 167 million pounds of new money.

Freight and Ferries: The Department for Transport has announced support for freight and ferry routes, including 17 million pounds for links between mainland Great Britain and Northern Ireland and 10.5 million pounds for links to the Isle of Wight and Isles of Scilly. There was also an unspecified amount of support for routes to continental Europe.

Charities: Sunak on April 8 announced a 750 million-pound package to help hospices and other charities weather the crisis.

High-Growth science and technology: On April 20, Sunak announced a 1.25 billion-pound package of support for technology and life sciences firms driving innovation. Small and medium-sized companies focused on research and development were given 750 million pounds of grants and loans, while high-growth companies hit by the pandemic were offered loans worth 500 million pounds. Under that program, companies would get loans of between 125,000 pounds and 5 million pounds, with private investors matching the government commitment. If the loans aren’t repaid, they will convert to equity stakes.

Other: there have been small-scale support packages for various niches of the economy, including 14 million pounds for zoos and aquariums, 16 million pounds for the sport of rugby league, and a grant program enabling dairy farmers to secure 10,000 pounds apiece.

ENGLAND

Business rates revolt: London companies refuse to cough up during lockdown Tens of thousands of London companies are believed to be mutinying against the taxman by refusing to pay business rates for the three months of the coronavirus lockdown.

In light of the pandemic, the government has handed firms in the retail and tourism sectors a year-long holiday on the tax, which is applied to companies’ commercial premises.

However, office-based companies are furious they have not received any help paying their business rates, after most workers were effectively banned from their workplaces throughout lockdown.

David Jones, business rates principal at Avison Young, told City A.M. the number of businesses who have not paid is “quite comfortably tens of thousands, without a shadow of a doubt”.

Meanwhile John Webber, business rates lead at real estate agent Colliers, said that around half of his office-based clients have decided against paying business rates for the period.

“Some clients have taken the view that they shouldn’t pay. Others have realised that they can’t afford to pay,” he said.

“If you’re not earning any income and your offices are vacated, it’s not hard to imagine that people would take the view that they would rather actually stop those payments going out. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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“That’s what a lot of people did, because effectively the shutters had come down on any commercial activity for those three months.”

Jones said a similar proportion of clients have withheld payments.

“Obviously they are hoping the government will provide some help. But why should companies feel they have to break the law to safeguard their businesses? That feels unfair.”

Business rates: ‘A make-or-break issue’

Catrin Diamantino, CEO of English language learning agency Bell Educational Services, told City A.M. that she had not paid business rates on her Southwark premises throughout the lockdown.

She said the company has had no way of making cash, and none of her 80 full-time staff or temporary teaching staff are allowed to use the office.

“Since March our business has been completely shot. We have had no way of making any income since the lockdown happened. We can’t go to work and we can’t teach our students,” she said.

“We have been trying to do everything we can to manage our cashflow.

“But whether or not we have to pay our business rates is really a make-or-break issue in our industry, particularly for London-based companies where the business rates are quite high.

“Authorities in London have particularly been very unhelpful. It is a postcode lottery over whether we have to pay or not, and over whether your business can survive.”

Meanwhile, one professional services company based in the City, which employs about 450 staff, said: “Why has the government only helped the retail and leisure sectors?

“My central London office business is equally incapable of paying their business rates.”

Business rates black hole for local authorities

Concerns are also growing over the size of the financial black hole that will be left in the wake of companies not being able to make their payments.

Avison Young’s Jones warned that central London councils stand to miss out on hundreds of millions in unpaid business rates for the lockdown period.

Central London offices in the boroughs of City of London, Westminster, Tower Hamlets, Southwark, Lambeth, Camden and Kensington and Chelsea, account for around £3.9bn, or about 15 per cent, of 2020/21 net business rates collected across England, according to Avison Young research.

Jones estimated that between 30 per cent and 40 per cent of central London office occupiers have so far not paid any business rates for the lockdown period.

When that is applied to the three months of lockdown, it means that as much as £375m across the central London boroughs may have gone unpaid.

How it works International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Central government decides who gets made exempt from business rates. But local authorities collect the funds, and have been left to decide what to do about companies who did not get the year-long rates holiday but still cannot pay.

While some local authorities have been lenient, others are already moving to recover the cash.

Last week, City A.M. revealed that Westminster City Council has already told companies to pay up.

Westminster told one company that empty rates relief was “not applicable due to Covid-19”. Instead the council advised the person to seek specific hardship relief.

“In the meantime, I advise that you pay as much as you can, when you can,” the council wrote in a letter. “Please be assured that all recovery action is temporarily on hold.”

Webber, of Colliers, said: “For a lot of companies, because they couldn’t see where this was going to end, they would much rather deal with the consequences of an aggressive billing authority as and when that happened.”

Jones added: “Billing authorities are hiding behind legal technicalities around what is deemed empty, because the government will not step in.

“The central London office sector is not some sort of cash cow, being far from immune to the serious financial impact of the pandemic.”

He added that the government should “free up councils to be more sympathetic, and to re-profile rate bills over the next two years”.

City A.M. has approached local councils for comment.

Calls for rates reform

The mutiny comes amid growing calls for the government to overhaul the business rates system entirely, given that more companies than ever will be operating remotely in the wake of the pandemic.

Polling by the London Chamber of Commerce and Industry (LCCI) indicates that more than one in 10 business leaders will shift to working from home permanently in future.

The same respondents said they would not use a permanent commercial office as standard practice after the lockdown ends.

Richard Burge, chief executive of LCCI, said: “Business rates have long needed reform, but the decision has been kicked down the high street by various governments.

“Post-lockdown the system needs reform more than ever, as our research shows an increasing number of businesses saying they will not return to a permanent premise. And previous rate payers will have sadly gone out of business.

“It’s of course vital that however a business operates that it contributes to sustaining public services.

“But having a system of taxation based on land value doesn’t align with the modern world of business, nor does it adequately allow for reduced output during this crisis.”

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Sadiq Khan announces £500million cuts plan to London Underground, Met Police and London Fire Brigade Sadiq Khan has lobbied the government for help filling the gap left by a loss in business rates and council tax income

Sadiq Khan has announced a plant to cut City Hall's costs by up to £500 million to make up for a huge shortfall due to the coronavirus pandemic and lockdown.

