Business rates are a tax on property used for business purposes, calculated based on the property’s rateable value, which is an estimate of its open market rental value. Reducing your business rates is a fantastic way to make significant savings, with which your business could reinvest in a range of other areas. The government has certain schemes in place to help small businesses prosper, such as government grants and relief on certain taxes and charges. This includes business rates relief, which some businesses certainly qualify for – find out if you qualify. In this article, we’ll explore how to reduce business rates for your business.
Eligibility for Business Rates Relief
Criteria for Eligibility
Your eligibility for business rates relief is determined by several factors, including the property’s rateable value, the type of business, and its location. In order to quality, you’ll have to meet the specific criteria set by your local council.
Types of Businesses Eligible
Different reliefs are available for various types of businesses. Whether you’re a small business, retail establishment, or rurally located, your council will have its own local eligibility criteria that you’ll need to apply for to secure the right relief for you.
Geographic Considerations
Your business’s location will impact its eligibility. Some reliefs are specifically designed for businesses in rural areas or enterprise zones to promote economic development in these regions.
Types of Business Rates Relief
Small Business Rate Relief
If your business property has a rateable value below £15,000, you might qualify for Small Business Rate Relief, a game-changer for small businesses looking to save a little.
Rural Rate Relief
If you’re operating in a rural area, you might be eligible for this. This relief is designed to support businesses in less urbanised areas, ensuring their sustainability and contribution to the rural economy. It is especially beneficial for businesses that are the sole providers of essential services in their village.
Charitable Rate Relief
Charities and community amateur sports clubs can benefit from Charitable Rate Relief. This relief supports organisations that work for the welfare of the community, allowing them to allocate more funds to their charitable activities and enhance their positive impact on society.
Enterprise Zone Relief
Businesses situated in designated enterprise zones can avail of Enterprise Zone Relief. This relief aims to encourage business development and investment in these zones, fostering economic growth and job creation in the area.
How to Apply for Business Rate Relief
Contact your local council
To kickstart the application process, get in touch with your local council. They’ll guide you through eligibility, application procedures, and required documentation, paving the way for you to secure relief.
Application Process
The application process may vary, but generally, you’ll need to submit a detailed application form and the required documentation to the local council. Timely and accurate submission is crucial to avoid delays and ensure the successful processing of the application, allowing businesses to reduce business rates effectively.
Necessary Documentation
Make sure you have the right documentation, like proof of property ownership or lease agreements and financial statements. These documents are your allies in substantiating your application and accelerating the assessment of your eligibility.
Exemptions and Temporary Reductions
Properties Exempt from Business Rates
Certain properties like farms and buildings used for the welfare of disabled people may be exempt from business rates. Understanding these exemptions can help businesses to manage their operational costs effectively and ensure compliance with local regulations.
Circumstances for Temporary Reductions
Temporary reductions in business rates may be available for businesses experiencing local disruptions or changes in operational circumstances. Reporting such changes promptly to the local council is essential to avail of any temporary relief options available.
Reporting Local Disruptions
Actively reporting any disruptions or changes in the local area to the council is crucial. It ensures that businesses are paying the correct amount in business rates and can lead to temporary reductions in cases of significant local disruptions affecting business operations.
Impact of Business Rates Relief on SMEs
Financial Benefits
Securing business rates relief can offer substantial financial benefits to SMEs. It allows for more resources to be allocated to areas like innovation, employee welfare, and business expansion, enhancing the overall financial health of the business.
Enhanced Business Sustainability
By reducing operational costs through business rates relief, SMEs can achieve enhanced sustainability and resilience. It allows businesses to navigate market challenges more effectively and fosters long-term stability and growth.
Contribution to Local Economy
Business rates relief supports SMEs in contributing more robustly to the local economy. It enables job creation, community engagement, and economic development, fostering a more vibrant and resilient local community.
Navigating Business Rates
Recapitulation of Business Rates Relief
Understanding and securing business rates relief is pivotal for SMEs in the UK. It offers financial benefits, enhances business sustainability, and contributes to the local economy, making it an essential aspect of effective business management.
Explore Relief Options
SMEs are encouraged to explore the various relief options available, understand the eligibility criteria, and consult with their local councils to secure the benefits they are entitled to. Proactive exploration and application can lead to substantial savings and enhanced business growth, allowing businesses to understand how to reduce business rates effectively.
Are you an SME? For more insights, advice, and support on managing business asset finances and navigating the complexities of business rates, explore more articles on the Funding Guru blog. We are your partner in achieving business growth and financial success.
Encouraging Consultation with Local Councils
If you believe your business may be eligible for business rates relief, do not hesitate to consult with your local council. Understand your options, initiate the application process, and take a step towards achieving financial efficiency and business success.
FAQs
Q: What is the UK business rates relief for 2023? Are business rates being reduced?
A: I do not have the specific information for the business rates relief for 2023. Please refer to the official government website or consult with your local council for the most accurate and up-to-date information regarding any reductions in business rates for 2023.
Q: How do I remove business rates from my property?
A: Removing business rates entirely is typically not possible as they are a standard tax for business properties. However, you may be eligible for business rates relief, which can reduce the amount you have to pay. Contact your local council to discuss your circumstances and explore the available relief options, such as Small Business Rate Relief or Rural Rate Relief, depending on your eligibility.
Q: Can you reclaim business rates?
A: In certain circumstances, businesses may be able to reclaim overpaid business rates, especially if there have been changes in property valuation or if the property has been incorrectly assessed. It is advisable to contact your local council or business rates professional to discuss your specific situation and explore the possibility of reclaiming overpaid business rates.
Q: Why am I being charged business rates?
A: Business rates are charged to owners of non-domestic properties as they are a form of local taxation. If you occupy a building or part of a building for non-domestic purposes, you are likely liable to pay business rates. The amount is determined by the property’s rateable value, which is an estimate of its open market rental value.
Q: Do business rates go to local councils?
A: Yes, the revenue generated from business rates primarily goes to local councils. A portion of the revenue is also redistributed by the government to councils in areas with lower property values.
Q: How do you avoid paying rates on empty commercial property?
A: Empty properties are usually exempt from business rates for the first three months, and industrial premises may be exempt for six months. After this period, the full business rates are typically payable. However, there may be circumstances where further exemptions or reliefs can be applied for, depending on the nature of the property and the reason it is empty. Consult with your local council to explore available options and reliefs for empty commercial properties.
