Wednesday, December 14, 2011

Lowering business rates - small business rate relief

One of the larger expenditures for any business is the amount of money handed over to the government in the form of rates a figure that, in the Wyre Forest at least, can amount to 40% of the amount that they may pay in actual rent. For a small business this can be a huge overhead. There are ways to lower this amount and the simplest is provided directly from the government in the form of Small Business Rate Relief.

The catch is that the government have no requirement to inform you of it or set it automatically if you qualify - it's something you have to apply for. Dig your way through the Business Link site and you'll hopefully reach the page goes into detail about how SBRR works. The key bits apply to this year Apr-11-Apr12 and part of next year Apr-12-Sep12. Keeping it simple if you are a business occupying a single site you probably qualify for relief.

As an example of the type of savings available consider if a property has a Rateable Value (RV) of £12,000. Without any relief in the Wyre Forest this would be multiplied by the Standard Rating Multiplier of 43.3p and the rates bill would be £5,196. With the SBRR it would be multiplied by the Small Business Multiplier of 42.6p and the rates bill would be £5,112 a saving of £84 per annum; which sounds petty. However if the property has a lower rateable value a sliding scale is introduced.

If the RV is less than £6,000 a relief of 100% is applied - there is no rates bill! Between £6,000 and £11,999 a sliding scale is introduced from 100% to 0%. If the scale is linear (surprisingly there's no information on this) then a RV of £10,000 rather than be the full rates bill of £4,330 would be the small rates bill of £4,260 with perhaps a third off resulting in a rates bill of £2,840.

That's a saving from the full amount of £1,490 per annum! All it takes is filling out one sheet of A4 paper that you can apply for from your local council or possibly even download and fill out.

Better yet although the relief starts from the date of application it can be retrospectively applied  to the last six months meaning you could get money back. In the above case paying the full bill monthly over ten months starting Apr11 and having paid the December amount that could be a rebate of £894. Wouldn't that be a nice present :-)

If you're a business owner find your last rates bill and check which multiplier you're on.