Policing, London Fire Brigade and Transport for London are all set to see significant reductions to their budgets over the next two years to make up a black hole left by the fallout from the lockdown.

The Mayor of London announced last week that the combined losses from Council Tax and business rates caused by the economic uncertainty of lockdown are expected to reach £493 million over the next two years.

As well as taking a personal paycut of 10 per cent in solidarity, Mr Khan also announced his intention to move away from City Hall to the Crystal Building in Royal Docks, saving an estimated £55 million over five years.

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Although the Government had made initial pledges to councils and local authorities that they would be supported through the crisis, no additional funding has been forthcoming to compensate for losses of income due to businesses closing or households no longer being able to pay council taxes.

A recent survey found that around 76,300 small and medium-sized businesses had already closed during the lockdown, while the Bank of England has warned that the UK may face its worst recession in more than 300 years.

Mr Khan has repeatedly appealed to the Government for a financial package that would prevent cuts having to be made to core services for Londoners, including policing and the London Fire Brigade as well as a chunk of funding from TfL which may hamper the economic recovery that London and the country need after lockdown is lifted.

Well over half of the £500 million shortfall is being made up by cuts to TfL, which just weeks ago was forced to take an unfavourable £1.6 billion bailout which included £600 million of additional debt.

So far the drop in fare revenues have already cost TfL an estimated £608 million since the lockdown was imposed. Despite digs by the Transport Secretary that the bailout was due to the Mayor's mismanagement of TfL, Sadiq Khan had actually reduced TfL's operational deficit, inherited in 2016 from fomer Mayor and current Prime Minister Boris Johnson, by almost £1 billion to £400 million.

Cash balances were also up by 16 per cent to more than £2 billion over the course of his mayorship, during which time, in 2017, the government had ceased its £700 million a year subsidy to TfL.

TfL will see its budget cut by 11 per cent over two years, with savings of £75.5m to be made in 2020-21 and then £211.9m in 2021-22.

The highest percentage of savings will be made to the Mayor's own budget, down by £57 million over two years, a 22 per cent decrease. The Old Oak Park Royal Development Corporation will lose 21 per cent of its budget, with total savings of £2.6 million.

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The London Assembly budget is down by £2.5 million, a saving of 17 per cent and the London Legacy Development Corporation will be forced to make £9.5 million in savings over two years, around 8 per cent of its budget.

The Mayors Office for Policing and Crime (MOPAC), which funds Metropolitan Police, will see its budget cut by £109.3 million over two years, in addition to around £850 million in cuts since 2010. The new budget reduction makes up around 8 per cent of the total policing budget.

London Fire Brigade, which has also made £100 million in savings and closed 10 fire stations in the last 10 years, will see its budget down 25 million over two years, around 4 per cent of their total budget.

While the revenue loss from business figures is expected to end in 2021, Sadiq Khan also warned that proposed changes to the business rates system could "further disadvantage" Londoners.

A reserve of £118.6 million has already been set aside to ensure the extra 1,000 mayor-funded police officers remain affordable, which may be used by City Hall to protect front line policing, including the future recruitment plans as a result of Boris Johnson's manifesto pledge.

Sadiq Khan, said: "Ministers have repeatedly promised that there will be no new era of austerity as a result of Covid-19. We need the Government to act right now to keep that promise and provide financial support to local and regional authorities across the UK.

"A new era of austerity will not just damage public services – but will strangle the economic recovery that we desperately need to see in order to protect as many jobs as possible.

"The GLA Group could lose £493 million of business rates and council tax income over the next two years which would require significant cuts across the board. While I have prudently put aside significant sums to meet unexpected risks, the scale of the challenge is far beyond anything that any local or regional authority could have prepared for.

"I will do everything I possibly can to support the vital services that Londoners rely upon. That is why I have already proposed to save £55m by relocating City Hall and am taking a 10 per cent pay cut in solidarity with front line workers and all those affected by the pandemic.

"My first priority is to protect front line emergency services – which is why we have outlined proportionately smaller savings for the police and fire brigade – and why I am looking at how the reserves I’ve prudently built-up could be used to protect front line policing services.

"I ask all Londoners to join me in calling on the Government to do the right thing and keep its promise."

Opening certain businesses and venues in England from 4 July 2020

Guidance on the further easing of coronavirus (COVID-19) restrictions from 4 July 2020.

Applies to: England

Guidance on which businesses and venues should remain closed until 4 July 2020.

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On 23 March 2020, the government introduced restrictions on which businesses and venues were required to close in order to reduce the spread of coronavirus (COVID-19). A number of businesses providing essential goods and services were and continue to be permitted to remain open.

Thanks to the hard work and sacrifice of the British people, and despite a tragic loss of life, the UK slowed the spread of coronavirus. Following earlier easements in May and June, from the 4 July, further businesses and venues will be allowed to open.

Re-opening of businesses and venues from 4 July

On 23 June 2020, the Prime Minister announced further easements of the coronavirus (COVID-19) restrictions as part of Step Three of the government’s plan to return life to as near normal as we can.

In addition, all businesses and venues can reopen from 4 July, except for the list below, which remain closed in law:  Nightclubs  Casinos  Bowling alleys and Indoor skating rinks  Indoor play areas including soft-play  Spas  Nail bars, beauty salons and tanning salons  Massage, tattoo and piercing parlours  Indoor fitness and dance studios, and indoor gyms and sports venues/facilities  Swimming pools including water parks  Exhibition or conference centres must remain closed for events such as exhibitions or conferences, other than for those who work for the business or organisation who run the venue.  Cafes, restaurants and shops that are self-contained and can be accessed from the outside, will still be permitted to open.

We continue to phase reopening and we will hope to reopen other close-contact businesses as soon as possible.

All other businesses and venues can reopen from 4 July.

More detail can be found via the link below: https://www.gov.uk/government/publications/further-businesses-and-premises-to-close/further-businesses-and- premises-to-close-guidance

Westminster denies firms business rates relief for empty offices during lockdown

Central London companies whose staff abandoned offices to work remotely during the coronavirus lockdown have been refused business rates relief, City A.M. can reveal.

Westminster City Council has refused to grant the relief to office-based businesses such as accountants, law firms, and consultancies despite their workspaces remaining empty over the period.

The move has sparked anger among local businesses, after Prime Minister Boris Johnson announced in late March that people should not go to work unless they were key workers.

