What is Small Business Rate Relief?

Small business rate relief is available to small businesses with premises below a certain 'rateable value'. It offers small businesses the chance to lower the business rate bill – an opportunity which can be very valuable, particularly for firms that are in the early stages of their life.

You can apply for business rate relief if you only use one property, and that property has a rateable value of £12,000 or less. If you have a property with a rateable value of £6,000 or less then you will get 100% business rate relief until March 2015 (meaning, you won't pay business rates). For properties with a rateable value of £6,001 - £12,000 that business rate relief will reduce gradually from 100% - 0%.

To apply for business rate relief you need to contact your local council.

Business rates are paid by businesses that occupy non-domestic properties, such as office space, factories or shops. There are a few types of organisation that do not have to pay Business Rates, but these exceptions are rare. You may even have to pay rates if you work from home.

Rateable Values

If your business is based in England but outside London, and the rateable value (that is, the value of the property as determined by the Valuation Office Agency) of your premises is less than £18,000, then you're considered a small business. If you are based in London, the maximum rateable value to be considered as a small business is £25,500. Although you don't qualify for small business rate relief your business will be calculated using the small business rate multiplier - even if you have multiple properties - which is currently calculated at 46.2 (2013-2014).

NOTE - the business rate multiplier is the percentage, or pence in the pound, of rateable value that you will pay in business rates.

Other Eligibility Criteria

You should remember that the small business rate relief scheme only applies to businesses based in England and Scotland. The Welsh Assembly runs its own relief scheme, while businesses based in Northern Ireland may be able to take advantage of a so-called 'hardship fund' to reduce their rates if they are suffering from unusual and difficult circumstances.

As of the 2010 revaluation of properties, it will not be necessary to reapply for business rate relief every year. In the past, businesses would have to demonstrate their eligibility for reliefs every year. However, it is still vital that you inform your local authority if you become ineligible for rates relief, as a result of the 2010 revaluation or any subsequent revaluation.If you think you qualify for small business rate relief you should contact your local authority. They will be able to tell you how to apply for the scheme. You can also check the rateable value of your premises on the Valuation Office Agency website.