Online shopping has had a huge impact on high streets across the country. Alongside this, economic uncertainty has created a difficult climate for businesses to operate in.
For those businesses operating from high street premises, there is the small issue of business rates. As of 1st April 2019, some changes have come into effect. These changes have come at a time when changes to the tax system have also introduced new requirements on small businesses to begin
Read on to find out what they are and how they may affect your business, and scroll down for the Brighter Business Guide to Business Rates.
What’s happening with business rates, and how does it affect me?
Some high street shops and pubs will welcome the news of a cut in business rates over the next two years.
Eligibility for the rates reduction depends on the rateable value of your premises. For premises where the rateable value is below £51,000, businesses will receive a one-third discount to their rates bill.
It’s not all good news, however. The news comes against the backdrop of rising council tax and utility bills, as well as increased obligatory costs like auto-enrolment pension contributions and changes to the tax system.
Organisations have criticised the business rates system, with the FSB calling it “unfair” and “regressive”. And despite the discount, revenue from business rates for the 2019-2020 year are expected to increase overall.
When was this decided, and when does it come into effect?
The change to business rates for the years 2019-2021 was announced in the Autumn Budget in October 2018. This change has been in place since 1st April 2019.
Calculating the value of your premises and estimating your business rates
It’s possible to estimate your business rates using this online tool on the gov.uk website.
While this cut to business rates isn’t a cure-all for the issues facing small businesses today, it’s a small step in the right direction when it comes to creating a friendlier environment for SMEs to operate in.
The Brighter Business Guide to Business Rates: Everything you need to know
What are business rates, and who collects them?
Business rates are annual fees levied on certain non-domestic properties or buildings where activities are non-domestic in nature. Effectively, rates are the non-domestic equivalent of council tax.
Shops, offices, pubs, warehouses and guest houses are all considered non-domestic, and so business rates must be paid for these buildings.
Rates are owed to your council, who will send you a bill every February or March with your charge for the following year.
What do business rates cover?
Business rates help to pay for various services provided by local authorities and the government, including cleaning and maintenance of public streets, street lighting, emergency services, and so on.
How much will I have to pay, and how are business rates calculated?
The amount you pay will depend on the rateable value of your property and the multiplier used.
Rateable value is calculated by the Valuation Office Agency, a body which provides property valuation and advice to the government. There are two multiplier values: standard and small business.
Are there any exemptions to business rates?
Certain properties are exempt from business rates. There is a full article available on the gov.uk website. If you work from home, you may not have to pay business rates, though this depends on the nature of the work conducted from the property.
Additionally, some businesses may be eligible for rates relief; check with your local council to see if you’re eligible and whether you need to apply or if it is automatically applied.
Finally, for businesses in Scotland, business rates are calculated differently. So, if you’re reading from the other side of the border, you will need to consult the appropriate source here.
What do I do if I think I’m paying too much?
First up, start by calculating your business rates using the calculator on the gov.uk website.
If you think you’re paying too much, you can check to see if you’re eligible for the various rates reliefs that are available, listed above. If you work in a building where the nature of the business has changed or changes, the amount you pay may change, too.