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tesco store

An extension of business rates relief in Scotland is to be application based to avoid major supermarkets automatically receiving it.

The three-month extension, taking the relief to 30 June, was announced yesterday in the Scottish Budget.

It comes after a string of supermarkets announced in December they would hand back £2bn in business rates relief to UK and devolved governments. Tesco, the first supermarket to make the move, paid back £585m, including £60m to the Scottish government.

With no mention of an exclusion for supermarkets in Scotland’s extension, the prospect had been raised of the same retailers again receiving an automatic business rates tax break for the extension period.

However, a Scottish government spokeswoman told The Grocer: ”To ensure the relief only goes to those businesses who require it, we plan to make the retail, hospitality, leisure and aviation non-domestic rates relief application-based in 2021-22.”

The relief had previously been set to expire on 31 March. No extension beyond that date has yet been announced by UK government.

The Scottish government also said yesterday that, should Chancellor Rishi Sunak extend the relief in England in the forthcoming budget, it would use any money it received to go further. 

Robert Hayton, UK president of real estate advisor Altus Group, said Sunak needed to extend the relief to avoid a cliff edge for businesses after 31 March.

“If the end of the pandemic is indeed in sight, it has never been more important than now to ensure that viable businesses are supported adequately during these final months,” he said.

“The Chancellor has to avoid a cliff-edge through withdrawing reliefs too early but he also cannot risk repeating the mistakes of the past where support was arbitrary rather than targeted to those most in need.”

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