How to reduce your business rates
Things to read
You may qualify for a reduction in your business rates under one of the following criteria:
Reliefs for businesses affected by the revaluation - NEW!
The council has agreed three schemes to support businesses affected by the revaluation and who have experienced increases in their rates bills for 2017/18 and 2018/19 when compared to the previous year’s charge.
- 1. Revaluation Support - if your 2017/18 and/or 2018/19 rates bills has increased due to the revaluation and the increase is more than a specified percentage then you may be entitled to a discount - see below for full details or download the application form
- 2. Supporting Small Businesses - if due to the revaluation you have suffered an increase in your bill due to loss in small businesses rates relief then you may be entitled to help - see below for details. This relief will be automatically applied to your account, however if you think you qualify and relief is not shown on your bill please contact the Business Rates team
- 3. Relief for Pubs - if your rateable value is below £100,000 and you trade as a public house then you may be entitled to a £1000 discount. This relief will be automatically applied to your account, however if you think you qualify and relief is not shown on your bill please contact the Business Rates team.
1. Revaluation support
The government has provided funding for councils to design their own scheme whereby they can consider awarding a discount to businesses facing increases in their bills in 2017/18 when compared to 2016/17 and the increase is due to the 2017 revaluation. Relief will be available under this scheme until 2020/21. Full details of the scheme for 2017/18 and 2018/19 are provided below:
The Revaluation Support Rate Relief Scheme applies for the years 1 April 2017 to 31 March 2018 and 1 April2018 to 31 March 2019. The scheme for years beyond 1 April 2019 have still to be agreed by the council. Under the scheme relief will only be provided where a qualifying ratepayer’s bill has increased due to the 2017 revaluation. The property must be entered in the Rating List and be situated in the area of the London Borough of Brent.
Ratepayers who may benefit from the Scheme will be in occupation of a property with a rateable value of less than £200,000 (£100,000 for 2018/19)
Ratepayers will be excluded from relief where any of the following apply:
- The ratepayer is liable for business rates in respect of six or more properties in the U.K.
- The ratepayer is in receipt of small business rate relief support which limits increases on small properties caused by the loss of small business rates relief to £600.
- The ratepayer was not in occupation of the property on 1 April 2017
- The property for which the ratepayer is making the application in respect of was not entered in the rating list at 1 April 2017.
- The property for which the ratepayer is making the application in respect of was unoccupied on 1 April 2017.
- The ratepayer had arrears of business rates on 1/4/2017 of £500.00 or more from previous years and these have not been cleared or an arrangement agreed by the time the application for revaluation support is made.
- The ratepayer is operating a betting shop or the property has gaming machines present on the premises.
Calculation of relief
Local discretionary business rate relief is calculated after any or all of the following have been applied:
- Exemptions and other reliefs
- Transitional relief or premium
- And before the application of the Business Rates Supplement. Local discretionary business rates relief does not apply to the supplement.
In accordance with the terms of the Government grant for local discretionary business rate relief, all ratepayers are subject to a two percent inflationary increase on their bill to which the relief will not apply.
The business must have seen an increase in their rates bill for 2017/18 when compared to 2016/17 and for 2018/19 must have seen an increase in their bill for 2018/19 when compared to 2017/18 as a result of the revaluation, this being calculated as detailed in the above criteria.
