Reduce your business rates

Many businesses pay more business rates than they need to because they don’t realise they could claim a discount through the small business rate relief scheme (SBRR). This scheme has been poorly promoted by the billing authorities, but it is worth applying for relief as you could reduce your rates bill by up to 50%. 

It is the size of the property occupied that determines the discount not the size of the business. Generally business properties in England with rateable values of less than £15,000 (£21,500 in Greater London) qualify for some discount. However, where one business occupies several properties, the SBRR will only apply to one main property and then only if the total rateable value of all the properties occupied is less than £15,000 (with each property having a rateable value of less than £2,200).

 

All business properties pay rates according to their rateable value multiplied by a set multiplier, which is 48.5p for 2009/10. The English SBRR applies a lower multiplier (48.1p for 2009/10) to qualifying properties, plus the following additional reductions:

Rateable value of building Relief givenLess than £5,000 Lower multiplier, then 50% reduction in resulting figure£5,000 – £9,999 Lower multiplier, then 1% reduction from 50% for every £100 of rateable value above £5,000.£10,000 – 14,999 (£21,499 in London) Lower multiplier only

 Example

Your office has a rateable value of £5,500. You are sent a business rates bill of £2,668 (£5,500 x 0.485) for 2009/10. You apply for the SBRR and receive a refund of 1,213, calculated as follows:

Rateable value at lower multiplier rate: £5,500 x 0.481 £2,645Discount for value less than £5,000: 50%Reduced by 1% x (£5,500 – £5000) 5%Final discount for small property 45% x £2,645 £1,190Final business rates for 2009/10 £1,455 

Original rates bill £2,668 

Reduction achieved: £1,213 

You need to apply for the SBRR from the billing authority that collects your business rates, but you only have to complete one form to cover all the years from 2007/08 to 2009/10. A new claim will be required from April 2010. The extended deadline forclaims for these years is now 30 September 2010. 

Vacant properties 

If your business property is vacant you can claim an exemption from business rates, but only for restricted periods, known as permitted void periods. From 1 April 2008, the permitted void period is six months for industrial properties, and three monthsfor other commercial properties. Full business rates are due on all empty properties when the permitted void period comes to an end, subject to any SBRR reductions due. However, for just one year from 1 April 2009 all empty properties with a rateable

value of less than £15,000 are fully exempt from business rates.

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