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Claiming Small Business Rate Relief

Newsletter issue - December 08.

Are you missing out on a reduction in your business rates? The small business rate relief scheme (SBRR) can reduce your business rates by over 50% if your building has a rateable value of less than £5,000. The SBRR provides smaller discounts in business rates for properties with rateable values of up to £15,000, or £21,500 in Greater London.

Business rates are collected by local authorities, but the amount due is set nationally using a standard multiplier for all commercial properties. This multiplier is 46.2p in England for the tax year 2008/09. Scotland and Wales set separate multipliers and have slightly different versions of the SBRR that give different reductions. The Northern Irish Assembly still operates the pre-1990 old rates system for all domestic and business properties.

SBRR applies a lower multiplier (45.8p for 2008/09) to businesses that qualify and gives additional reductions as shown below:

Rateable value of building Relief given
Less than £5,000 Lower multiplier + 50% reduction in resulting figure
£5,000 - £9,999 Lower multiplier + 1% reduction from 50% for every £100 of rateable value above £5,000.
£10,000 - 14,999
(£21,500 in London)
Lower multiplier only

A business using a property with rateable value of £6,000 would pay £2,772 in business rates at the full rate of 46.2p for 2008/09. If it successfully applied to use the SBRR it would pay £6,000 x 45.8p = £2,748 x 60% = £1,648.80. That's a reduction of 41% from the original bill of £2,772.

The catch is you have to apply to use the SBRR from the billing authority that collects your business rates. You can now make one application to cover all the years from 2007/08 to 2009/10, and reclaim any excessive business rates paid for those earlier years. Contact your billing authority for their claim form. Each authority has a different form, but some authorities have not updated their information to show the extended deadline for claims, which is now 30 September 2010 for the current valuation period.

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