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Some companies have refused to pay the rates as a result, and a number are now seeking legal advice on what to do should the council take recovery action.

In a letter seen by City A.M, Westminster told one company that empty rates relief was “not applicable due to Covid-19”. Instead the council advised the person to seek specific hardship relief.

“In the meantime, I advise that you pay as much as you can, when you can,” the council added. “Please be assured that all recovery action is temporarily on hold.”

Martin Roberts, principal of Addington Capital, a property company which employs 16 people at its offices near Oxford Street, called the decision “very disappointing”.

“Like many other businesses our offices were empty over the lockdown period in compliance with the government’s orders, and we have had the additional burden of setting everyone up working from home.

“There is no doubt that all of this has caused disruption to the business and the way we work.”

John Webber, head of business rates at Colliers International, said the move was “short-sighted.”

He told City A.M. it was a “double-standard”, given the fact that central government has granted retailers, pubs, and restaurants a year of business rates relief.

However, Whitehall declined to extend the measure to office-based companies. Webber said this was “passing the buck” to local authorities.

“Many of our clients in the office sector have been badly impacted by Covid-19 but have received little or no assistance,” he added.

“At a time when revenues have been hit and costs have risen, particularly as many businesses now need to adapt to new rules and regulations as we go back to work, it is short sighted to knock them back for six.”

Currently, office-based properties in the borough of Westminster have a rateable value £1.56bn. The rates bill for the three-month period of lockdown equates to £195m.

A Westminster City Council spokesperson said: “Westminster Council does not decide who pays business rates, it collects on behalf of the government who decide who is liable to pay.

“Offices and non-retailers are still liable to pay and we have lobbied government on this exact point.

“As such and in line with the government’s rules, the council is duty bound to collect the charges, it has no discretion on this point.

“We are trying to help businesses as best we can through offering, for example, payment through instalments.”

Exeter City Council secures landmark ruling at Royal Courts of Justice

Royal Albert Memorial Museum & Art Gallery (RAMM) Royal Albert Memorial Museum & Art Gallery (RAMM) Exeter City Council has secured a landmark ruling over the rateable valuation of the city’s Grade II listed Royal Albert Memorial Museum & Art Gallery (RAMM).

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The decision will have a significant impact on the way many English and Welsh museums are valued in the future, especially those in similar listed buildings with high operating costs.

The case was brought by the Valuation Office as an appeal against a decision made by the Valuation Tribunal for England in August 2018, which set the rateable value of RAMM at £1 from April 2015.

The previous rateable value, also the result of an appeal, was £445,000.

The judgment was made by the Upper Tribunal (Lands Chamber), at the Royal Courts of Justice, in January this year. The Court of Appeal recently refused permission for the Valuation Office to further appeal the original decision.

Due to the importance to the sector, the Council was supported by Arts Council, England (ACE) and the National Museum Directors Council (NMDC).

Cllr Rachel Sutton, the Council’s Portfolio Holder for Climate and Culture, said: “We are relieved by the outcome which is good news for RAMM but also the sector as a whole. Like all other local authorities, Exeter is facing huge financial challenges and the new rateable value will represent a substantial saving at a critical time.

“We are extremely grateful to ACE and NMDC. Without their support this landmark case would have been too costly for us, as a district council, to pursue.”

Sir Nicholas Serota, Chair, Arts Council England said: “We were very happy to support Exeter City Council and the Royal Albert Memorial Museum & Art Gallery in pursuing this case, and we are delighted that they were successful in defeating the Appeal.

“This is a significant judgement which will benefit many museums across the country, ensuring that their resources can be used to concentrate on what they do best – conserving collections and delivering stimulating experiences for their communities.”

The case may well have significance for many other non-profit making museums in England and Wales that occupy historic properties.

Sir Ian Blatchford, Chair of NMDC and Director & Chief Executive, Science Museum Group, said: “This ruling is excellent news for museum colleagues who have waited years for a definitive judgement on a long standing issue. Many of the museum valuation cases that are currently paused in anticipation of this result will hopefully now progress to sensible conclusions. Too much time and energy has been wasted already.

“We applaud our colleagues in Exeter their efforts and endurance to reach such a significant outcome for the sector.”

Colin Hunter, who acted as an expert witness at the hearing, said: “This appeal is the culmination of several years of discussions and appeals on behalf of various museums, both local authority and independent museums.

“The first appeal to reach this level was in respect of the 2000 Rating List for Waltham Abbey Royal Gunpowder Mills, which was followed by an appeal heard by the Upper Tribunal for four properties in York that considered appeals against the 2005 and 2010 Rating List. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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“The detailed 70 page decision in respect of RAMM pulls together all of the previous arguments raised by both the museums and the Valuation Office and provides extremely valuable guidance for how museums should be valued in the future.

In 2018 the Valuation Tribunal for England concluded ‘that in applying the reality principle to the rating hypothesis for this property, it could not reasonably be expected to have achieved, on an open market letting, a positive rent.

The benefit to be derived from its occupation was clearly not financial, and while there may be some socio- economic benefit to this area, this had not been shown to be significant enough to off-set the financial burden which would rest on the hypothetical tenant of the property occupying it for the purposes of use as a museum’.

It meant the Revenue and Expenditure (R&E) basis for valuing RAMM should be used.

This decision was the subject of the Valuation Officer’s appeal to the Upper Tribunal in January.

The Valuation Officer argued that if R&E was used, the resultant value would be £1. Therefore, they proposed, as a matter of legal principle, that the Contractor’s Basis (CB) method of valuation (based on rebuild costs) must be used. Typically CB valuations result in higher rateable values, as can been seen from the outcome of this appeal.

The Valuation Officer’s appeal was dismissed. The judgment recognised the intrinsic high operational costs of occupying a listed building and running a museum and it was made clear that ‘there is no legal principle which would preclude the use of the R&E method in the present case and would require the CB to be used’.

In RAMM’s case the R&E valuation method upheld by this decision results in a rateable value of £1.

Coronavirus: Toilet fears hamper high street return for some

The high streets, retail parks and shopping centres are buzzing with life again as the coronavirus lockdown eases across England. But in many areas public toilets remain closed. So how are people meant to spend their hard- earned pounds, when they can't even spend a penny?

Laura Reid needs to carefully plan her shopping trips - and won't be visiting any in a hurry.

