Business rate reliefs and exemptions

The pressure on the Government to lower business rates had brought several reliefs and exemptions being made accessible, with a few local regulatory offering options reliefs to local companies that meet their conditions.

Business rates have been a major burden on UK businesses since 1990. Getting a relief in monthly payouts makes a significant difference between working as a solvent or falling into unmanageable debt and ultimately closure.

Directors must know all about the business exemptions and reliefs and take full benefits of the deductions offered by the local bodies. So, what are the small business rates relief and exemptions available?

Small business rates relief

You are eligible for small business rate relief if:

• The value of your property is less than £15,000.
• You use one property for your business. However, you can still get relief if you use more than one.

Business rate relief available

For a property valued at:

• £15000 the ratepayer will get up to a maximum relief of 100%.
• £12000 the ratepayer will get complete relief of 100%.

The property's value, either one or more, should not exceed £19,999 out of London and £27,999 in London for which you are claiming the relief.

Once the property's value increases above this, the relief will stop. Additional support is extended to small businesses. Companies that take on an additional property usually would have meant the small business rate relief loss; the Government affirmed that it would maintain the relief for 12 months.

You can apply for small business rate relief online. Just submit the form, and you're done.

Rural rate relief

You are eligible to get a compulsory relief rate of 50% for businesses in the rural areas positioned in a location with a population lower than 3000. It can become 100% at the will of your local regulatory body. Rural businesses with a value of lower than £ 165000 can file for additional business rate reductions.

Enterprise zones

There are 24 enterprise zones in England, a scheme proposed by the Government for better trade opportunities to help communities offer jobs in local places.

If your business falls in any of the zones, you can file for 100% relief on business rates for 5 years, with the condition that you have shifted to established before March 2018.

Prepare a full list of England enterprise zones available on the government website, collect all the information, and apply if you meet the eligibility criteria.

Exempted buildings and unoccupied buildings relief

Properties that are relieved from business rates are:

• The one's setup for the welfare of the disabled people.
• The ones registered for religious purposes.
• Agricultural buildings and fish farms.

If your business premises are empty soon, you will not be accountable to pay business rates for three months, and after that period, normal rules will apply unless you come in these categories. If yes, you will get extended relief:

• Novice sport clubs.
• Serving charitable purpose.
• Listed buildings.
• Warehouses and specific industrial properties may get another exemption of three months.

If the Government has lowered the unoccupied property rate for the tax year, it will be shown on your bill front. Some properties have ongoing exemptions till their status change:

• Properties where the liable applicant is the deceased person's representative.
• Properties subject to bankruptcy or liquidation.
• Properties that cannot be occupied by the owner because of legal restrictions.

Revaluation support scheme

The support scheme offers small business rates relief to eligible ratepayer's bills if they have increased because of the revaluation 2017. The highest award is £5000.

Retail relief

The relief is given at a rate of 100% till June 2021, and then it will be lowered to 66% from July 2021 to March 2022.

If the rateable value of the properties is more than £51,000, the new policy applies.

Charitable rate relief

If you use your business premises for a charitable cause, you can get relief up to 80% business rates. You may be liable for discretionary reliefs and reductions. Hence, make sure you get with your local council.

Relief for local newspapers

The Government is offering funds to local authorities to offer a discount of up to £1500 annually till 31 March 2023 to office areas that local newspapers occupy.

Cash Grant for Business

The Government declared a £10,000 grant for small businesses and a £25,000 grant for retail properties that enjoy a value of up to £51000.

Budget announcement for business rates

The Chancellor of the Exchequer announced three measures in the budget of 2017, based on the revaluation of properties:

1. Businesses that have lost some or complete small business rate relief will get a rise in their bills up to £600 annually.
2. Pubs will get a £1000 discount on their bills.
3. Local bodies will be given a £300 million fund to support businesses that got a high rise in their rates because of revaluation.

Small business rates relief in a nutshell

The rateable value of small properties under £ 51,000 is eligible for a reduced payable rate. The multiplier of such properties is lower than any with a bigger rateable value. For instance, in 20/21, those properties with a value less than £51,000 have a multiplier of 49.9 pence, and the larger properties have a 51.2 pence multiplier. The higher multiplier is applied to unoccupied properties and those aligned with other relief.

The ratepayers can gain additional small business rate relief if they own one non-domestic property worth less than £15,000. If the rateable value falls between £12000 and £14,999, the relief is calculated on the sliding scale format. If the property has a value of less than £12000, you can get 100% relief.

If there is any change in your property that will impact your privilege to small business rates relief, you should notify within 4 weeks since the change has occurred.

Conclusion

So, exemptions and reliefs are based on the kind of property you own and if the property is in use or not. You can contact the business rates team to find out about your exemption and relief. You can also check the value of your property by adding the postcode to the Valuation Office Agency website. You will get the multiplier here. Multiply the rateable value with the multiplier minus any reductions and get the revalued figure. Once you get the figure, you will know the exemptions and reliefs you are entitled to for business rates.