A survey by the Federation of Small Business (‘FSB’) in 2013 showed that 7% of small businesses were paying out more in business rates than they were in rent. Additionally, a further 6% said the business rates they paid were equivalent to rental payments.
Research has shown that many small businesses don’t know about the reliefs which they may be entitled to claim in respect of business rates. Reliefs can be up to 100% for some businesses, reducing overheads with a view to enabling continuing success and growth.
The Government recently announced extensions to these reliefs as part of it’s commitment to encouraging growth of small business. The FSB have welcomed the extensions with open arms and are confident that many small businesses will receive benefits from the reforms. A further review of the ratings system will also take place in the future, with a view to making the current system much more accessible, and reliefs more readily available.
Will you qualify?
Briefly, if you occupy one business property and the current rateable value of your property is less than £12,000, you will qualify for relief.
Your rateable value is decided by the ratings department of your local authority. If you are unsure of your rateable value, you should contact your local authority as soon as possible to avoid overpayments.
What reliefs can you claim?
If your rateable value is £6,000 or less, you can claim 100% relief – ie. you won’t pay any business rates up to 31 March 2015. This was previously 50% so small business should act soon to ensure they are getting the maximum relief.
For rateable values between £6,001 and £12,000, the relief tapers down from 100% to 0%.
If your rateable value is between £12,001 and £17,999, you won’t qualify for relief but you will still be deemed a ‘small business’ and you will be charged business rates on a separate scale to larger businesses.
How do you claim?
Applying for business rates is simple, and can be done either over the phone with your local authority or via your local authority website.
For businesses in the Wakefield district, more information on small business rate relief can be found here. The page also contains a downloadable form which can be filled in and submitted to claim relief. Businesses will be pleased to note that the form is only one side of A4 and isn’t time-consuming to complete.
Most local authorities will have similar guidance, so the above should help if you’re struggling to work out whether you qualify.
Small businesses should continue to monitor the changes in relation to business rates as any further reforms could mean entitlement to different reliefs. When the new system is introduced (whenever that may be), small businesses should be able to understand their position more clearly, thus being able to focus on running their business with minimal interruption.
If you would like any further information on the above, please get in touch with us via the Contact Us page.