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The 27-year-old has irritable bowel syndrome (IBS) so hasn't been to any shops since they reopened because of a lack of toilet facilities.

"The big thing for me when I go out is 'where is the nearest loo' because you've always got that anxiety in your head," said the journalist, who lives in Barnsley.

"I've avoided going to the shops or supermarket for that reason."

All shops in England are now allowed to open, but with strict safety measures.

There were big queues outside the Nike store in central London on Monday, while people queued for an hour outside Primark stores in Manchester and Birmingham.

But some tweeted to say they would not be joining them at the shops over fears not all toilets would be open.

Jenny Williams, 80, who lives near Coalville in Leicestershire, was diagnosed with rectal cancer eight years ago and lives with an ileostomy bag.

She said she had previously been forced to rush out of a shop because of her double incontinence and so hadn't been into Leicester since February.

"I did have a problem in a shop and I was caught short so I had to leave my shopping. I did not get home in time, so I had to change my clothes and shower," she said.

"Even before lockdown public toilets often had long queues and when I have to go, I have to go.

"I don't have anyone to do my shopping for me but the lack of toilets in shops is putting me off going out."

The charity Crohn's and Colitis UK has urged local councils and shopping centres to open public toilets "as soon as they can, if social distancing measures are safely put in place".

Their campaigns manager, Sarah Hollobone, said: "This will not only dramatically improve the quality of life for people with Crohn's or colitis, but also people with other conditions that require toilet access.

"People with Crohn's and colitis already feel isolated because of their condition and locking up public toilets unnecessarily adds to this."

Scientists in China have found that flushing the toilet with the lid up creates a cloud of spray that can be breathed in and may spread infection, such as coronavirus.

Droplets can travel up to 3ft (91cm) from ground level, according to the computer model used by the scientists from Yangzhou University.

England's larger shopping centres all said their toilets were open but many warned customers to expect reduced capacity.

Westfield, which has two large shopping centres in London, said it was "implementing reduced entry to toilet blocks to ensure social distancing".

Intu, which owns 16 centres in England including the Trafford Centre, said toilets and baby change areas were open but said "the number available may be reduced to support social distancing".

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McArthurGlen, which has six centres across the country including Cheshire Oaks, said its "toilets and changing facilities are regularly disinfected".

The Bullring in Birmingham also said its toilets were open, while Liverpool One said its loos were "open at 50% capacity due to social distancing" and were cleaned every hour.

How many public toilets are there?

There is no official national database of public toilets, though the Great British Public Toilet Map lists about 11,000 which include those in shopping centres, rail stations and anywhere the public can access, as well as those that charge a fee.

Research by the BBC in 2018 found that councils had stopped maintaining hundreds of facilities across the UK since 2010.

According to the Valuation Office Agency, which keeps a database for business rates, there are just under 4,000 free-standing public conveniences in England and Wales.

Public toilets in numbers:

11,000 - Estimated publicly accessible toilets in the UK 4,486 - maintained by councils as of 2018 3,990 - "public convenience" buildings in England and Wales 230 of those are in Cornwall 200 are in Devon

Source: BBC research and Valuation Office Agency

So people visiting shopping centres can expect facilities - with a queue. But what about the town centres where an economic boost is so badly needed?

Local authorities are not legally required to provide toilets, meaning they are often closed as councils look to cut costs, while businesses that provide toilets for their customers have no legal duty to do so for non-customers.

Raymond Martin, managing director of the British Toilet Association (BTA), has called on the government to "put some serious thought" into regulation and funding of changes to public toilets, saying they are a "human right and a human need".

"People are coming out of their houses and they have to use the toilet," he said.

"The government wants people to come out and spend their money but this is about health and wellbeing.

The Local Government Association said the reopening of public toilets was a local decision for councils and should follow government guidance.

"Councils will be taking individual local decisions about public toilets based on a risk assessment and whether social distancing measures can be maintained," a spokesman said.

"People should not assume toilets will be open and plan their journeys and outdoor activities accordingly."

People like Laura Reid are following that advice.

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"If toilets remain shut for sometime, or the queues continue to be long because of the necessary social distancing measures, then it's definitely going to put me off going for anything I need and I'd shop online instead," she said.

"It's a big barrier to me in terms of accessing the high street."

Coronavirus: England's councils 'face large-scale' cuts to services Some of England's biggest councils could see "large-scale reductions" to services as they attempt to balance the books, new analysis says.

A report for the County Councils Network found that 39 local authorities face a funding shortfall of £2.5bn.

It warned councils may have to "use up" all the money they hold in reserve by next year as they deal with the fallout from coronavirus.

The government said it was giving councils "unprecedented" support.

"In total, the government has provided over £27bn to support local councils, businesses and communities in fighting the pandemic, including £600m to help reduce the infection rate in care homes and £300m to support track and trace," he said.

He added the government was working on a "comprehensive plan to ensure councils' financial sustainability over the coming year".

The pandemic has put pressure on local councils with increasing costs of social care and support for the most vulnerable, while income from fees and charges have fallen sharply during the lockdown.

There is also concern that revenue from council tax and business rates will significantly drop as the country faces a recession due to the economic turmoil of coronavirus.

This isn't the first time local authorities have warned about the impact of this crisis on their finances - and it's unlikely to be the last .

Council budgets have been stretched for some time with social care under particular strain.

The problem has been exacerbated by this virus, with care costs climbing and usual income streams falling.

The government has made more money available, but many local authorities have said it falls short of what's needed.

A few councils have quietly suggested they might get to the point they can't legally balance the books, and may have to effectively declare themselves bankrupt.

Others are suggesting further cuts to services will be necessary to meet the shortfall.

Ministers say they are working on a comprehensive settlement to make sure the sector is sustainable.

With the government facing huge demand for financial support in whole range of areas, councils want to make sure their voices are heard.

The report into the finances of local authorities was carried out by accounting firm Grant Thornton UK LLP. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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It found that county authorities could be "particularly vulnerable" in the event of a second wave of the coronavirus.

If there was further outbreak, followed by another lockdown, the report estimates councils could face a shortfall of £4.5bn over the next two years.

The report suggests the government should provide financial support to ensure councils do not run out of money.

Councillor Carl Les, finance spokesperson for the County Councils Network and leader of North Yorkshire County Council, said local authorities are "grappling with increased cost pressures".

