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Chartered Accountants | Business Development Specialists | Registered Auditors.
Abbey House, 342 Regents Park Road, Finchley, Barnet, London, N3 2LJ
(Also offices in Milton Keynes, Buckinghamshire)
Growing your business is our business
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).
Scotland and Wales have slightly different small business discount schemes as those regional Governments set their own levels of business rate. Northern Ireland does not have a business rates system, as it still uses the old domestic rates system that has its own hardship scheme.
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:
| Ratable value of building | Relief given |
|---|---|
| Less 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 |
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: | 20% | £2,645 |
| Discount for value less than £5,000: | 50% | |
| Reduced by 1% x (£5,500 - £5000) | 5% | |
| Final discount for small property | 45% x £2,645 | £1,190 |
| Final 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 for claims for these years is now 30 September 2010.
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 months for 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.
The AIA has now been increased from £50,000 to £100,000 in the Finance Act 2010.
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