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.
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.”