Small business rate relief to be increased

Small business rate relief to be increased

Small business owners in the UK could be encouraged by the news that small business rate relief is set to increase later this year.

With VAT set to increase in the early stages of 2011 and a number of businesses being exempt from the government's new tax scheme because of where they are based, there has been little to lift the spirits of many small businesses owners of late.

However, one measure announced in the most recent Budget could serve to benefit a number of the UK's smaller firms.

As announced by the previous administration, the government is to increase small business rate relief later this year.

Business Link, the government's enterprise information platform, explained: "Between October 1st 2010 and September 30th 2011 eligible ratepayers will receive small business rate relief at 100 per cent on properties up to £6,000 rather than 50 per cent and a tapering relief from 100 per cent to 0 per cent for properties up to £12,000 in rateable value for that period."

The government stated that there will be no other adjustments to the scheme and confirmed that the eligibility criteria will remain the same.

Businesses have been urged to continue paying their rates in accordance with the latest bill they received and await contact from their local authority with information on how the changes will affect them.

The news comes shortly after small business rate relief thresholds were increased following the most recent revaluation on April 1st.

Since then small business in England have been entitled to rate relief in instances when they occupy just one property and the rateable value of that premises does not exceed £18,000 or £25,500 of those based in London.

Further properties with values lower than £2,600 are disregarded.

These rates for the financial year 2010-11 replace the £15,000, £21,500 and £2,200 figures set between April 2005 and March 2010.

Business link also informed firms that they no longer need to reapply for small business rate relief at the start of a new five-year valuation period, as was previously the case.

The department explained: "If you become ineligible for the relief, you must notify your billing authority.

"If the rateable value of your business premises increased as a result at revaluation, your billing authority will adjust the relief accordingly."

A number of other businesses could be encouraged to seek the advice of a specialist tax accountant after Business Link advised that certain organisations are eligible for further relief.

The information service said that charities and amateur sports clubs can have their business rate bills reduced by 80 per cent or more.

Businesses based in rural areas such as village shops can claim relief if the rateable value of their premises is less than £8,500, while sole pubs and single petrol stations in rural areas can claim relief on properties valued up to £12,500.

7th August, 2010

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