Introduced in 2005, the small business rate relief scheme was implemented in order to tackle the burden of business rates on smaller enterprises. Small businesses can currently benefit from a temporary doubling of the level of this relief and, following George Osbourne’s announcement in November 2015, the government has now extended this until March 2017.
The relief is based on the rateable value of your business property in the relevant valuation period. In order to be eligible for the relief, your business must only use one property in England and have a rateable value of less than £12,000. You will get 100% relief (doubled from the usual rate of 50%) for properties with a rateable value of £6,000 or less and this will gradually decrease from 100% to 0% for properties valued between £6,001 and £12,000.
If your property has a rateable value below £18,000 (£25,500 in Greater London) then even if you do not qualify for the sliding relief mentioned above, your business rates will be calculated using the small business multiplier as opposed to the standard one.
If you have more than one business property, the reduction may still be open to you if the rateable value of each of your other properties is less than £2,600. The rateable values of all the properties are then added to together and, if this total is less than £18,000, the relief can be applied to the main property.
Rate payers will continue to receive the small business rate relief for the following 12 months where they occupy additional property which would usually disqualify them from the relief.
If you would like to find out more please contact one of our business lawyers.