IGA to government: Extend business rates relief to garages
Published: 30 March, 2020
The IGA is asking government to extend business rates relief to independent garages, as they work to keep the country’s cars on the road through the Coronavirus outbreak
Today (Monday 30 March) The IGA wrote to Secretary of State for Housing, Communities and Local Government Robert Jenrick MP, urging him to offer business rates relief to garages.
In the letter, IGA Chief Executive Stuart James said: “The government have rightly supported businesses with a rate relief package, however many small retail businesses that serve the consumer directly appear to fall outside the scope of the above relief.
“It is our understanding that retail businesses that operate from industrial premises, such as local independent garages, do not qualify for the relief by nature of the classification of their premises.
“Garages businesses have been classified as essential services during this crisis to ensure that key workers continue to have access to vehicle maintenance and repairs, and ensure they can fulfil their roles for the nation.
He added: “We urgently ask that the government review and expand the Retail Business Rates Relief scheme to include retail businesses that operate from industrial premises such as independent garages, to enable them to stay open for the benefit of our key workers.”
- IGA urges Minister to clarify inconsistencies in business rate relief
The IGA has written a follow-up letter to Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government, regarding the inconsistency of local authorities’ classification of independent garages within business rate relief legislation.
The IGA is requesting that retail businesses operating from industrial premises are specifically included on the list of businesses eligible for the Retail Business Rates Relief Scheme.
IGA Chief Executive Stuart James said: “Independent garages are being asked to remain open to support key worker mobility, but a high level of inconsistency remains across local councils when it comes to support.
“We urgently ask the Secretary of State to provide clarity to local councils that garages are retail businesses, and as such are eligible for the assistance under the Covid-19 Retails Business Rates Relief Scheme and Business Interruption Grant.
“Including these local garage businesses specifically will enable them to stay open for the benefit of our key workers and give them the best chance of survival through the crisis.”
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- Shifting demands, shifting gears
Garages that thought they would be veering away from MOTs in favour of essential repairs during the Coronavirus lockdown are still doing MOT tests at roughly the same rate, it has been suggested.
While DVSA figures showed a 78% drop in MOT performed between 30 March and 24 April, marketing agency Digital Incubator says the independent garages it works with that remained open during the lockdown have not seen such a steep drop.
“We have a lot of garage clients that have switched from MOT campaigns to clutch and gearbox work,” explained Jamie Stoulger, Sales Director and Operations Manager at Digital Incubator. “However, our clients are still generating a steady flow of MOT enquires.”
Campaigns
The marketing agency works with garages across the UK, and currently has over 1,200 motor trade campaigns ongoing. 80% of customers are in the independent sphere.
Jamie continued: “Regardless of the MOT not being relevant, people are still getting their cars picked up. A lot of our clients run a collect and delivery service. We are running that via the ad campaigns and on the website.”
There has been an impact, Jamie confirmed, but a mild one at best, and work overall continues: “MOTs have slowed down slightly, that just what it is, but regardless of us being in the middle of this pandemic, if someone still has to go into work and their car breaks down, they still need to get it repaired. They are not going to just leave it on the side of the road and deal with it six months later. You need it done. As a result, our clients are still generating leads.”
Performance
We asked Jamie he thought this has taken many of their garage clients by surprise. “I wouldn’t say so,” he replied. “There are a lot of franchised dealerships and service centres that have just closed their doors without even thinking about it. They just went ‘we can get funding, let’s just put everyone on furlough’. The garage businesses that decided to pummel through this, they are still performing. There might be a small dip in some cases, but across the board, our averages have not really dropped. I don’t want to make a bold statement and say it isn’t affecting anyone – it is – but they are on average not far behind where they usually are. It has hit them, but we are not talking about 50%. The drops in business are probably around 10% to 15%.”
Situation
On what has been in many cases blanket closure by across much of the franchised network, Jamie observed: “I worry about the outlets that are closing their doors without making the slightest attempt at generating business. It’s still out there. People forget that. Across the board, if you think about it logically, there might only be 50% of the business available, but if 80% of the outlets are closing down, the garages staying open will benefit. I think a lot of businesses are going to come back to a very big decline in their own customer base. Their customers have had chance to test another garage out. If they had a better service, I know where they will go the second time around.
“I think some businesses have taken things a little too far. There are things you can put in place, like contactless pick-up and delivery. Dealerships could have put in place what the independents have done to keep their workers safe and the customers safe. If you can, do everything contactless. A lot of companies are going to go bust because of this. The best bet is to do things safely, ensure it is all contactless, but keep the doors open. The business is out there, they just need to be a bit more open about how to get it.”