"We want to work with government to develop a comprehensive plan to support councils over the coming months and years."

Further support needed to save high street retailers, says Sports Direct CFO More high street shops risk going out of business without further Government support during the coronavirus pandemic, Sports Direct’s chief financial officer has said.

Chris Wootton said the UK high street was already in “turmoil” before lockdown measures and would need further financial assistance to survive.

Speaking to Sky News’s Sophy Ridge On Sunday programme, he warned that without such support, “many more retailers will go to the wall”.

“The high street has been in turmoil for some time and it needs all the help it can get,” Mr Wootton said.

“I will credit the Government on the business rates relief that we got, but that is something that needs to be looked at more permanently to help save the high street, because business rates are a key issue in doing that.

He said Sports Direct would be reopening its stores on June 15, in line with Government guidance.

The company will introduce protective screens around tills, sanitisation stations and safety signs and stickers throughout stores, Mr Wootton said.

Asked why he previously described the Government’s plan to reopen shops as a “shambles”, Mr Wootton said: “They have been very vague on their guidance.

“I think privately and publicly retailers were expecting to open on June 1. I have been very public in our views that the Dominic Cummings fiasco led to the Government panicking and pushing that back.

“They opened car showrooms from June 1, which frankly didn’t make a lot of sense given a lot of retailers, including ourselves, have stores of significant size which are at least as big as car showrooms.”

In March Sports Direct’s chief executive Mike Ashley faced fierce criticism from MPs after he tried to claim the company was an essential operator for keeping the nation fit in a bid to keep stores open.

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The businessman performed a U-turn and closed his stores, later apologising for “ill-judged and poorly timed” emails to the Government and poor communication with employees.

Asked if he believed it was a mistake to try to keep stores open, Mr Wootton said: “I’d like to correct you on that, we were just asking for guidance from the Government as to whether we should stay open.

“Michael Gove decided to go on Piers Morgan in the morning (ITV’s Good Morning Britain show) and try and use us as a political football. It does seem to be one rule for us, and another for others.”

Coronavirus: Sports Direct CFO calls for more support for ailing retailers

Further government support is needed to prevent more high street retailers from going out of business, Sports Direct’s chief financial officer has said.

Speaking to Sky News’s Sophy Ridge On Sunday, Chris Wootton warned that without support, “many more retailers will go to the wall”.

“The high street has been in turmoil for some time and it needs all the help it can get,” Mr Wootton said.

“I will credit the government on the business rates relief that we got, but that is something that needs to be looked at more permanently to help save the high street, because business rates are a key issue in doing that,” he continued.

Sports Direct is due to reopen its shops on 15 June, following government guidance. It will introduce protective screens, sanitisation stations, and safety signs, Wootton said.

Wootton has previously described the government’s plans to reopen shops as a “shambles”. Elaborating on this he said: “They have been very vague on their guidance.

The company came under fire in March when its CEO, Mike Ashley, tried to claim it was an essential operator and therefore stores should stay open.

He later changed his line on this, apologising for “ill-judged and poorly timed” emails and poor communication.

Wootten denied this was the case, saying: “I’d like to correct you on that, we were just asking for guidance from the Government as to whether we should stay open.

Retailers have been struggling amid coronavirus lockdowns. Accountancy and business advisory firm BDO said its monthly High Street Sales Tracker (HSST) found total like-for-like sales, consisting of both in-store and non-store (online) sales, declined by 18.3% in May - the second worst result on record after April’s 29.6% decline.

Britain went into lockdown on March 23 to slow the spread of the novel coronavirus, with all retail stores deemed "non essential" forced to close.

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After Covid we're going to need a serious urban regeneration plan

The government must urgently devise a strategy to devolve both power and money to a local level

Even before the arrival of Covid-19, the future for Britain’s high streets looked bleak. For at least two decades there has been talk of how town centres need to be rethought. The pandemic has made the need for action critical.

The next few weeks are not going to be a problem. Consumers, having been cooped up for so long, will be out in force when non-essential stores open for business on 15 June. Even though consumer confidence is extremely low, the lack of spending opportunities since the country went into hibernation in late March means that many people are both cash rich and in need of some retail therapy. High streets will get the benefit of a post-lockdown sugar rush.

Rishi Sunak has provided help for the retail sector by providing grants, a business rates holiday, a deferral of VAT payments and wage subsidies for furloughed workers. These, though, are only short-term fixes from the chancellor. The VAT still has to be paid; the business rates holiday will end; the furlough scheme is being wound up at the end of October.

Before too long, the old familiar problems – and some new ones – will need to be addressed. Problem number one is that the shift of big retailers to edge of town locations has meant there is excess retail capacity in many high streets. Put simply, in many town centres there are now far too many shops given the amount of spending that is actually taking place.

Problem number two is digital disruption: the ever-increasing share of spending that is happening online. The future of the traditional department store looks bleak because any consumer can have the department-store experience on their laptop or smart phone, only with lower prices and without the inconvenience of getting the bus into town or finding somewhere to park the car.

Problem number three is that even those consumers who were late adopters to the idea of online shopping have now had a taste of it during the lockdown. Retailers fear that even those who like the physical pleasure of leafing through the books in Waterstones or trying on a dress in Jigsaw will bridle at having to mask up if they want to use public transport and wait in a socially distanced queue before they can be safely admitted to a shop. Given how easy the alternative is, those fears are well-merited.

The outlook is bleaker in towns than in big cities, and bleakest of all in the old industrial towns, where the hollowing out of manufacturing in the 1980s has been followed out by the hollowing out of retailing in the past two decades. Getting town centres humming again is central not just to economic regeneration but to improving wellbeing. The boarded-up shops, the pawnbrokers and the fast food outlets, according to a paper on England’s health inequalities by the Bennett school of public policy at Cambridge University, are closely linked to their inhabitants’ health outcomes.

The paper found that the built environment of towns, including the provision of green spaces and the kind of retail options they provided, made a real difference to life expectancy, prevalence of lung cancer and levels of obesity among children. In the more deprived towns, the previous upward trend in life expectancy had stalled or even gone into reverse.

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Against the backdrop of a higher incidence of Covid-19 in the poorer parts of the country, the authors of the paper conclude: “There is an overriding need for policies to address the large and widening gaps in the health and economic fortunes of many towns, and these should be integral to the ‘levelling up’ and economic recovery agendas.”

