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Business Rates Relief – A Guide
December 20, 2021
A ‘business rates relief’ is any discount applied to your business rates bill which is provided by your local authority including:
Some business rates reliefs and exempted property reliefs will be applied automatically to your business rates demand but many business rates reliefs are not automatic and must be applied for by eligible ratepayers. It is usually advisable to employ the services of a professional rating surveyor to assess your property’s rateable value and establish if a business rates appeal, business rates mitigation, or an application for business rates relief is warranted and could reduce your business rates.
‘Transitional Relief’ is an annual cap on the amount your business rates bill can change each year as the consequence of a business rates revaluation. The last business rates revaluation and the beginning of the current 2017 – 2023 rating list was on 1 April 2017. The next business rates revaluation will take place on 1 April 2023 and will be based on market rental values from 2021 known as the Antecedent Valuation Date (AVD). If your property is in England and eligible because its rateable value either increased or decreased at the last revaluation, transitional relief will be applied to your business rates bill automatically. Transitional relief will mean that any increases or decreases to your business rates payments will be ‘phased in’ gradually.
The amount your business rates bill increases or decreases annually depends on several factors including the property’s rateable value and the amount of transitional relief set by the government. The following table which shows current rates of transitional relief is a useful business rates calculation tool for ratepayers. The amounts shown will change again at the next 2023 business rates revaluation.
If a ‘transitional certificate’ has been applied to your property’s rateable value, perhaps as the result of a business rates appeal or another change to the property assessment, the transitional certificate rateable value amount will be used to calculate your business rates payable instead of the standard rateable value.
Empty Property Relief
You do not have to pay business rates for the first three months if the property that you own or occupy becomes empty. After the initial period of no business rates paid for three months, most ratepayers will need to start paying business rates again unless the property is industrial (exempt for a further three months), a listed building or if the rateable value of the property is less than £2,900. These buildings are exempt from paying business rates until they are reoccupied.
Properties owned and used for charitable purposes or as community sports venues are also not required to pay business rates whilst the property is empty provided that the property’s next intended use is for the same purpose. There are also numerous ‘empty rates mitigation’ strategies that can reduce the empty business rates costs for an occupier or landlord. A professional rating surveyor or empty business rates specialist can advise you if your business rates costs can be reduced.
Small Business Rate Relief
Any property in England and Wales with a rateable value of under £15,000 is eligible for Small Business Rate Relief (SBRR) if the business only occupies and pays business rates for one property or multiple properties with no single rateable value greater than £2,899 and the total rateable value of your properties must be below £20,000 (£28,000 in London).
If you are a small business In England and do not qualify for Small Business Rate Relief but you have a rateable value under £51,000, your business rates will instead be calculated using the Small Business Multiplier. The standard multiplier used to calculate your business rates amount payable is currently 51.2p until 31 March 2022. The Small Business Multiplier is 49.9p.
Rural Rate Relief
In designated rural areas with a population of below 3000 you could receive rural rate relief if you are the only village shop or post office business in the area with a rateable value of £8,500 or below.
If you are the only pub or petrol station in the designated area with a rateable value of up to £12,500 you could also receive rural rate relief and pay no business rates.
Charitable Relief
Registered charities and community amateur sports clubs are eligible for an 80% business rates relief regardless of the size of their rateable value, if the property they occupy is used for charitable purposes. Some charities can also be awarded a 100% business rates discount which is known as ‘discretionary relief’ meaning it is at the discretion of the local council. There are further business rates charitable reliefs available for other types of non-profit and voluntary charitable organisations which are also discretionary. Ratepayers can either apply to the council or contact professional business rates advisors for guidance regarding charitable reliefs and discretionary discounts on their business rates bills.
Enterprise Zone Relief
If you are opening or moving your business to an ‘enterprise zone’ and your property has a rateable value, you may be eligible for business rates relief. Each council provides its own guidance for where the business rates relief enterprise zones are located, how the relief should be applied, and you could receive up to £55,000 a year for five years. Business rate relief applications can be submitted through your business rates agents or to the local council directly.
Hardship Relief
If your business is in England and your property has a rateable value, your local council could reduce your business rates bill with hardship relief. You must satisfy the council that your business would face financial difficulties without the business rates relief and that providing hardship relief to your business is in the interests of the local community. Business rate relief applications can be submitted through your business rates agents or to the local council directly.
Retail Relief
If your business has a rateable value and you are a shop, restaurant, bar, pub, café, cinema, music venue, or hospitality and leisure venue including gyms, spas, hotels, casinos and more, you could qualify for retail discount on your business rates. Retail relief can be applied in addition to any other business rates reliefs and discounts that you may be entitled to.
If your business was legally allowed to be open during the first national UK lockdown which commenced on the 5 January 2021 the amount of business rates relief that you are entitled to between 1 July 2021 and 31 March 2022 will be capped at £105,000 instead of £2 million. Business rates relief applications can be submitted through your business rates agents or to the local council directly.
Local Newspaper Relief
If your property has a rateable value and it is used as an office premises for a local journalist or newspaper you could be entitled to a £1,500 reduction in business rates per annum. Business rate relief applications can be submitted either through your business rates agents or to the local council directly.
Nurseries Relief
If your property has a rateable value and you are a nursery included in Ofsted’s Early Years Register and your premises is wholly or mainly used to provide the Early Years Foundation Stage of education, you could qualify for nurseries discount on your business rates. Nurseries relief can be applied in addition to any other business rates reliefs and discounts that you may be entitled to.
Material Change of Circumstance Relief
If your property has a rateable value, you can get a temporary discount applied to your business rates bill due to severe disruption caused by roadworks, building works, flooding and other external factors.
Material Change of Circumstances relief applications can be submitted through your business rates agents or to the local council directly. Discounts are typically between 5-25% of the property’s rateable value and will be applied to the rateable value for the period of disruption only.
If you would like to check that you are paying the correct amount of business rates and if any additional business rates relief is available for your business, you can contact the CPRA business rates department on 020 7770 8000 or email info@cpragroup.com. CPRA are specialists at reducing business rates costs. Any initial business rates advice provided by us is free and without obligation.