If the increase in rates bill is within the parameters in the table below and the ratepayer meets all the criteria detailed above relief is awarded as a percentage reduction in their net bill for 2017/18 or 2018/19 as detailed in the tables below (after the reliefs and exemptions described above and before the business rates supplement):
2017/18 DiscountSmall properties (up to £28,000 rateable value)
Increase in Bill
- 3% to 4.99% = discount 3% (percentage of net charge)
- 5% to 6.99% = discount 5% (percentage of net charge)
- Over 7% = discount 6% (percentage of net charge)
Increase in Bill
- 5% to 7.99% = discount 4% (percentage of net charge)
- 8% to 10.99% = discount 6% (percentage of net charge)
- Over 11% = discount 7% (percentage of net charge)
Increase in Bill
- Over 15% = discount 5% (percentage of net charge)
Small properties (up to £28,000 rateable value)
Increase in Bill
- 4% to 5.99% = discount 2% (percentage of net charge)
- 6% to 8.99% = discount 4% (percentage of net charge)
- 9% to 11.99% = discount 5% (percentage of net charge)
- Over 12% = discount 6% (percentage of net charge)
Medium properties (rateable value between £28,001 and £100,000)
Increase in Bill
- 10% to 14.99% = discount 2% (percentage of net charge)
- 15% to 19.99% = discount 3% (percentage of net charge)
- Over 20% = discount 4% (percentage of net charge)
Where a qualifying ratepayer’s 2018/19, 2017/18 or 2016/17 rates bill is reduced for any of the following reasons, the amount of their relief will be reduced or removed accordingly:
- A reduction in rateable value in the 2010 and, or 2017 rating lists
- The provision of a certificated value for the 2010 rating list or historical change
- The application of any additional rate relief or exemption
- Vacation and re-occupation of the property
- Any other reason
Where a ratepayer qualifies for relief but even after award of relief is still experiencing severe short term difficulties due to the increase in rates then discretion may be used to award relief over and above that set out in the tables above. The ratepayer would have to demonstrate financial hardship and that the award of relief will help the long term sustainability of the company. The amount of relief would be restricted to the actual increase in rates bill resulting from the increase in rateable value as a result of the revaluation.
Relief will not be awarded where the award of relief would not comply with EU law on State Aid. The application form requires the ratepayer to confirm that they have not received any other State Aid that exceeds in total €200,000, including any other rates relief (other than exemptions, transitional or mandatory reliefs) being granted for premises other than the one to which the declaration and letter relates, under the De Minimus Regulations EC 1407/2013.
2. Supporting small businesses
The supporting small businesses scheme will help those ratepayers who as a result of the change in their rateable value due to the 2017 revaluation are losing some or all of their small business rate relief and, as a result, are facing large increases in their bills. To support these ratepayers, the supporting small businesses relief will ensure that the increase in the bills of these ratepayers is limited to £600 per year (£50 per month). Qualifying ratepayers will receive this relief each year until their actual rate liability is reached. State Aid rules also apply to this scheme.
3. Pub relief
The government announced in its Spring Budget business rates relief for public houses and premises. This allows a £1,000 discount for pubs that have a rateable value of less than £100,000. Note that State Aid rules apply.
London Living Wage
Brent Council wishes to encourage employers to pay its staff the London Living Wage by offering a one-off discount on business rates to the first 100 businesses who receive accreditation from the Living Wage Foundation and submit an application form to the council.
This discount has been set at five times the accreditation fee paid to the Living Wage Foundation. The cost of accreditation varies depending on the size of workforce and the type of organisation but the maximum discount could be up to £5,000 for large employers.
For more information, please visit http://brent.gov.uk/livingwage.
Small business rate relief
This reduction is not available on empty properties or ratepayers who are in receipt of any other mandatory relief e.g. charity relief.Small business rates relief has two elements:
- A percentage reduction in the amount payable
- Calculation of the rates liability using the small business rates multiplier
A percentage reduction in the amount payable
- Rateable value up to £12,000 – no rates payable
- Rateable value between £12,001 and £15,000 – tapered relief between 100% and 0%
The percentage reduction is available to ratepayers who are liable for business rates on:
- One property with a rateable value below £15,000
- One main property and other additional properties that have rateable values less than £2,899 and the combined rateable value of all the properties is under £27,999 in London
Ratepayer are entitled to keep an existing award of small business rate relief for 12 months where they take up occupation of an additional eligible property, which would have previously disqualified them from relief.
You’re a small business but don’t qualify for small business rate relief
From 1 April 2017, if your property in England has a rateable value below £51,000 you’re considered a small business.
Even if you don’t qualify for small business rate relief, your bill will be calculated using the small business multiplier, which is lower than the national multiplier. This is the case even if your business uses more than one property.
In 2017 to 2018 the small business multiplier is 0.466 (46.6p), the national multiplier is 0.479 (47.9p).
Empty properties are exempt from business rates for three months - six months in the case of certain industrial properties. After this period, rates are payable in full unless the unoccupied property rate has been reduced by the Government by order.
In most cases, the unoccupied rate is zero for properties owned by charities and Community Amateur Sports Clubs. In addition, there are a number of exemptions from the empty property rate. If the unoccupied property rate for the financial year has been reduced by order, it will be shown on the front of your bill.