Thus far, it has to be said, there doesn’t appear to be much of an economic recovery agenda. There is plenty of crisis management going on and a sense that the government is responding to events rather than planning for the future. Hence the weekend talk of speeding up the reopening of the hospitality sector because of fears of massive job losses.

The wartime coalition government found time to commission the Beveridge report, rethink education policy and sketch out plans for post-war full employment. A similar approach will be needed to reinvigorate town centres as part of a wider regeneration programme.

Some things are obvious. In most parts of the country, town centres will be about more than retail. Instead, the idea should be to make the middle of towns and smaller cities places were people live and work, not just shop. That would help in two ways: it would reduce the average age of the population, and it would encourage the growth of businesses to cater for the demands of young, working people with money to spend.

Nicholas Falk, who founded Urbed in the 1970s – a consultancy that specialises in urban development and regeneration – made a number of suggestions that would make a difference, noted in a recent article for the Academy of Urbanism journal. These included the redevelopment of redundant retail space and surplus car parks into homes, workplaces and community hubs or social spaces. Local authorities, he says, should take over key buildings if they lie empty too long, as happened in bomb-damaged Comprehensive Development Areas after the second world war.

“Where town centre development is no longer viable, retailing will have to contract so better uses can take over. This requires government to play a more proactive role. Publicly owned land could be pooled, as it is in Copenhagen and Hamburg, with compulsory purchase orders used as a threat.”

All sensible stuff. What is needed is a government strategy for urban regeneration that involves the devolution of both power and money to a local level, plus a recognition that the time to act is now.

Business rates firm threatens clients with winding-up orders and bankruptcy

Rating And Valuation Company accused of using scare tactics to get paid

Times are tough enough for shop owners without being hounded by a bunch of chancers.

Like Rating and Valuation Company Limited, a firm that claims to help cut business rates.

I’ve heard from retailers who say they have been hit with hefty invoices by this company, even though it has not reduced their rates.

It wants a 15% commission from its clients off the back of the business rates cuts announced by the Government, first to help fight the High Street slump and then to help survive lockdown.

Malcolm Sibson runs Copplestone Bridal in Liverpool and had signed a contract with Rating And Valuation Company, paying £695 and agreeing to a further 15% of any rates reductions it achieved.

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“Rating And Valuation Company challenged my rates with the Valuation Office Agency but this was rejected and so was their appeal,” said Mr Sibson.

“They achieved nothing, the only rates reduction has been entirely due to the Government.

“I have a witness to my meeting with their representative at which he categorically stated that I would not have to pay anything unless their company achieved a reduction.”

Rating And Valuation is claiming commission on the Government announced reductions, pointing to a clause in very small print that states it can claim commission following a rates reduction “whether or not achieved by Rating And Valuation Company”

The invoice it sent to Mr Sibson comes to £5,059 including legal costs.

The correct way of dealing with a disputed debt like this is to take the matter to a County Court for a judge to decide.

But Rating And Valuation Company is trying to circumvent accepted court procedure by issuing a statutory demand without any hearing.

The order states: "We seek to issue a winding up order to the company and will seek bankruptcy on any directors."

Another of its clients is Tommy Badham of Worcester restaurant Ostlers. He is so angry that he's set-up a Facebook page called Rating and Valuation Company - Scam

“They have invoiced me for 15% of the reduction the government has awarded because of Covid-19,” he says.

“They are threatening me that if I don’t pay this plus a £200 administration fee I will have to pay a termination fee £995 plus VAT and court fees which could end up between £5,000 and £6,000.

“I have been in touch with my local council and was told that Rating And Valuation Company have made two challenges against my business rates, the first was rejected and the second is still ongoing.”

Hylton Haylett runs the Oak Inn in Staplow, Herefordshire, and describes Rating and Valuation Company as bullies after being billed for a supposed rates reduction.

“Their representative told me that I had a very very good chance of a rates reduction and should not have been paying rates at all,” he said.

“We checked with the Valuation Office and found that their challenge on our behalf had been rejected.

“We went back to them and said they'd lied to us and wanted nothing more to do with them, so they then sent an invoice for a £900 termination fee and £200 administration fee.

“When the government announced the Covid-19 rates suspension they sent another £900 invoice, claiming 15% of the saving that they had had absolutely nothing to do with.

“They wanted £2,700 in 14 days and I got an email threatening me with a winding-up order if I did not pay.”

Andrew James runs family firm James Furnishers in Rugeley, Staffs.

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“Their sales rep said that all our neighbours were paying less than us and we could get back around £36,000 backdated over five years,” he said.

“We paid £1,200 upfront but would get it back if they did not recover anything, so they said it was risk-free, and they would get 15% of any reduction.”

He says “You literally need a magnifying glass to read the small print on the back of contract” and insists that the crucial clause in which they can claim commission even if someone else achieves a rates reduction “should be in readable font on the front”.

Now he's been billed for £2,840 after the Government announced it was suspending business rates.

“They threatened to have my company wound-up,” he says.

“They're just trying to see if we will buckle and my advice to anyone in the same position is do not pay.”

Rating And Valuation Company is run from Liverpool and has one director, 38-year-old Yamina Mekchiche.

“We have invoiced as per the terms and conditions of our agreements,” she told us.

“We do genuinely try to help each of our clients to the best of our ability and obtain them the correct rates.

“You will find that with all of the aforementioned clients we are legally entitled to our fee.”

Although the firm claims that it employs surveyors, she admitted they are not chartered surveyors.

“We are not chartered because we do not need to be, we have helped and achieved rates reductions for many clients and we charge one of the smallest fees in the field.”

As for complaints about the small print, she responded: “As a business contract, it is legally the client’s responsibility to read the contract, the presenting business does not need to go through any terms.

“Yet we do sit with the clients and try and explain things.”

It has not yet sued any client, so the contracts have not been tested in court.

NORTHERN IRELAND

Property valuation in an uncertain market

Commercial property inspections are still restricted in Northern Ireland

IT won't surprise anyone that currently valuing any commercial property in the context of the Covid-19 pandemic is difficult.

In an industry that relies on sales evidence to support opinions on the value of physical assets, valuing without inspections and with only limited (if any) reliable comparable sale transactions is at best challenging, sometimes simply not possible.

