Are you missing out on a reduction in your business rates?

Official figures recently released show that many small businesses are missing out on the major tax break introduced to help qualifying small businesses through tough economic times. Even though this is a sizable benefit for small businesses many business owners are not aware of it and fail to claim. Recent figures show that in excess of £400m in rate relief remains unclaimed each year.

The small business rate relief (SBRR) scheme

From the 1st April 2005, the SBRR scheme was introduced by the Government to help small businesses. Small businesses, from the 1st April 2010, are regarded as ones which have a rateable value of less than £18,000 (this was previously £15,000 from the period from 1 April 2005 to 31 March 2010). The relief granted varies depending on the full value of the property. Normally, if the rateable value is below £6,000, the relief allowed is 50%, and then declines on a sliding scale to 0% on properties that have a rateable value of £6,000 to £11,999.

The Government has also temporarily doubled the level of relief available so that between 1 October 2010 and 31 March 2013, eligible ratepayers will receive small business rate relief at 100 per cent on properties up to £6,000 (rather than 50 per cent), and a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value for that period. This relief has to be claimed and is not given automatically.

Further legislation has been passed that allows all businesses who occupy premises that have a rateable value below £18,000 to have their 2012 bills calculated using a lower rate irrespective of how many premises they occupy. Rate payers do not have to apply for this and their new bills will automatically effect this calculation.

From 1 April 2012, any new business wishing to be considered for SBRR need to complete a declaration form to confirm they qualify. This also applies to businesses that began before that date.

To quality for SBRR you must meet the following criteria:-

The property must have a rateable value below £17,999
The property must be occupied
The property is the only one with property rates payable or any other property owned will have a rateable value of less than £2,600.
All occupied properties have combined rateable values of up to £17,999.
Rate payers must notify the council to changes in circumstances that affect their entitlement.
The additional small business rate relief must be claimed from the local council directly.

Fewer than 50% of eligible businesses have reportedly applied for the relief in England due to lack of awareness and fears about red tape. If you haven't, there could be savings to be made. If SBRR is not claimed the money goes straight to the Chancellor!

If you want any further help or advice making a claim for SBRR, please get in touch with us on 01392 258553 or 01395 279521.