Small business rate relief
Rateable Values
From April 2005, small businesses with a rateable value of up to £15,000 may apply for small business rate relief. Those with a rateable value of up to £10,000 may qualify for a reduction from their full rate bill. The cost of this relief is paid for by all other ratepayers. Small businesses which qualify, with a rateable value of less than £15,000, will have a lower multiplier used to work out their rate bill.
Multipliers
There will now be two multipliers and every property will be charged using the higher multiplier unless small business relief is applied for and granted. If a business is eligible, the ratepayer must apply to their local authority to get the small business relief or to have the lower multiplier used instead.
The small business multiplier will be 0.4p lower and will be used to calculate the charge for qualifying properties up to a rateable value (RV) of £14,999. Below the RV of £10,000, a further percentage of relief will be granted to qualifying small businesses. Up to a RV of £4,999, the additional relief will be 50 per cent, and it will taper down to zero for businesses with a RV of £9,999.
Applications
In addition, if the single or main property is shown on the rating list with a rateable value up to £10,000, the ratepayer will receive a percentage reduction in their rates bill for this property of up to a maximum of 50% for a property with a rateable value of not more than £5,000.
If an application for relief is granted, provided the ratepayer's circumstances do not change, the application will not need to be renewed until the next revaluation of the non-domestic rate premises, which happpens every five years. Certain changes in circumstances will need to be notified to the local authority by the ratepayer (other changes will be picked up by the local authority). The changes which must be notified are -
(a) the ratepayer taking up occupation of a property they did not occupy at the time of making their application for relief; and
(b) an increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the local authority which granted the relief.
Notification of these changes must be given to the local authority within 4 weeks of the day after the change happened. If this happens, there will be no interruption to the ratepayer's entitlement to the relief. However, failure to notify the authority within this timeframe will mean the ratepayer ceases to be entitled to the relief with effect from the day that the change happened. If they are still eligable, the ratepayer will be entitled to the relief again with effect from the day that they notified the local authority. A notification that the ratepayer has taken up occupation of an additional property must be by way of a fresh application for relief; notice of an increase in rateable value must be given in writing.
The relief only applies to occupied properties and does not apply where the ratepayer would be entitled to mandatory rural rate relief or mandatory charity relief (including community amateur sports clubs). Although mandatory rural relief is 50 per cent of the charge using the higher multiplier and below RV £5,000 small business relief is 50 per cent of the charge using the lower multiplier, village shops cannot choose to receive small business relief in place of rural relief.
Single Property
The relief only applies where the ratepayer occupies a single property in England although a second property with an RV of less than £2,200 can be ignored. Empty properties and all second properties in Scotland or Wales are also ignored. Relief will only be given if the sum of the RV’s is below the threshold, although the relief will be given based on the larger property’s RV on the day. No relief will apply to the ignored second property because the larger property disqualifies it from relief.
