How much do you know about Small Business Rate Relief? And, if you’re familiar, will you be one of the nearly one million small businesses who’ll be paying less next year for their business property?
A big change is coming in the area of business rates, and it could save you thousands of pounds…
What are business rates?
Business rates are a tax on non-residential properties – meaning any business that owns any amount of sites has to pay tax to operate their business there.
You qualify for a discount. Currently, some small businesses qualify for money off the tax known as ‘Small Business Rate Relief’ (SBRR).
Up until April 2017, any business that only uses one property that has a rateable value of less than £12,000 qualifies for SBRR.
How is the business rate worked out?
The business rate charged will depend on your building’s ‘rateable value’, as judged by its open market rental value on 1 April 2008 (revaluations happen every few years, with the next revaluation expected to happen in 2017).
How much relief could I get?
This again depends on your rateable value. Anyone with a property that has a rateable value of less than £6,000 gets 100% tax relief, so don’t have to pay any extra. The threshold goes up to £12,000 (until April 2017), and how much relief will depend on the rateable value – the lower the rateable value of your property, the more Small Business Rate Relief you’ll benefit from.
This is all changing.
In April 2017, the system is updating – in favour of small businesses.
Chancellor of the Exchequer George Osbourne announced in his budget statement that the threshold of the building’s rateable value is rising, as well as the discount available to those who qualify.
When the changes are implemented, the base threshold to receive complete relief of £6,000 will be raised to £15,000. An estimated 600,000 small businesses will be affected by this change – meaning that 600,000 small businesses will soon have to pay absolutely nothing in business rates.
On top of this, an additional 250,000 small businesses will see themselves receiving a larger SBRR discount and paying a lower business rate. Some estimates are saying that this will be saving many businesses as much as £6,000 per year.
To find out more and work out exactly what your small business should be paying, be sure to visit the Small Business Rate Relief page on the government’s website by clicking here.