How the
Scheme works and who is Eligible
If a ratepayer occupies premises with a rateable value of less than £15,000, some form of relief may be applicable under the Small Business Relief Scheme.
Eligibility for relief is based on occupation of premises. The ratepayer may be the owner, leaseholder or tenant, but must be in actual occupation to be eligible for relief.
The relief can only be claimed on one business premises (or on a single 'rateable assessment' in cases where more than one premises are rated together within a boundary).
Ratepayers who occupy more than one (separately rated) premises in England do not qualify for relief. However, any premises that have a rateable value of less than £2,200 can be disregarded in this respect, provided that the aggregate rateable value for all premises occupied is less than £15,000. These figures apply to premises outside London only. (Unoccupied premises in England, and premises in Wales, Scotland and Northern Ireland are not taken into consideration with regard to eligibility).
In some cases an individual will have an interest in more than one occupied business premises from which separate defined businesses are operated. In such cases it is necessary to establish whether each business constitutes a separate legal entity, and thus whether there is more than one 'ratepayer' involved.
Small Business Relief is only applicable for businesses that do not already qualify for relief under another mandatory scheme.
If a business satisfies the criteria for Charitable Relief or Rural Rate Relief (whether or not it is in receipt of that relief), it is not eligible for Small Business Relief.
However, where a premises is subject to relief under a transition scheme, eligibility for Small Business Relief is not affected. This happens in cases where a significant increase in rateable value is being phased in over a period of time. (From 1 April 2005, a new, four year, transition scheme came info force).
In order to be eligible for relief in a particular financial year, the property (rateable assessment) to which the application refers, must have been shown in the local Non-Domestic Rating List on 1 April of that financial year, and for each subsequent day, up to and including the last day that relief is being claimed for.
From 1 April 2007 Ratepayers only need to apply for relief once during a valuation period (or during the remainder of a valuation period), except where circumstances change which may affect entitlement to relief. This means that ratepayers applying for relief from 1 April 2007 will not need to reapply until 2010.
Amount of relief awardable, and calcualtion of charge
The level of relief awardable is dependent on the rateable value of the presmies that a business occupies:
- If the ratebale value is less than £5,000 the reduction is 50%
- Relief reduces on a sliding scale where rateable values are between £5,000 and £10,000 on the basis of 1% for every £100 (eg if the rateable value is £7,500, the reduction will be 25%)
Whilst no percentage reduction is awardable on rateable values between £10,000 and £15,000, qualifying applicants will be charged against a lower rating multiplier than larger businesses.
In order that the scheme is self-financing, larger businesses are now charged against a higher rating multiplier, and the difference between the 2 multipliers has been calculated in order to fund the cost of the scheme. It was determined that a 'buffer zone' should exist, so that properties within the range £10,000 to £15,000 rateable value do not contribute to the cost of the scheme. In order to be charged against the lower multiplier, businesses must still apply for Small Business Relief, and must satisfy the other criteria.
For 2007/2008 ratepayers that qualify for Small Business Relief are charged rates of 44.1 pence in the pound, whilst other ratepayers are charged 44.4 pence in the pound.