A guide to small business rates relief

One of the most significant forms of financial relief for small businesses in the UK is small business rates relief (SBRR), a valuable lifeline for many small enterprises, offering significant financial savings that can be reinvested into the business. By understanding the eligibility criteria, application process, and additional reliefs available, you can maximise your savings and help your business grow.

Continue reading our guide below for an overview of what small business rates relief is, who is eligible, and how to apply for it.

What is small business rates relief?

Small business rates relief is a government initiative designed to help reduce the financial burden of business rates on small businesses. These business rates are a form of taxation which are levied on non-domestic properties, similar to council tax for residential properties. SBRR aims to support small businesses by reducing the amount they need to pay, and thereby freeing up financial resources which can be reinvested into the business. The amount of relief you are able to claim depends on the rateable value of your property.

How to know if you are eligible for small business rates relief

To qualify for small business rates relief, your business must meet certain criteria:

• Property value: The rateable value of your property must be below a specified thresh-old. Properties with a rateable value of £12,001 to £15,000 are eligible for up to 100% relief, while those with a rateable value between £15,001 and £51,000 can receive re-duced levels of relief.
• Number of properties: If your business occupies more than one property, you may still be eligible for SBRR. This would be possible if the rateable value of each property falls below £2,899 and the combined rateable value does not exceed £20,000 (£28,000 in London).
• Primary use: The property must be used for business purposes, as residential proper-ties and those used for non-business activities do not qualify.

For properties based in Northern Ireland and Scotland, business rates may be calculated dif-ferently. Visit here for more assistance with Northern Ireland’s rates relief, or gov.scot for Scot-land’s rates relief information.

How to apply for small business rates relief

To help you apply for SBRR, we have noted the straightforward steps to follow below:

1. Check your rateable value

The rateable value of your property is determined by the Valuation Office Agency (VOA). You can check the rateable value of your property on the VOA website or through your local council’s website.

2. Contact your local council

Once you have confirmed that your property’s rateable value falls within the eligible range, contact your local council to apply for SBRR. Most councils have an online application form, but you can also apply by post or in person.

3. Provide necessary documentation

You may be required to provide supporting documents, such as proof of ownership or tenancy, and details of your business operations. Ensure that all information is accurate and up to date to avoid delays in processing your application.

4. Await confirmation

After submitting your application, your local council will review it and notify you of the outcome. If approved, the relief will be applied to your business rates bill, reducing the amount you need to pay.

After you have applied

You must keep your local council updated of any changes to make sure you continue to pay the correct amount. For example, if: your property becomes empty, you get another property, you make changes which increases the value of your property, or the nature of your business changes or moves.

If you believe your rateable value is incorrect, you have the right to appeal – however, this can be a complex process, so we’d recommend seeking professional advice.

Alternative reliefs and exemptions

There are other tax relief initiatives available for small businesses, if you find you are not eligible for SBRR. For example:

• Enterprise zone relief: If your business is located in an Enterprise Zone, you could qualify for up to £55,000 per year over a period of 5 years.
• Rural rate relief: Available to businesses in rural areas with a population below 3,000. Eligible properties include the only village general store or food shop, with a rateable value up to £8,500.
• Charitable rate relief: Charities and non-profit organisations can apply for up to 80% relief on their business rates. Local councils may grant additional relief at their discre-tion.
• Freeports rate relief: if your business is in a freeport area where it is given a range of benefits to support the local economy, you can get relief for up to 5 years. The local council decides what discount is applied, typically based on the rateable value of the property.
• Hardship relief: In cases of financial difficulty, businesses can apply for hardship re-lief. This is granted at the discretion of the local council and requires evidence of se-vere financial hardship.

For more help & guidance with your small business, visit our hub here, or read our article for more information surrounding tax relief for small businesses and the self-employed.

This article provides guidance for information purposes only. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. All content was correct and up-to-date at the time of writing in October 2024.