Small Business Rate Relief

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Small Business Rate Relief (SBRR) was introduced by the Government in April 2005 to help small firms that occupy non-domestic premises.

To qualify for rate relief, your firm must either

  • Occupy only one property with a rateable value of no more than £10,000,
    or
  • Occupy one main property with a rateable value of no more than £10,000 and own additional properties with individual rateable values of no more than £2,200 each and a combined rateable value of £15,000 (£21,500 in London).

You must ensure that your business applies for the relief no fewer than six months before the end of the financial year to which the relief applies. Your local authority will not remind you to do this.

Properties with a rateable value up to £5,000 receive relief of 50%. This relief decreases on a sliding scale of an estimated 1% for every £100 of rateable value between £5,000 and £10,000. Your local billing authority will calculate the exact amount.

The relief is funded by an increase in the rates paid by properties with a rateable value of £15,000 and over (£21,500 and above in London). In April 2005, they began to pay an extra 0.7p per pound of rateable value.

There are exceptions to the above rules.

  • Property that is empty or unused pays no business rates for the first three months that it is vacant. After that, the property is charged 50% of the normal rateable value. Listed buildings, properties on industrial estates and small businesses with a rateable value of less than £2,200 pay no rates even after the first three months.
  • Non-profit making organisations may receive relief at a local authority’s discretion. A property must be used by an overtly philanthropic or charitable organisation. Decisions are made by the local authority on a case-by-case basis. Registered charities automatically receive 80% reduction on the business rates bills and may receive further relief.
  • Villages with a population below 3,000 can enjoy at least 50% relief on some properties: the general store or post office if it is the only one of its kind and has a rateable value of less than £7,000, a food shop with a rateable value of less than £7,000, the only village pub or petrol station if it has a rateable value of less than £10,500. More relief may be available at the local authority’s discretion.
  • Non-agricultural businesses on agricultural land or in former agricultural buildings with rateable values of less than £7,000 can receive at least 50% relief, whether they are run by the farmer or not.
  • If part of your property is not being used and is completely unoccupied for a short time, your local authority might consider giving you relief on your business rates.
  • If you are suffering hardship and cannot pay your business rates bill, your local authority may offer you 100% relief - but your case must be an extreme one and your business must be important to the local community.
 

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