Small
Business Rate Relief (England)
From
1st April 2005 a new scheme was introduced in England
to benefit small businesses. To qualify for the relief,
small businesses must register with their local authority
and must only occupy one property. The property must have
a rateable value of less than 15,000 (21,500 in Greater
London). A business may also qualify as a small business
if they have one main property and other smaller properties
such as a store or car parking space. To qualify, the
rateable values of the smaller assessments must be less
than 2,200 and the total rateable value must be less than
15,000 or 21,500 in Greater London.
To
qualify as a small business on a particular day, the RV
of the property must be below 15,000 (or 21,500) on the
first day of the year and on the day in question and every
day in between. So if the RV is reduced from 25,000 to
5,000 wef 1/11/05, the occupier will not be classed as
a small business until 1/4/06 because of the ‘first
day of the year’ rule. Likewise, if for example,
an RV of 9,000 at 1/4/06 is increased to 18,000 from 1/5/06
and then reduced back to 9,000 wef 1/6/06, the occupier
will lose the ‘small business’ status from
1/5/06 until the new year – 1/4/07
A
business that qualifies for Small Business Rate Relief
(or SBRR) will receive relief on a sliding scale based
on the rateable value of their property. A small business
with an RV of 5,000 will receive 50% relief, a business
with an RV of 6,000 will receive 40% relief, a business
with an RV of 7,000 will receive 30% relief and so on
up to nil relief at RV 10,000.
The
scheme is funded by applying a supplement to the bills
of those ratepayers who don't receive Small Business Rate
Relief. There is a 'buffer zone' for small businesses
with a rateable value between 10,000 and 15,000 whereby
they will not receive relief but will not be required
to pay the supplement.
Charities
and Registered Community Amateur Sports Clubs do not receive
SBRR – they receive 80% relief for being a charity
or Registered Community Amateur Sports Club – and
as such they will pay the supplement.
Occupiers
of ‘Village stores’ and former agricultural
premises do not receive SBRR – they receive 50%
relief for being a ‘village store’ or former
agricultural premises – and as such they will pay
the supplement.
Owners
of empty properties do not receive SBRR as the property
is not occupied by a small business.
The
Value of E
E
is used in the calculation of liability where SBRR applies
If
the RV of the property is 5,000 or less, E is 2
If
the RV is more than 10,000, E is 1
If
the RV is between 5,001 and 10,000, E is the amount derived
from dividing 10,000 by the rateable value of the hereditament,
calculated to three decimal places.
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