Business Rates - Reductions & Reliefs

There are a number of different reductions available...

Small Business Rate Reliefs

 A Small Business Rate Relief Scheme was introduced in April 2005. The scheme provides a maximum of 50% mandatory rate relief for properties with a rateable value up to £5,000, with relief declining on a sliding scale until – at a rateable value of £10,000 – there is no entitlement.

Relief will only be available to businesses occupying one property in England, with a rateable value less than £10,000, or businesses with one main property and other additional properties in England, providing the additional properties have individual rateable values below £2,200 and the combined rateable value of all the properties is below £15,000. In such cases, relief will only be applied on your main property (i.e. the property with the highest rateable value).

Transitional relief

After each revaluation there is a period of transition. No bill is allowed to increase or decrease by more than a set percentage. Any property with a large increase or decrease in its rateable value will therefore come under the transitional relief scheme, which has the effect of phasing the valuation in over a period of time. If transitional relief applies to your rates bill, it will be applied automatically.

Empty properties

If a property is empty and unused, no business rates are normally payable for the first three months. Some types of business property are exempt from empty property rates. An exemption will automatically be applied to your bill, if appropriate, when you advise the council that the property has become empty.

** Please note that from April 1st 2008 the legislation relating to the rating of empty properties has changed.**

On 11th May 2007 Local Government Minister Phil Woolas published details in respect of new legislation aimed at encouraging empty shops, offices, factories and warehouse buildings back into commercial use.

Previously, most empty properties received 100% relief for the first three months they were empty followed by 50% relief thereafter until occupied. There were also certain types of property (Factories, Workshops, Warehouses)  that benefited from 100% relief for the entire period they were empty.

Following the Minister’s announcement, the effect of the changes from April 1st 2008 are as follows:

• For the majority of commercial properties (offices and shops for example) there is still be a maximum of three months exemption from the payment of rates from the date the property becomes empty. However if after that period ends, the property remains empty, full rates will become payable thereafter.
• Properties that have historically benefited from the full exemption from the payment of rates (Factories,Warehouses,Workshops) while they are empty will now only receive a maximum of up to 6 months exemption from the payment of rates. If after that period the property remains empty, full rates will become payable.
• If your property was previously empty and remained so on April 1st 2008 you would have been issued a rate demand for 2008/2009 with no empty property rate relief and, as a consequence, the full rate liability for the property is now be payable by you.
• There are full and unlimited exemptions applicable to unoccupied charitable properties, listed buildings, properties where the ratepayer is a company in administration, small properties with rateable values of less than £2,200 and community amateur sports clubs.

Charity relief

Charities are entitled to an 80% reduction in their bills. The Council has the discretion to reduce the bill further. In addition, the council has the discretion to grant relief to some other types of non-profit making bodies. Application forms can be requested on-line.

Rural rate relief

This relief was previously available for businesses with rateable values of up to £7,000 where the business was set up on previously agricultural land or buildings. It expired in August 2006. Ratepayers should now consider applying for Small Business Rates Relief.

Hardship relief

This discretionary relief can be granted by the council if you are experiencing hardship and your business is considered to be important to the local community.

Contact the Business Rates Team on 0208 207 7409 for an application form. Alternatively, visit the official government website My Business Rates  for more information.