Mandatory charity relief
Charities or trustees of a charity are entitled to an 80 per cent reduction in their business rates if the property they occupy is wholly or mainly used for charitable purposes. To qualify, the organisation will normally have to be registered as a charity with the Charity Commission. However some other organisations may also qualify, such as:
- Scout Groups / Girl Guide Groups
- Voluntary Aided Schools
- Societies registered under the Friendly Societies Act
Relief can also be granted to charity shops, however the charity will only qualify for relief if:
- the shop sells wholly or mainly donated goods; and
- the proceeds are used for the purpose of the charity
For unoccupied properties owned by Charities or trustees of a charity, mandatory relief can be awarded where it is evident that when next in use, the property concerned will be used wholly or mainly for charitable purposes.
In order to receive the relief, please write to us on headed paper stating why you are applying for mandatory rate relief. See our contact details.
Community Amateur Sports Clubs (CASC`s)
Community Amateur Sports Club (CASC's) that are registered with HM Revenues and Custom will be entitled to 80% business rate relief provided that their premises are used wholly or mainly for the purposes of the club.
In order to qualify as a CASC, the sports club must:
- be open to the whole community
- be run as an amateur club
- be a non-profit-making organisation
- aim to provide facilities for, and encourage people to take part in, eligible sport
The council has discretion to award additional relief to charities and non-profit making organisations. Discretionary relief can reduce your bills by up to 100 per cent of the charge. This could be either
- a 'top-up' of up to 20 per cent for organisations that have already been awarded the 80 per cent per cent charity relief, or
- varying relief for non-profit making organisations
To be considered for this type of relief your organisation must meet the following criteria:
- it must be a charity or not-for-profit organisation
- its main objectives are charitable, philanthropic or religious, or are concerned with education, social welfare, science, literature or the fine arts
- it must fulfil the eligibility criteria .
Generally, discretionary relief will be awarded for the whole of the financial year (April to March) unless your organisation is not liable for the whole period, or does not fulfil the criteria for the whole period.
You can apply by downloading and completing the discretionary rate relief application form . You will also need to provide copies of the organisation's last 2 years audited accounts as well as the organisation's articles of association.
Please report any changes of circumstances as soon as they occur.
It may be possible for the Valuation Office Agency to apportion a rateable value between occupied and unoccupied parts of a property.
Prior to submitting any application to the Valuation Office Agency, it must appear to the authority that part of the property will only be unoccupied for a short time.
Any application for 'partly-occupied property relief' must be made in writing to us and your application should include the following information:
- Details of the parts of the property that are occupied and those that are unoccupied
- The circumstances leading to the partial occupation
- What the intention of the business is in relation to the unoccupied parts? For example are you unable to occupy all of the property until refurbishments have been completed
- A plan of the property, clearly identifying the parts that are occupied and those that are unoccupied
- The date from which partial occupation of the property began and when the property is likely to be fully occupied or fully unoccupied
Following receipt of your letter, our inspection officer will visit your premises in order to verify the information you have provided in your request.
The level of relief will be equivalent to 100% of the amount that would have been due on the unoccupied part unless the property would have been subject to an empty property rate charge if it was fully unoccupied.
Relief will end when any of the following happens:
- There is a change in the partial occupation (more or less)
- It is the end of the financial year (though we can use our discretion to award relief in the following year if the circumstances permit it)
- There is a change in the rateable value (through revaluation or an appeal)
The council may reduce business rates where you would otherwise sustain hardship, and where it would be in the interests of the community to do so. You must demonstrate both hardship, and the value to the local community of the services you provide.
Applicants are required to submit a copy of their latest audited accounts so that we can establish whether or not business rates represent a significant proportion of the running expenses of your business.
You may also be required to submit estimates of the current trading position and indebtedness of your business so that we can look into the total debts of the business that are outstanding.
Full details of why the business is experiencing hardship are required together with plans as to how the business can improve its position. You will not be able to use 'the impact of the economic downturn' as a reason to apply for hardship relief. Relief is also unlikely to be given unless there are clear indications that the granting of relief will ensure the long term future of the business. Any relief awarded will be for a maximum of one year only.