1. Introduction to Small Business Rate Relief
Small Business Rate Relief (SBRR) is a government initiative designed to reduce the financial burden of business rates for small businesses operating in England, Wales, Scotland, or Northern Ireland. However, the rules for claiming relief when you own or lease more than one property can be complex.
This guide explains whether you can claim SBRR on two properties, the eligibility criteria, and steps to maximize your savings.
2. What Is Small Business Rate Relief?
SBRR offers reduced or no business rates for eligible small businesses based on the rateable value (RV) of their property. For instance:
- England: 100% relief is available for properties with an RV of £12,000 or less.
- Wales: Similar relief applies for RVs up to £6,000.
- Scotland: Small Business Bonus Scheme provides up to 100% relief.
- Northern Ireland: Rates are calculated differently under the Small Business Rate Relief Scheme.
3. Rules for Claiming SBRR on Two Properties
Main Property Rules
- You can claim 100% relief on your main property if it meets the RV threshold.
Second Property Rules
- You can still claim SBRR if your second property’s RV is below £2,899, and the combined total RV of all your properties is less than £20,000 (or £28,000 in London).
- Relief is only applied to your main property.
Relief for Multiple Properties
- If you acquire a second property, you can continue claiming relief on your main property for 12 months, provided the total RV remains under the threshold.
4. Eligibility Criteria for SBRR
To qualify for small business rate relief:
- Business Size: Your business must be classified as small, operating within the RV thresholds.
- Property Use: The property must be used for eligible business purposes (e.g., offices, shops, or warehouses).
- Ownership or Lease: Relief applies to the person or entity directly responsible for the business rates.
- Rateable Value Thresholds: Ensure that both properties meet the RV requirements for your region.
5. Example Scenarios
Scenario 1: Single Property
- A property in England with an RV of £10,000 qualifies for 100% SBRR.
Scenario 2: Two Properties Below Thresholds
- Main Property RV: £9,000
- Second Property RV: £2,500
- Combined RV: £11,500
- Relief applies to the main property only, as the combined RV is below £20,000.
Scenario 3: Exceeding the Threshold
- Main Property RV: £10,000
- Second Property RV: £5,000
- Combined RV: £15,000
- SBRR remains valid for 12 months after acquiring the second property.
6. How to Apply for Small Business Rate Relief
Follow these steps to apply:
- Contact Your Local Council
- Applications are submitted through your local council’s business rates department.
- Prepare Supporting Documents
- Include property details, rateable values, and business registration information.
- Submit the Application
- Online or via mail, depending on your council’s process.
- Monitor Your Account
- Verify that relief is applied correctly to your main property.
7. When SBRR Does Not Apply
- If the combined RV exceeds the £20,000 (or £28,000 in London) threshold.
- Properties used for non-business purposes.
- If you fail to notify your local council about changes in property ownership or usage.
8. Alternatives to SBRR
If you don’t qualify for SBRR, consider other relief options:
- Rural Rate Relief: For businesses in rural areas with populations under 3,000.
- Charitable Rate Relief: For registered charities using properties for charitable purposes.
- Discretionary Relief: Offered at the discretion of local councils for unique circumstances.
9. Frequently Asked Questions
Q1: Can I claim 100% relief on two properties?
No, SBRR applies only to your main property, even if both properties meet the RV thresholds.
Q2: What happens if I acquire a second property?
You can keep SBRR on your main property for 12 months, provided the combined RV remains below the threshold.
Q3: Does the location of the second property matter?
No, as long as the properties are within England (or your respective region), the combined RV determines eligibility.
Q4: How often do I need to reapply?
Reapplication is not required unless your property usage or ownership changes.
Q5: Can I appeal my rateable value?
Yes, you can appeal your RV through the Valuation Office Agency (VOA) in England or the equivalent body in your region.
10. Conclusion
Small Business Rate Relief can significantly reduce your business rates burden, even if you own or lease multiple properties. While you can only claim relief on one property, understanding the rules and thresholds ensures you maximize your savings. Contact your local council for assistance in applying and managing SBRR.