Small business rate relief

Summary Guide - Outline of the Scheme

There will be two rating multipliers:

1. Small Business Rating Multiplier - 41.5p per pound of rateable value.
2. Non Domestic Rating Multiplier - 42.2p per pound of rateable value.

Properties with a rateable value of less than £5,000 will receive 50% relief.

Relief will decrease on a sliding scale of 1 % for every £100 below £10,000 rateable value.

Properties with a rateable value between £ 10,000 and £ 15,000 will receive no rate relief but are classed as being in a Buffer Zone.

All properties with a rateable value below £10,000 will be charged at 41.5p in the pound rateable value.

Properties with a rateable value in excess of £15,000 are classed as a Large Business and will have their bills calculated by reference to the Non Domestic Rating Multiplier.

All ratepayers occupying properties eligible for relief will have to complete an application form every year.

This will also apply to ratepayers whose properties fall within the Buffer Zone.

Applications can be made up to six months prior to the start of the chargeable year and for up to six months after the end of the year concerned.

The Government intends relief to go to small business ratepayers and does not see ratepayers who occupy more than one property as being such. For this reason ratepayers who occupy more than one property will only get relief if the additional properties they occupy have a rateable value of less than £2,200 and the total rateable value of all the properties is below £15,000.

Example

Properties with a rateable value below £5000 will get 50% relief on their rates.
Relief will decrease on a sliding scale of 1 % for every £100 rateable value up to £9999.
A property with a rateable value of £6,500 will get 35% relief as follows:

Difference between £6,500 and £5,000 is £1,500 which represents 15 lots of £100. Every £100 over £5,000 results in the loss of 1% relief therefore relief is equal to 35% (50% less 15%)

The actual charge for the above example is as follows:

• Annual Charge Due (6,500 x 41.5) = £2,697.50
• Small Business Relief (35%) £944.12
• Non Domestic Rates Bill 2005/2006 = £1,753.38