As the owner of a commercial property, you will be required to pay business rates. If you aren’t already aware, business rates are charged on most non-domestic properties, including shops, offices, pubs, warehouses, and factories. Essentially a council tax for companies, the size of the tax will depend on the rateable value of the property that the business resides in. Typically, the higher the rent, the higher the annual business rate fee.
Case-dependent, you may be able to get business rates relief from your local council in order to lower your total payment. As the owner, on occasion, this discount can happen automatically, but you are more likely going to have to apply for this relief, for which you may need legal help.
Please see below for a complete breakdown of the types of relief you may qualify for:
Small Business Rates Relief
You can qualify for relief if your property’s rateable value is lower than £15,000 or if your business only uses one property. You will not, however, need to pay any form of business rates on a property if you have a rateable value of £12,000 or lower. For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.
Rural Rate Relief
You may qualify for rural rate relief if your company is located in a rural area that has a population of 3,000 or fewer people. You also won’t need to pay any rates if, depending on where you are positioned, the only shop or post office has a rateable value of up to £8,500 or if the only pub or petrol station has a rateable value of up to £12,500.
Charitable Rate Relief
Community amateur sports clubs, as well as charities, can both apply for a rate relief of up to 80% if a property is used for charitable good.
Enterprise Zone Relief
If you’re a start-up or an owner that is relocating to an enterprise zone, you may qualify for relief. The local council works out how the relief is applied, which could mean you get up to £55,000 a year over 5 years.
Hardship Relief
Councils have the ability to reduce your rates with hardship relief. This is when it is deemed by your council that giving hardship benefits the local community or that you’d struggle with financial difficulties without it.
Exempted Buildings Relief
Property-dependent, you may be exempt from business rates. This may apply to the following:
- Agricultural land and buildings, including fish farms.
- Buildings used for training or welfare of disabled people.
- Buildings registered for public religious worship or church halls.
You will need to check this, however, as there are strict legal requirements in order to qualify for these exemptions.
Empty Property Relief
You will not have to pay rates on empty buildings for a total of 3 months.
Some properties can get extended empty property relief.
- Industrial premises (e.g., warehouses) are exempt for a further 3 months.
- Listed buildings (until reoccupied).
- Buildings with a rateable value under £2,900 (until reoccupied).
- Properties owned by charities (if the property’s next use is again charitable).
- Community amateur sports club’s buildings (only if sports club continues).
Transitional Relief
Transitional relief will limit how much your bill can change each year, depending on a revaluation. This will mean that your rates bill will be phased in gradually. You will qualify for transitional relief if your property is in England and your rates rise and fall by more than a certain amount, which your council will adjust accordingly.
Local Disruption Relief
You may qualify for temporary relief for your business if your property is affected by local disruptions such as roadworks, flooding, or building work.
Relief can be a confusing process, especially if you’re not sure if you fully qualify or not. If you’re unsure at any point over whether you can get business rates relief, please contact our specialists here at Roger Hannah & Co., as they will be able to provide you with expert advice tailored to your situation.