Business rates are a common obligation for non-domestic properties, encompassing various business premises. However, if your property’s rateable value falls below £15,000 and your business operates from a single property, you may be eligible for small business rate relief. In this article, we will explore the nature of the relief, conditions for eligibility, considerations for holiday lets, multi-property scenarios, claiming the relief, and the impact of the 2023 revaluation.

Understanding Small Business Rate Relief

The relief amount is determined by the rateable value of your business property. For properties with a rateable value of £12,000 or less and only one business property, you qualify for 100% relief, resulting in no business rates payment. If the rateable value falls between £12,000 and £15,000, relief is calculated using a formula to gradually reduce from 100% to 0% based on the value range.

Specifics for Holiday Lets

Starting from April 2023, specific conditions must be met for holiday lets to qualify for business rates relief. The property must be actually let as a holiday let for at least 70 nights in the tax year and available for letting as a holiday let for at least 140 nights. Furnished holiday lets meeting the tax requirements are considered to meet the business rates test, providing a more lenient qualification. Properties failing the business rates test will be subject to council tax instead.

Multi-Property Considerations

If you possess more than one business property, you can still qualify for small business rate relief if none of the other properties have a rateable value exceeding £2,899. Additionally, the total rateable value of all your properties must not exceed £20,000 (£28,000 in London).

Claiming the Relief and Revaluation Impact

To avail yourself of the small business rate relief, it is necessary to make a claim. Contact your council to learn the process and requirements for submitting a claim.

2023 Revaluation and Transitional Relief

Properties undergo revaluation every five years, affecting business rates. From 1 April 2023, rates are based on the rateable value at 1 April 2021. Changes to your rateable value may impact your entitlement to small business rate relief. If your bill increases due to revaluation, transitional relief may apply to cap the increase. The cap varies depending on the rateable value and year, gradually phasing out as the bill aligns with the new rateable value.

 

Small business rate relief offers valuable benefits to eligible businesses, providing relief from business rates based on rateable value. Understanding the qualifying criteria, conditions for holiday lets, considerations for multiple properties, and the claiming process is essential to maximize relief. Stay informed about revaluations and transitional relief to ensure accurate billing. By leveraging small business rate relief, businesses can alleviate their financial burden and focus on growth and success.

 
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