Even so, instructions on valuations are being received and accepted where they can reasonably be carried out. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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Property inspections are still restricted in Northern Ireland, so the limitations on the instruction have to be explicitly agreed in the terms of engagement and clearly set out in the report.

If the client agrees, valuations can be produced subject to a deferred inspection and measurement which is often a sensible and practical approach.

Clearly this is not a normal functioning market and the RICS acknowledged that fact in a “valuation notification” shortly after the pandemic was announced in March.

Market activity is being impacted in many sectors. As at the valuation date, we consider that we can attach less weight to previous market evidence for comparison purposes, to inform opinions of value.

Indeed, the current response to Covid-19 means we are faced with an unprecedented set of circumstances on which to base a judgment.

Our valuation(s) is/are therefore reported on the basis of ‘material valuation uncertainty'. Consequently, less certainty – and a higher degree of caution – should be attached to a valuation than is normally the case.

Given the unknown future impact coronavirus might have on the real estate market, we recommend that you keep the valuation of under frequent review.

While the decision to declare a valuation “materially uncertain” is that of the valuer, in reality this clause is being included in all valuations at present. It does not mean the valuation cannot be relied upon, but it signals a clear note of caution to anyone relying on it, that less reliance can be placed on the figure than would normally be the case.

Declarations of material valuation uncertainty only continue for long as circumstances apply. To advise industry the RICS set up The Material Valuation Uncertainty Leaders Forum to consider the global Covid-19 pandemic impact on valuations, particularly with relevance to financial statements.

While the UK Government and Stormont Executive wrestle with their own recovery strategies, the forum (which is meeting weekly given the rapidly evolving government advice and regulations), has indicated the material uncertainty clause should only be lifted in a gradual and phased way.

In their meeting on May 14 there was a consensus that reporting material valuation uncertainty may no longer be appropriate for:

• Long dated annuity income with at least 20-years unexpired term certain with a secure covenant such as government or very strong investment grade.

• Standalone food stores let to major operators.

•Institutional grade primary healthcare facilities.

After meeting on May 21 and then again on May 28, the following were added to the list:

• Non-reversionary residential ground rents (in excess of 80 years).

• Specialist supported houses let to registered providers on FRI leases and all types of rented social housing owned by housing associations.

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• Smaller format food stores let to major operators.

• Commercial forestry.

Although the above categories are admittedly “niche”, week by week the “asset classes” are broadening. The forum's advisory is only high level and it does not take into account property specific factors. The decision to declare or not declare “material uncertainty” is that of the valuer on a case-by-case basis.

In Northern Ireland we have few assets that could fall into the above secure investment categories and even in the context of a normal functioning market, a yield differential to prime GB values usually applies, reflecting our smaller and less liquid market.

The declaration of “material uncertainty” in valuation reports in Northern Ireland will continue for some time but the body of sales and rental evidence that we need to support our opinions will emerge as our markets gradually recover and normalise.

We shouldn't forget that the economic context today is quite different from the aftermath of the financial crash of 2007/08 and the muddy waters may clear more quickly than you may think.

Gareth Johnston is director at Lisney (www.lisney.com) in Belfast

SCOTLAND

North-east bosses warn of job losses and collapse of firms as Scottish Government rejects business rates relief appeal

North-east business bosses have warned of job losses and permanent closures after the Scottish Government snubbed pleas to change the law on business rates during the pandemic.

Industry leaders and opposition politicians have pushed for a change in the rules around unoccupied property relief while shops and offices remain closed.

Companies can have their business rates waived if they can show the property is vacant of people and “all moveable items”.

But firms claim it is “completely unreasonable” to have to empty premises of furniture or goods while they continue not to trade in phase two of lockdown easing.

The government has announced a £2.3 billion business support package and offered relief to firms in the hospitality, tourism and retail sectors.

But historically high property prices in the north-east mean many firms do not qualify for relief as their properties are too valuable.

Now public finance minister Ben Macpherson has confirmed “there is not an intention to make changes” to the law, in a letter to campaigners.

Carlton Rock boss Alan Massie warned businesses could be driven out of the north-east if the rates system is not changed.

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He said: “The high level of business rates set by the Scottish Government is draining firms of money in Aberdeen to the point it’s simply too expensive to do business, resulting in job losses.

“The requirements which also have to be met by businesses to obtain empty property relief are completely unsustainable when they are not trading.

“The hurdles businesses in the north-east are faced with are completely unreasonable and unacceptable, which is why the issue of rates in all forms must be addressed.”

Mr Macpherson, whose ministerial brief includes business rates, said councils should “interpret” around administering the levy and relief measures.

Head of property firm Knight Frank’s Aberdeen office Eric Shearer said while that was “technically correct”, it was “badly wrong for businesses”.

“The government could fix it but chose not to,” he said.

“Councils do have the power to do it themselves but it’s the eternal cycle of there being no confidence they will get the money back from the Scottish Government if they do.”

“The change would have made such a difference and the reality is it wouldn’t have lasted much longer than a couple of months.”

Mr Macpherson also directed businesses to their bank in the first instance if they ran into difficulty, something north-east MSP Liam Kerr said was “shocking and completely unacceptable”.

He added: “For ministers to completely disregard the needs and desperate situation of businesses on the brink by refusing to suspend the condition of empty property relief is quite simply appalling.”

Scottish bailout puts Trump's golf resorts in line for £1m tax rebate

Tax expected to be waived as part of emergency coronavirus funding

Donald Trump’s Scottish golf courses are expected to get a tax rebate of nearly £1m as part of a government bailout for tourism businesses hit by the coronavirus crisis, the Guardian can reveal.

The Trump Organization’s golf resorts in Aberdeenshire and Turnberry will benefit from emergency funding from the Scottish government worth £2.3bn, which includes waiving the property taxes paid by hospitality, leisure and retail businesses this year.

Before the coronavirus crisis, Trump Turnberry had been due to pay £850,766 in property tax this year and Trump Aberdeenshire £121,170. The Trump Turnberry’s tax bill was recently reduced to £770,845, upon appeal.

This week South Ayrshire, the local council which includes Turnberry, and Aberdeenshire council are expected to tell both businesses they no longer have to pay any of that tax, known as business rates, because they qualify for 100% relief.

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Both resorts have been able to avoid paying corporation tax, the main business tax in the UK, because they consistently report heavy losses due to their debts to Trump himself, cumulatively put at £155m in 2018.

