How To Lower Your Business Rates In The UK
Budgeting is an essential part of owning a business, and it is essential that you effectively monitor and manage your finances so that you can see where savings can be made. Within the United Kingdom, the government has created some provisions that businesses can take advantage of. One of these provisions is ‘business rate relief’. Business rates are charged on most non-residential properties and they can be extremely high, but there are ways that a business can reduce their business rates by applying for business rate relief.
There are several types of business rate relief that you can apply for, and you will usually have to contact your local council and submit an application so that they can determine whether you are eligible. It is always worth exploring whether you qualify for any of these, because they can drastically lower your business rates and produce considerable savings. It can be incredibly frustrating, especially as a small business owner, when high business rates consume a significant proportion of your profits. What’s more, when it comes to expenses for small business owners many aren’t aware of the many types of relief that they could be claiming.
Fortunately, you have come to the right place. In this article, we’re going to be exploring several ways you can lower your business rates, via charitable rate relief, retail discount, hardship relief or any exemptions. We will also be covering what savings you can make when it comes to your business insurance by checking with your insurance provider to ensure you pay the most competitive rates.
- Charitable Rate Relief
- Retail Discount
- Hardship Relief
- Check Your Business Insurance Provider
Charitable Rate Relief
One way that you could dramatically reduce your business rates is by checking whether you are eligible for charitable rate relief. If your premises is used entirely or partially for charitable work, then you are entitled to a reduction of 80%. However, in order to receive this reduction you will have to complete an application with your local council, who will send you a form.
Alongside charities, community amateur sports clubs can also apply for charitable rate relief. When you contact your local council, it is also worth enquiring whether or not you could receive a 100% discount. This complete discount is referred to as discretionary relief, and you may still be eligible for this discretionary relief even if you are a non-profit or a volunteer organisation.
As of April 1st 2022, the retail, hospitality and leisure relief replaced the retail discount. Typically, you can claim this relief if your business is being used as a shop, restaurant, cafe, pub, hotel, spa, gym, cinema or a music venue. In order to see whether you are or are not eligible, you will have to contact your local council.
If you do qualify, then you could lower your business rate by 50% during the 2022 to 2023 tax year, for a value of up to £110,000 for each business. What’s more, you might even be able to receive this relief alongside other types of relief that you are eligible for, saving you even more.
As implied by the name, this relief is provided to businesses that have experienced immense hardship. What’s more, it is given to business that is regarded as providing particularly important services and products to their communities. The cost for this relief is fulfilled by taxpayers within the locality, which means the requirements for obtaining this relief are quite strict.
A local council will have to ensure that you fulfil two requirements in order to determine whether you are eligible for the relief. First and foremost, you would suffer great hardship if you weren’t given the relief by the council and secondly, the local council believes that it is reasonable to provide the relief whilst protecting the interests of local taxpayers. Once the council is satisfied that these conditions are met, and then you will receive a tax reduction for your business rates bill.
There are certain properties that are completely exempt from business rates. Empty properties are exempt in specific circumstances, usually for a period of three or six months. Once this period has ended, you will be expected to begin paying business rates as usual.
There are empty properties, however, that are exempt from business rates for the time that they are empty, rather than just three or six months. These are properties that are listed buildings, where the owner has become bankrupt, where the owner has been prohibited from entering the premises due to health and safety reasons as well as properties with a rateable value that is below £2,900. The rateable value is a commercial property’s estimated annual rental value, as determined by a valuation officer.
Empty properties aside, there are several other types of non-residential properties that aren’t expected to pay business rates either. This includes agricultural buildings, land such as farms, properties that are registered for religious worship and ceremonies and properties that are used for the welfare of disabled individuals.
Check Your Business Insurance Provider
Considering just how much you could reduce your business rates bill, researching whether or not you are eligible for relief is more than worthwhile. The application process is quite straightforward as well. Another simple way to ensure that your profits are being allocated as resourcefully as possible is by checking with your business insurance provider, so that you can see whether the rates you are paying are competitive as possible.
What’s more, your insurer may provide recommendations that could substantially reduce the premium that you pay for certain coverage, and you should definitely implement these. For example, you could make improvements in equipment maintenance, disaster preparation as well as health and safety training.