Exemptions and reliefs for business rates

Paying Business Rates on time is a huge burden on UK businesses. Hence, getting a monthly rate reduction can help businesses stabilize their profits. Instead of sinking into unmanageable debts, businesses can focus on growth and expansion.

Since COVID-19 Pandemic, the UK Government has introduced small business rates relief and exemptions to reduce business rates. Most of these are from local authorities across Europe. The terms & conditions to avail of such discounts vary depending on the business type and location. 

This guide is to help businesses in need. Take full advantage of these exemptions and reliefs in the UK. Let’s discuss them in detail!

Difference between Exemptions and Reliefs for Business Rates:

Businesses get exemptions for business rates for a particular period, for example, 3 months or 6 months. So, an exemption is valid for a specified period and can discontinue depending on the circumstances change. The businesses in the UK that can get exemptions include:

  • A deceased person with estates
  • Empty properties 
  • Listed buildings
  • Ancient monuments
  • Industrial properties
  • Businesses in rural areas
  • Enterprise zoned businesses
  • Charities and sports clubs
  • Health centre owners

Meanwhile, small business rates relief offers a reduced rate of up to 100% to businesses. So, the government of the UK covers the entire business rate. Any of the above businesses and property owners can apply for relief through their local council.

Small Business Rate Relief and Exemption

You can get small business rates relief with the following conditions:

  • The property value must be less than £15,000
  • The business should have one property in use (you can still apply if you use more)

You need to contact the local council to get small business rate relief.

The benefits: 

  • There is no need to pay business rates on a property worth £12,000 or less. 
  • For properties above £12,001, the relief rate gradually decreases from 100% to 0%.
  • You’re a small business but do not qualify for small business rate relief.
  • If the property in England has worth below £51,000, the bill rate is calculated with the small business multiplier (49.9p). It is lower than the standard multiplier (51.2p). 
  • Business owners with multiple properties can avail the total rateable value of £20,000

Example: A property value of £13,500 gets 50% off the bill paid. But a property worth £14,000 gets 33% off.

Rural rate relief

If your business is in the rural areas of the UK, apply for the small business rates relief. You can get rural rate relief with the following conditions:

  • The business location should have a population below 3,000.
  • The only village post office or shop worth value of up to £8,500
  • The only petrol station or public house worth value of up to £12,500

You can contact the local council to check your eligibility. Then you will not have to pay business rates any further.

Charitable rate relief

This relief is for charities and amateur sports clubs in the UK. You can apply for charitable rate relief through your local council. If it gets approved, you can get a rate reduction by up to 80%.

Reliefs and Exemptions for Enterprise zones

Currently, there are 20 enterprise zones across England. The small business rates relief is for businesses running in these enterprise zones. It is to boost business trades and help local communities with local job opportunities. If you are running a business in one of these zones, you are eligible to have the following benefits:

  • Get up to 100% relief on business rates.
  • Given for up to five years.
  • The maximum limit is £275,000.

Find your local enterprise zone in England on the HM Government website. Apply if you meet the eligibility requirements.

Exempted and Empty Buildings Reliefs and Exemptions

The eligibility criteria for exempted and empty properties are different. Let’s discuss both.

Relief for Exempted Buildings: Here is the list of exempted properties that can avail small business rates relief:

  • Agricultural land, buildings, fish farms, etc.
  • Buildings used for professional training or welfare
  • Buildings registered for religious worshiping like church halls

However, the legal requirements are different for these exemptions, based on the property location. If the property is in England, you can apply for Exempted and Empty Buildings Relief using your business rates valuation account. The conditions are different for the properties is in Wales.

Relief for Empty Properties: Empty house owners don’t need to pay business rates for up to 3 months. The eligible properties include:

  • Industrial premises and warehouses
  • Listed buildings
  • Buildings with a value under £2,900
  • Properties used for charities
  • Community sports clubs

You can apply for these reliefs through your local council in the UK.

Exemptions for Retail

Retailers across the UK can avail of exemptions, including shops, restaurants, cafés, bars, cinemas, and hospitality businesses. The benefits you can get:

  • 100% cut down of your business rates bills
  • Validity lasts for the first 3 months
  • 66% cut down of your business rates bills for the next 9 months
  • Capital help of £105,000 to businesses suffering due to COVID

You can get the retail exemption on top of any other small business rates relief. So, contact your local council to apply at the earliest.

Transitional reliefs and exemptions

Each year the business rates change as per the business rates revaluation. Transitional relief is for businesses that encounter bill rate changes each year. The eligibility criteria include:

  • Property located in England.
  • Business rates go up or down by a huge amount.

If you are eligible, the local council will adjust the bill automatically. Once the bill reaches the full amount, you will stop getting transitional relief.

How are business rates calculated?

Visit the Valuation of Agency (VOA) website to find the rateable value of your property in the UK. The officials will help you calculate your business rates according to the property rateable value. Find the ‘multiplier’ value and multiply it with the property’s rateable value. 

If you have a non-domestic property, you can check your eligibility to apply for any of the above small business rates relief. You can deduct any applicable exemptions or reliefs as well. The ultimate result is your business rates figure for that financial year.


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