The revelation comes as some Democrats in the US Congress raise questions about whether it is lawful for Trump’s companies to accept any benefits from a foreign country, including bailout funds from the UK and Scottish governments.

The House oversight committee asked the Trump Organization to supply it with all documents related to the company’s applications for loans or other funds by 21 May. There is no evidence that the company has complied with the request.

One ethics expert in Washington stopped short of saying the property tax benefit represented an illegal gift under the emoluments clause of the US constitution – which was designed to block federal officials from receiving foreign payments – but said the tax rebate was nevertheless problematic.

The US Congress has passed legislation prohibiting US taxpayer funds from being used to benefit companies in which Trump holds a stake.

More support for small businesses Grants extended to help more companies in need.

Small businesses which share properties but do not pay business rates are now eligible to apply for grants to help with the impact of COVID-19.

The extension to the Small Business Grant Fund will apply to firms occupying shared office spaces, business incubators or shared industrial units and who lease the space from a registered, rate-paying landlord. Separately, eligibility has also been extended to companies occupying multiple premises with a cumulative value of more than £51,000.

From today, eligible businesses will be able to apply to their local authority for grants of up to £10,000.

It has also been confirmed that the Small Business Grant and Retail, Hospitality and Leisure Grant schemes will close for new applications on 10 July. Latest figures up to 2 June show that £824.541 million has been distributed to 72,622 businesses across Scotland through the schemes, but that new applications have slowed in recent weeks.

Finance Secretary Kate Forbes said:

“Our comprehensive package of business support is now worth more than £2.3 billion. Our programme is kept under constant review, and we are always looking for ways to extend eligibility to help more businesses. That is precisely what we are doing today.

“New applications for the Small Business and Retail, Hospitality and Leisure Grant schemes have slowed in recent weeks as large numbers of businesses have already applied. We are committed to ensuring every penny we receive from the UK Government for business support - and more – will be passed to businesses. It is essential that

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we do not allow funds to sit for too long in schemes that are attracting few applications, so we have decided to bring these to a close next month. That will mean that any remaining money can be re-routed to help businesses in other ways, as we have already started to do for the Pivotal Enterprise Resilience Fund.

“I would encourage the owners of any eligible small business which needs support to consider applying through their local authority during the next five weeks and before 10 July.”

Background

Further details on these grant schemes.

Applications for a Small Business Support Grant may now be made to the appropriate local authority from tenants that are a registered business or partnership, have a lease signed before 17 March 2020, employ at least one person and have a business bank account.

From 5 May, the Small Business and Retail, Hospitality and Leisure Grants were extended to businesses with multiple properties. This included businesses with a number of properties whose cumulative rateable value exceeded £35,000 (making them ineligible for the Small Business Bonus Scheme, thereby preventing them from accessing the Small Business Grant) and whose individual rateable value does not exceed £18,000 (thereby preventing them from receiving a Retail, Hospitality and Leisure Grant). To date, the cumulative rateable value of all such properties held was capped at £51,000, but from 8 June, this is increased to £500,000.

Schedule 3.1 of the Scottish Government’s Summer Budget Revision confirms the budget for the Small Business and Retail, Hospitality and Leisure Grants as £1.202 billion.

WALES

Bira welcomes business rates revaluation postponement in Wales The news comes as Bira created a five-step guide to help independent retailers open again with confidence later this month

The British Retailers Association (Bira) has welcomed the decision by the Welsh government to delay the revaluation of business rates.

The announcement follows a similar ruling made in England on 6 May, which resulted in the government scrapping a bill to reevaluate business rates in 2021.

The decision to postpone the revaluation in England, made following pressure from Bira and Altus Group, will help reduce uncertainty for firms affected by the impact of Covid-19.

Following the decision to do the same in Wales, Andrew Goodacre, Bira’s CEO, said: “We are delighted with this common sense decision, following the lead set by the UK government.

“Rates can only be reassessed once we understand the impact in rental values following Covid-19.” International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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The news comes as Bira created a five-step guide to help independent retailers open again with confidence later this month.

The five-step guide to a Covid-secure reopening takes members through what they need to do to be safe and compliant ahead of reopening on 15 June .

It also contains valuable guidance for those already allowed to trade – steps such as completing a risk assessment.

Coronavirus: Call for £250m recovery fund in Wales Many of Wales' poorest areas have been hardest hit by the pandemic

A coronavirus community recovery fund worth £250m should be set up to support the hardest-hit communities, the Welsh Conservatives have said.

The party's group leader in the Welsh Parliament said it would help address a "public economic crisis".

Paul Davies said business rates could be scrapped for certain businesses in the worst-affected towns.

He said the money was already available, but Welsh Labour has questioned the figures.

The Conservatives' policy announcement follows the publication of a report that claimed a number of Welsh towns were among the most vulnerable across the UK.

Under the party's plans, a £250m fund would be established for the term of the next Welsh Parliament to support the worst-affected communities.

The Conservatives said it would allow the establishment of "business rate-free zones" where businesses with a rateable value of up to £15,000 would not have to pay the rates for three years.

Currently, businesses with a rateable value of less than £6,000 are exempt from paying rates and the amount payable is tapered for those valued between £6,000 and £12,000.

"We are going through not only a public health crisis, but we're also going through a public economic crisis," Mr Davies told the BBC's Politics Wales.

"And that's why it's absolutely crucial now as we come out of this pandemic that we support the communities which will be hardest-hit by this pandemic."

Mr Davies said the business rates relief scheme would "support those existing businesses in those communities, but also attract new businesses".

He claimed there was enough money in the Welsh Government's coffers to pay for the scheme as a result of UK government spending on the pandemic in England.

But a Welsh Labour spokesman said that was not the case: "The Welsh Conservatives seem not to understand that there are strict limits in the extent to which we can carry forward funds from one year to the next, with our maximum reserve being £350m.

"Small businesses with premises with a rateable value of less than £12,000 already get small business rate relief. International Property Tax Institute IPTI Xtracts- The items included in IPTI Xtracts have been extracted from published information. IPTI accepts no responsibility for the accuracy of the information or any opinions expressed in the articles.

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"While extending this further would be desirable, we would only be able to consider doing so if the Conservative government at Westminster were to provide a significantly more generous financial settlement."