Shoaib Aslam, CEO and founder of Launch My Business.
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Small businesses play a vital role in the UK economy, driving growth and innovation and providing employment. However, in recent years small businesses have faced significant challenges, including the impact of the pandemic. To support these businesses and the UK’s economic recovery, the government has expanded its support through the Small Business Rates Relief programme.
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What is Tariff Relief for Small Business?
Tariff Relief for Small Businesses (SBRR) is a government initiative aimed at providing financial support to small businesses. It lowers business rates on qualifying properties, providing a much-needed boost to the finances of small business owners. In addition to lowering business rates, the program also provides eligible businesses with access to government-backed loans and grants, providing the financial support needed to grow and expand.
Who is eligible for the SME rate reduction?
Eligibility for SBRR in England is based on several factors, including:
• The taxable value of the business premises: Your property must have a taxable value of less than £15,000 to qualify for a total exemption. Properties with a taxable value between £15,000 and £51,000 may qualify for a reduced level of exemption.
• The type of company: To qualify for SBRR, your business must occupy one property with a taxable value of less than £15,000 or one principal property with a taxable value of less than £15,000 and ancillary properties, each with a taxable value of less than £2,900 . The total rateable value of all properties must be less than £20,000.
• Other criteria: Your company may not be eligible for SBRR if your company is not the only company on the property; your company is active in specific industries, such as financial services or real estate development; or you have received state aid above a certain threshold.
It is important to note that the eligibility criteria and the amount of the exemption may vary depending on the region and local government where the company is located. Therefore, it is recommended that companies check with their municipality to confirm your eligibility and to request the rate reduction.
How much support is available through the program?
The exact amount of support available through the Small Business Rates Relief scheme varies depending on the size and type of business. If you qualify, you can get:
• 50% off your business rate bills for tax year 2022 through 2023 (April 1, 2022 through March 31, 2023).
• 75% off your business rates for tax year 2023 to 2024 (April 1, 2023 to March 31, 2024).
The maximum you can get in any tax year is £110,000 per company.
What are the advantages?
1. Reduced business rates
One of the main benefits of the Small Business Rates Relief program is the reduction in business rates for qualifying properties. This cut provides a much-needed boost to the finances of small business owners, easing the financial burden many businesses face.
2. Access to government-backed loans and grants
In addition to lowering business rates, the scheme also provides eligible businesses with access to government-backed loans and grants, providing the financial support needed to grow and expand. For example the Bounce Back Loan Scheme has handed down £38bn in small business loans since its launch in 2020.
3. Supporting the UK’s economic recovery
The Small Business Rates Relief Scheme is an essential support for the UK’s small businesses, easing the financial burden of many entrepreneurs and providing the support they need to grow and prosper. By providing financial support and reducing business rates, the scheme helps support the UK’s economic recovery and ensure small businesses have the resources they need to succeed.
Revaluation of business rates
The Bureau Taxatiebureau (VOA) updates the cadastral value of commercial real estate during the revaluation process to reflect changes in the real estate market. In England and Wales, the most recent revaluation was made on April 1, 2017, using taxable values ​​from April 1, 2015. The subsequent revaluation, which will be based on taxable values ​​from April 1, 2021, is expected to take effect in April 1, 2023 .
You can get small business support starting April 1, 2023 if both of the following apply:
• The bill for your business premises goes up after the next revaluation on April 1, 2023.
• You lose all or part of your small business or rural rate deduction.
Conclusion
In conclusion, the Small Business Rates Relief Scheme continues to be an essential support for the UK’s small businesses, helping to ease the financial burden of many entrepreneurs and providing the support they need to grow and prosper. With over 1.5 million small businesses eligible for the scheme, the UK Government’s continued support is a positive step towards a strong and sustainable economic recovery for the country. By providing financial support and reducing business rates, the Small Business Rates Relief scheme helps support the UK’s small businesses and ensure a bright future for the country’s economy.
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