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Can I apply for business rate relief due to a Material Change in Circumstance?

View profile for Claire Battye
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The Government recently announced a business rate holiday for all leisure, hospitality and retail businesses in the UK due to the impact on the sector caused by the coronavirus pandemic.  There is no such relief however for businesses who have not been forced to close but who have empty premises due to the Government guidance on social distancing and working from home.  Claire Battye, Commercial Property Partner, explains here how you may be able to apply for a relief under the concept of a Material Change in Circumstances (MCC) and how we can assist you in this area.

What is a Material Change in Circumstance (MCC)?

An MCC is a physical change that impacts the profitability or operational capabilities for your business.  A typical example would be if you run a shop on the high street and there are road works occurring that are causing a downturn in your footfall. 

“In these circumstances, you may be able to apply to the Valuation Office Agency (VOA) for a reduction in your rates,” explains Claire.  “If you have seen a 20% decline in your turnover caused by a material change, for example, you could in theory appeal to the VOA to have a 20% reduction in your rates.”

Is coronavirus a Material Change in Circumstance?

We are currently in unchartered waters and, at the time of writing, there has been no indication from Government as to whether businesses outside of the leisure, hospitality or retail sectors will have any relief to their business rates. 

“The difficulty facing businesses at the moment, particularly those operating from offices and warehouses, is that even though they have not been forced to close as those in other sectors have, they are being dictated by the social distancing and working from home regulations,” explains Claire.  “So, while their premises remain open, all of the guidance says that they shouldn’t be using the building, but they are still liable for the associated costs in having that building, such as the rent, utilities etc.”

How do I make an appeal for a business rate relief?

As already indicated, there has been no word from Government as to whether businesses can apply for some sort of relief, and whether coronavirus would be eligible as an MCC.  However, there are agencies who can advise you as to your likelihood of success in making such an appeal, depending on the disruption being caused. 

“Ordinarily, an appeal of this nature would need to be applied for during the period of disruption, so we would recommend contacting an agency to discuss your options sooner rather than later,” concludes Claire.  “We work with a number of agents who we can put you in touch with who can offer a no-win, no-fee solution, and can offer you practical advice as to the best course of action for you.  They can discuss with you whether there are other options available to you, for example whether applying for empty property relief may be viable, and can take the burden of making the appeal application off your shoulders so you can focus on seeing your business through these turbulent times.”

To discuss making an appeal, you can contact Claire or the Commercial Property team on 023 9277 6503 or email clairebattye@warnergoodman.co.uk.  While we are not currently offering face to face appointments, we are working remotely and so can assist you in your legal needs over the phone, via email or video conferencing. 

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.