The Autumn Statement promised up to £7 billion worth of support to businesses seeing a rise in their business rates as the cost of living increases. The supporting small business relief scheme helps eligible SMEs adjust to rising rates by capping the increase in bills to £600 for the next financial year.
This article will take an in-depth look at the scheme and what it means for small business property owners.
What Does Small Business Relief Mean?
Small business relief is a set of discounts or exemptions that small businesses receive depending on their property size. If your business property is less than £15,000, or you only have one property, you will receive a discount on your business rates.
As a rough guide for the financial year ending March 2022:
- Business properties valued at under £12,000 will not pay business rates
- Businesses valued at £12,001 and £14,999 will pay reduced business rates
- When you get a second property, your first one is still eligible for relief for a year
- If all your properties are valued at less than £20,000 (London is £28,000), your main property may still be eligible if your other properties are valued at less than £2,899 each
Businesses valued at £13,500 will receive 50% relief on their business rates, with the relief available on a sliding scale between £12,001 and £14,999. In April 2023, property values will likely rise after the revaluation process.
This means that individuals that fall under the small business relief scheme may lose financial relief due to the rising cost of bills. The supporting small business relief plan helps cap the rising bills, so eligible SMEs can still benefit from the original scheme.
How Do I Apply for Small Business Relief?
You can apply for small business relief through your local council. Each council will have an application form to fill out. The council will also be able to advise on whether you are eligible for the supporting small business relief bill cap depending on the supporting small business relief criteria.
Who Qualifies for Rate Relief?
Businesses already eligible for relief will receive additional support if their property bills rise due to the April revaluation. They may also qualify if they lose any portion of their small business relief. Relief is already ongoing in the form of the energy bill support outlined in the September mini-budget. This rate relief for eligible SMEs will cap all bill rises for the financial year to no more than £600. You do not qualify for rate relief if your property is empty or you receive mandatory charity relief.
Can Small Business Relief Be Backdated?
Small business relief can be backdated to 2017 as long as you can supply the evidence you met the criteria. This is because the scheme started in 2017 and was originally planned to end in 2022. However, the increasing living costs have seen this extend to March 2025, along with the supporting bill caps implemented in the budget earlier this year for April 2023.
What Happens If You Don’t Pay Business Rates?
You should always stay up to date with finance and investment articles to get information on potential discounts like small business rate relief. If you are unable to pay your rates for any reason, you should contact the Business rates office as quickly as possible to discuss solutions.
If you miss an instalment of your business rates, you will receive one reminder that payment is due. The council will send only one reminder yearly before court action is taken to recover the debt. If you don’t pay your business rates, you will face financial penalties and even as much as three months of prison time.
If you miss your payments a second time, you will lose the ability to pay in instalments and must then pay the debt in full. Your local council will apply to the Magistrates for a liability order so they can recover the debt if it goes unpaid.
Stay Informed with the Chamber of Business
Stay fully informed and up to date on when your business rates are due and whether you are entitled to small business relief. Need more information? The Chamber of Business is written by financial and investment experts to keep you up to date on the latest relief available for SMEs.