Business Rates for SMEs – good news!

The March 2016 Budget delivered good news to SMEs regarding the future small business relief for Business Rates.

What are business rates

Business Rates (also known as National Non-Domestic Rates) are a tax on business properties. The tax is set by the government and business rates collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services. Your local council will send you a business rates bill in February or March each year.

Non-domestic properties include:

• shops
• offices
• pubs
• warehouses
• factories
• holiday rental homes or guest houses

You’ll probably have to pay business rates if you use a building or part of a building for non-domestic purposes.

Exemptions include:

• farm buildings and land (excluding buildings used as offices or for other business activities)
• fish farms
• places of public religious worship, eg registered buildings and church halls (except in Scotland – you apply for relief for these buildings instead of being exempt)
• buildings used for training or welfare of disabled people (except in Scotland – you apply for relief for these buildings instead of being exempt)

What is changing

Our Managing Director Nicky Goringe Larkin was interviewed on BBC Radio Oxfordshire representing the Federation of Small Businesses (FSB) on the topic. Below is the radio piece:

The Small Business Rate Relief (SBRR) is increasing from 50% to 100% and the thresholds are increasing to benefit a larger number of businesses. Businesses with a property with a rateable value of £12,000 and below will receive 100% relief.

Businesses with a property with a rateable value between £12,000 and £15,000 will receive tapered relief. 600,000 small businesses, occupiers of a third of all properties, will pay no business rates at all – a saving worth up to £5,900 in 2017-18. An additional 50,000 will benefit from tapered relief.

Business Rates Facts

• Rateable value for 100% increasing to £12,000
• Taper relief for rateable value from £12,000 to £15,000
• To be introduced from April 2017

Who qualifies for Small Business Rate Relief

Some properties are eligible for discounts from the local council on their business rates. This is called ‘business rates relief’. You have to apply for some types of relief:

• small business rate relief
• rural rate relief
• charitable rate relief
• enterprise zone relief

Exempted buildings and empty buildings relief is automatically applied by your local council.

Some local councils give extra discounts. For example, you may be able to get hardship relief or transitional rate relief if your business meets certain criteria. Contact your local council if you’re not getting a relief you think you’re entitled to.

Small Business Relief

• You only use one property
• Your property’s rateable value is less than £12,000
• If you have more than one property you can get SBRR if the rateable value of each of your other properties is less than £2,600.
• You still have SBRR for one year when you get a second property.

Further Reading

Gov site for Business rates: https://www.gov.uk/introduction-to-business-rates/overview