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Repaying business rates relief claimed due to COVID-19

23 December 2020: HM Treasury confirms that repayments of business rates relief claimed in light of the potential impact of the coronavirus pandemic are tax deductible.

Earlier this year, many businesses claimed business rates relief, anticipating their business would suffer severe adverse consequences from the impact of the coronavirus pandemic. As time passed some organisations were not as badly affected as they expected and so decided to repay the relief.

The existing law would have left the full relief in charge to tax even though it had been returned to the relevant administration.

In guidance published on 22 December, HM Treasury has now confirmed that: "The government intends to legislate to provide clarity that the repayments of business rates relief should be treated as if they were business rates payments and so should be deductible for tax purposes. The government also intends to specify the timing of the deduction as the same period the original payment of business rates would have related to."

Budget analysis from the Tax Faculty

Tax Faculty commentary of the Budget will be available on Budget Day with full analysis to follow our live webinar.

The Tax Faculty will be hosting its live webinar on 5 March 2021 to discuss the tax-related announcements in the Budget. The webinar will be free for Tax Faculty members. Register to attend.