Small Businesses Rate Relief

Businesses may qualify for Small Business Rate Relief if they:

  • occupy only one property in England and have a rateable value of less than £15,000
  • occupy one main property and other additional properties, providing the additional properties do not have individual rateable values of more than £2,899 and the combined rateable value of all the properties is under £20,000
  • qualify for small business rate relief when they occupy more than one property, can only be granted relief on the main property

The amount of relief available is on a sliding scale.

From 1 April 2017, Small Business Rate Relief doubled and the thresholds increased to benefit a greater number of businesses.

Properties with a rateable value of up to £12,000 will receive 100 per cent relief.

Properties with a rateable value between £12,000 and £15,000 will receive tapered relief and relief will gradually reduce from 100 per cent at £12,000 to 0 per cent at £15,000.
 

Charitable and discretionary relief

Properties occupied by a charity or trustees for a charity where the property is used wholly or mainly for charitable purposes qualify for mandatory rating relief (80 per cent of the total amount due).

Applications for discretionary rate relief in respect of such properties relate to the 20 per cent of the remaining rates.

Legal requirements

We consider each application on its own merits, but one of the following must apply:

  • The ratepayer is a charity or trustee for a charity and the buildings, premises or land is wholly or mainly used for charitable purposes.
  • The buildings, premises or land is occupied for the purposes of one or more institutions or organisations not established or conducted for profit and whose main objectives are charitable or otherwise philanthropic, religious or concerned with education, social welfare, science, literature or the fine arts.
  • The buildings, premises or land is wholly or mainly used for the purposes of recreation and all - or part - is occupied for the purpose of a club, society or other organisation not established or conducted for profit.

Discretionary criteria

In addition to the legal requirements, we consider each application on the basis of the following criteria:

  • The extent to which the organisation's objectives are in accordance with the council's purpose, aims and values.
  • The extent to which membership is available to the public, the extent to which membership is drawn from specific groups of people, and the extent to which facilities, services, education or training is provided for specific groups of people.
  • The contribution the organisation makes to the local community, with regards to: involving individuals and groups in community life; developing self-help groups; improving community safety; providing advice and information services; enabling and encouraging participation in sport and recreational activities; supporting people with housing related needs; contributing to healthier community; improving access; promoting equality and social inclusion.
  • The extent to which the facilities and services provided by the organisation complement or replace services provided by the council or other organisations.

Financial information

Applications for discretionary rate relief should include:

  • accounts for the last financial year together with a statement on the current financial position and any important
  • items likely to affect that position
  • the level of subscriptions and the date of the last increase
  • the extent to which the organisation relies on its own fundraising efforts
  • the pricing of the organisation's facilities and services
  • the amount of grant and other aid made available to the organisation by the council or other fundraising bodies.

Transitional rate relief

Property values can change a great deal between each revaluation so transitional arrangements help to phase in the effects of these changes on ratepayers' bills.

To help pay for the limits on increases in bills after a revaluation, there also have to be limits on reductions in bills.

Under the transitional relief scheme, limits can continue to apply to yearly increases and decreases for all five years between revaluations, or until the notional chargeable amount is due (rateable value times the multiplier).

In the case of increases (known as 'losers'), transitional limits apply if, in any financial year, the amount you would have to pay (based on your rateable value times the multiplier) is higher than the previous year's bill (based on the amount due on 31 March) by more than the amounts shown below.

If this is the case, your bill will be decreased by these amounts.

Year 'Small' property (rateable value of £20,000 or less) 'Medium' property (rateable value of £20,001 to £99,999) 'Large' property (rateable value of £100,000 or above)
2017/18 5% 12.5% 42%
2018/19 7.5% 17.5% 32%
2019/20 10% 20% 49%
2020/21 15% 25% 16%
2021/22 15% 25% 6%
Remember, after these limits have been applied to your bill, the amount you pay will still increase in line with the rate of inflation.
 
As a temporary measure, the Government have extended transitional arrangements for Small (15%) and Medium (25%) 'loser' properties for 2022/23 only. No transitional adjustment will be awarded in respect of Large 'loser' properties.

In the case of decreases (known as 'gainers'), transitional limits apply if, in any financial year, the amount you would have to pay (based on your rateable value times the multiplier) is lower than the previous year's bill (based on the amount due on 31 March) by more than the amounts shown in this table.

If this is the case, your bill will be increased by these amounts. 
 
Year 'Small' property (rateable value of £20,000 or less) 'Medium' property (rateable value of £20,001 to £99,999) 'Large' property (rateable valuable of £100,000)
2017/18 20% 10% 4.1%
2018/19 30% 15% 4.6%
2019/20 35% 20% 5.9%
2020/21 55% 25% 5.8%
2021/22 55% 25% 4.8%

There will be no transitional adjustments for the financial year 2022/23 in respect of 'gainers'.

Remember, after these limits have been applied to your bill, the amount you pay will still increase in line with the rate of inflation.

 

Relief for empty properties

Business rates do not apply for the first three months that a property is empty. For certain industrial properties, this period is extended to six months.

After this period, rates must be paid in full unless the unoccupied property rate has been reduced by order of the government.

In most cases, the unoccupied property rate is zero for properties owned by charities and community amateur sports clubs.

If the empty property rate for the financial year has been reduced by order, it will be shown on the front of your bill.

Partly empty properties

A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied.

Where a property is partly occupied for a short time, we have the discretion to award relief in respect of the unoccupied part.

Rural rate relief

Shops and post offices in a rural settlement with a population of no more than 3000, where the shop or post office is the only such property in the settlement and has a rateable value of less than £7000, qualify for mandatory rating relief (50 per cent of the total amount due). Pubs and petrol filling stations with a rateable value of less than £10,500 in these rural settlements also qualify.

Applications for discretionary rate relief in respect of such properties relate to the 50 per cent of the remaining rates.

Legal requirements

We consider each application on its own merits, but the following must apply:

  • the property must have a rateable value not exceeding £7000, or £10,500 if a pub or filling station.
  • the property must be in a rural settlement with a population of no more than 3,000
For those properties not eligible for mandatory relief, we cannot award discretionary relief unless:
  • the hereditament (the building, premises or land) is used for purposes which benefit the community
  • it is reasonable to award relief in the interests of persons liable to pay council tax.

Discretionary criteria

In addition to the legal requirements, we consider each application on the basis of the following criteria:

  1. The service provided by the business and its importance to the local community, together with the impact on the local community should the business cease to trade.
  2. The extent of the customer base and the base's location.
  3. The number of competing businesses within the rural settlement.
  4. The extent to which the business employs local people.

Financial information

Applications for discretionary rate relief should include:

  • accounts for the previous three financial years, together with a statement on the current financial position
  • any other relevant financial information
  • any other evidence to support the application.

Hardship relief

Relief is available to occupiers of business premises who are suffering hardship. Hardship is not defined, but is not confined to financial hardship.

If you think you may qualify for hardship relief please contact us.