Small business rate relief (SBR)
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What is SBR?
SBR is a relief which was introduced by Government with effect from 1st April 2005. From 1st April 2017 the thresholds for the relief increase as follows:
Who is SBR is available to?
- One property with a rateable value less than 50,999 rateable value or
- One main property and other additional properties, as long as the other properties have rateable values of less than 2,899. The total value of all properties must be under 19,999 rateable value.
What are the conditions for the second property?
With effect from 14th February 2014 Central Government introduced new regulations in respect of the Small Business Rate Relief scheme.
This scheme has been updated from 1st April 2017 as follows:
A ratepayer can now occupy a further property, which would previously have meant they were no longer entitled to any relief. They must have started to occupy the other property after they occupied the initial property, they must only have occupied the second property for a period of less than 12 months and they must not be in receipt of Small Business Rate Relief for the second property. If a ratepayer meets these criteria they can retain the original relief on their initial property for a period of 12 months from when they first occupy their second property.
How is the rate relief worked out?
Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to other mandatory relief or are liable for unoccupied property rates) will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.
In addition, generally, if the sole or main property is shown on the rating list with a rateable value which does not exceed £15,000, the ratepayer will receive a percentage reduction in their rates bill for this property of up to a maximum of 100%. For a property with a rateable value of not more than £12,000, the ratepayer will receive a 100% reduction in their rates bill.
Generally, this percentage reduction (relief) is only available to ratepayers who occupy either-
(a) one property, or
(b) one main property and other additional properties providing those additional properties each have a rateable value which does not exceed £2,899.
The rateable value of the property mentioned in (a), or the aggregate rateable value of all the properties mentioned in (b), must not exceed £19,999 outside London or £27,999 in London on each day for which relief is being sought. If the rateable value, or aggregate rateable value, increases above those levels, relief will cease from the day of the increase.
The Government has introduced additional support to small businesses. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, the Government has confirmed that they will be allowed to keep that relief for a period of 12 months.
Where a ratepayer meets the eligibility criteria and has not received the relief they should contact their local authority. Provided the ratepayer continues to satisfy the conditions for relief which apply at the relevant time as regards the property and the ratepayer, they will automatically continue to receive relief in each new valuation period.
Certain changes in circumstances will need to be notified to the local authority by a ratepayer who is in receipt of relief (other changes will be picked up by the local authority). The changes which should be notified are—
(a) the ratepayer taking up occupation of an additional property, 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.
What happens if there is a change in rateable value?
If there is a change in rateable value resulting in a property becoming eligible for small business rate relief then application for the relief may be accepted up to 6 months after the date of notification of the alteration.
The Small Business Rate Relief scheme is funded by a supplement on the rate bill of those businesses not eligible for the relief. This supplement is built in to the standard multiplier.
For further advice please contact the Business Rates team.
You must notify the council of any change in circumstances which may affect your claim for small business rate relief within 4 weeks starting on the day after the change occurred.
Changes to inform us:
- Increases in the rateable value of a property occupied by the ratepayer which is not in the area of the billing authority granting SBRR. These changes must be notified in writing.
- The ratepayer coming into occupation of any property which is not mentioned in their application for relief - these changes will have to be notified through a fresh application for SBRR.
As notifying the billing authority of these changes, within 4 weeks starting on the day of the change, will be a condition of entitlement, failure to notify the authority will mean that the ratepayer would no longer be entitled to the relief. If the ratepayer notifies the authority after the 4 week period, the ratepayer will lose relief from the day after the date of change until the day on which the authority is notified in accordance with the amended 2004 Order.
If the change of circumstances is such that the ratepayer will no longer be eligible for the relief, e.g. because the ratepayer occupies a new hereditament with a rateable value above £2,899 from 1 April 2017, relief would end from the date of change.