Many small businesses are expressing concerns over business rates. Rates are on the rise as councils try to raise revenue and it is the period of revaluation of the rateable value of business premises, on which rates are based.
This is done every 5 years and many small businesses face a large increase in their rates as they will no longer qualify for small business relief based on their revised rateable value. Although many rateable values are increasing it is also important to note that the cut off point at which you can qualify for small business rate relief is increasing from £12,000 to £15,000 from April 2017. From the 1st April 2017 you will not have to pay business rates on a property with a rateable value of £12,000 or less, this relief point was previously set at £6,000 so hopefully more businesses in town will be eligible for total rate relief.
Philip Hammond delivered his Spring budget yesterday and announced three measures which are going to be put in place to try and alleviate those fears. Firstly its good news if your business is a pub as 90% of pubs are going to be granted a £1000 reduction to their business rates. If the pub’s rateable value is deemed less that £100,000 it will be eligible for the relief. This is an attempt to try to reduce the numbers of pubs being forced to close down due to poor revenues and rising costs. On the downside though this relief has only been guaranteed for a year and beer duty is set to rise again in line with inflation.
Secondly the chancellor also announced plans for a £300m fund available to enable local councils to give discretionary relief in special cases or for those small businesses who are going to be hit especially hard with the business rate increases. This will be specifically aimed at small independent businesses in town centre locations who will see greater rate increases rather than the big companies with out of town warehouses.
Finally the chancellor announced that any business no longer eligible for small business rate relief under the new valuations would benefit from a cap which will limit rate increases to £50 a month.
With changes afoot it is very important that as the business owner you are aware of the rateable value of your premises and whether you are entitled to relief. For properties valued between £12,000 and £15,000 your rate relief wil be calculated on a sliding scale. All applications for small business rate relief can be made through the Rother council website.