How do I make payments?
If you’re currently occupying a commercial property, you will most likely receive a rate demand from your local authority in February or March each year. This will be for the following tax year.
You will be given the option to pay your business rates over 10 monthly instalments. The occupier of the property is liable to pay business rates. If you’re a tenant, make sure to check with the landlord to see if business rates have been included as part of your rental agreement.
Empty and partly occupied properties
You will not be liable to pay for business rates for the first 3 months if the property is empty. For industrial properties and warehouses, you will not have to pay for the first 6 months. Once this period lapses, properties that are empty will now be liable for business rates at the full 100%. The amount will differ if the property in question is a listed building, or the rateable value is below £2,600.
If the commercial property is only partly occupied, the local authority will make a decision on whether to apply a business rate relief.
What is small business rate relief?
If you meet the eligible criteria, you can apply for business rates relief. If the commercial property is occupied by a charity, you are entitled to 80% mandatory business rate relief. If you’re a non-profit organisation, you may be eligible for up to 100% discretionary business rate relief. You will need to apply for this through your local authority, they will decide on this.
Other exemptions
Some types of properties are exempt from paying business rates. These include the following:
- Farm buildings
- Buildings used for disabled people
- Buildings used for welfare
What is small business rate relief?
If your business occupies a ‘small’ property, you may be eligible for small business rates relief.
Small business rate relief was introduced in 2010, the scheme provides a reduction on your business rates if you meet the eligible criteria.
if the rateable value of your commercial property is below £15,000, you’ll be eligible for small business rate relief.
With the 2017 revaluation taking place, for properties that now no longer meet the qualifying criteria for business rates relief, there are new caps on the amount you can expect to pay for a certain period. If applicable, until 31 March 2018, your rates will not increase by more than £50 per month.
If the property’s rateable value is £12,000 or less, you won’t have to pay business rates. For properties that have a rateable value of £12,001 to £15,000, the rate of relief will gradually decrease from 100% to 0%.
What is rural rate relief?
If your business is in a rural area with a population of less than 3,000 people, you may be eligible for rural rate relief. If your business does meet the criteria, you won’t have to pay business rates if:
- The only post office or village shop has a rateable value of up to £8,500
- The only petrol station or public house has a rateable value of up to £12,500
Contact your local authority to see if you meet the qualifying criteria before applying for rural rate relief.
What is charitable rate relief?
If you run a charity or community amateur sports club, you can apply for charitable rate relief of up to 80% if the non-domestic property is used for a charitable cause.
You can check if you’re eligible by contacting your local authority, they may even be able to provide you with a discount of up to 100%, this is known as ‘discretionary relief’.
However, if you find out you’re not eligible for charitable rate relief, there’s a chance that you may still be eligible for discretionary relief if you’re a not for profit or voluntary organisation.
Enterprise zones
If you plan to start a new business or you’re relocating to an enterprise zone, you may be eligible for business rates relief.
You could potentially receive up to £55,000 a year over 5 years, your local authority will be able to calculate how this relief would be applied to your business.
Exempted buildings relief
There are some properties that are exempt from business rates altogether. These include the following:
- Agricultural land and buildings, these include fish farms
- Buildings that are used for training or the welfare of disabled people
- Buildings that are registered for public religious worship e.g. churches and mosques
Remember that strict legal requirements will apply for any of the above exemptions.
Empty property relief
You won’t have to pay business rates for buildings that have been empty for up to 3 months. Once the 3 months lapse, most businesses will be expected to pay full business rates.
Here are some examples of properties that could receive ‘extended empty property relief’:
- Industrial premises – warehouses are exempt for an additional 3 months
- Listed buildings – until they are occupied again
- Buildings that have a rateable value below £2,900 – until they’re reoccupied
- Properties owned by charities – only if the property’s next use will mostly be for charitable purposes
- Community amateur sports club buildings – only if the next use will mostly be as a sports club
If your property is due to become vacant or is already vacant, contact your local authority to make them aware as soon as possible.
What is hardship relief
Throughout England, local authorities have the discretion to reduce your business rates bill with hardship relief.
To qualify, you must satisfy your local authority through the following:
- You would be placed in financial hardship without this relief
- Providing hardship relief to you is in the interest of local people
If you meet the above, contact your local authority to explain the circumstances and you may be able to receive hardship relief.
What is transition relief?
Transition relief allows any changes in regards to your business rates bill to be gradually phased in, rather than a significant increase taking effect straight away. This will make it easier for your business to manage from a financial perspective.
What about relief for pubs?
If you’re a pub in England and your rateable value is below £100,000, you’ll receive a £1,000 reduction on your business rates bill. This relief is available for the following tax years: 2017 to 2018 and 2018 to 2019.
