Business Rates Discount
The promised 50% discount on business rates will come into force in the new tax year 2020-21
The Ministry of Housing, Communities & Local Government has issued a Business Rates Retail Discount Guidance PDF which can be downloaded here and the previous guidelines for the 33% can be downloaded here.
Properties with a rateable value of less than £51,000 that are wholly or mainly being used as shops, restaurants, cafes and drinking establishments will be eligible for the discount. For these establishments to qualify for the rates relief, the definition of their business has to fit into the following criteria.
- Shops (such as florists, bakers, butchers, grocers, greengrocers, jewellers, stationers, off licences, chemists, newsagents, hardware stores, supermarkets etc.
- Charity Shops
- Opticians
- Post offices
- Furnishing shops/display rooms such as carpet shops, double glazing, garage doors.
- Car/caravan showrooms
- Second-hand car lots
- Markets
- Petrol stations
- Garden centres
- Art Galleries (where art is for sale or hire.
The following business properties are eligible if they are been used for the provision of the following services to visiting members of the public.
- Hair and beauty services, hairdressers, nail bars, beauty salons, tanning shops.
- Shoe repairs/key cutting
- Travel agents
- Dry Cleaners
- Launderettes
- PC / TV domestic appliance repair
- Funeral directors
- Photo processing
- Tool hire
- Car hire
- Restaurants
- Takeaways
- Sandwich shops
- Coffee shops
- Pubs
- Bars
The following list of business properties is not considered by the government guidelines as ‘retail’ so do not qualify for the business rates relief. However, the local authority can determine the exact guidelines and include these businesses if they consider them to be retail.
- Financial services (e.g. banks, building societies, cash points, bureaux de change, payday lenders, betting shops, pawnbrokers)
- Other services (e.g. estate agents, letting agents, employment agencies)
- Medical services (e.g. vets, dentists, doctors, osteopaths, chiropractors)
- Professional services (e.g. solicitors, accountants, insurance agents / financial advisors, tutors)
- Post office sorting offices.
Example 1: An occupied shop with a rateable value of £40,000
Gross rates (before any reliefs) = £40,000 x 0.499 Retail discount (50%):
Rates due (after retail discount):
Example 2: An occupied charity shop with a rateable value of £40,000
Gross rates (before any reliefs) = £40,000 x 0.512 Net rates after charity relief:
Retail discount (50%):
Rates due (after charity relief and retail discount):
= £19,960 = -£9,980 = £9,980
= £20,480 = £4,096 = -£2,048 = £2,048
Example 3: An occupied shop with a rateable value of £13,500 eligible for Small Business Rate Relief (SBRR)
Gross rates (before any reliefs) = £13,500 x 0.490
Net rates after SBRR (50%): Retail discount (50%):
Rates due (after SBRR and retail discount):
= £6,737
= £3,368 = -£1,684 = £1,684
Example 4: An occupied shop with a rateable value of £10,000 eligible for Small Business Rate Relief (SBRR)
Gross rates (before any reliefs) = £10,000 x 0.499 = £4,990 Net rates after SBRR (100%): = £nil Rates bill is nil and, therefore, no retail discount applies
Example 5: An occupied shop with a rateable value of £40,000 eligible for Transitional Relief (TR) and receiving Revaluation Discretionary Relief
= £19,960 = -£1,500 = £18,460 Net rates after Revaluation Discretionary Relief (say):= £15,460 Retail discount (50%): = -£7,730 Rates due (after TR, revaluation relief and retail discount): = £7,730
Example 6: An occupied shop with a rateable value of £18,000 previously paying nothing prior to revaluation 2017 and eligible for Supporting Small Businesses Relief (SSB)
Gross rates (before any reliefs) = £18,000 x 0.499 = £8,982 Supporting Small Businesses Relief (say): = -£6,582
Gross rates (before any reliefs) = £40,000 x 0.499 Transitional Relief (say):
Net rates after Transitional Relief:
Net rates after SSB:
Retail discount (50%):
Rates due (after SSB and retail discount):
= £2,400 = -£1200 = £1200
Example 7: A shop with a rateable value of £40,000 (example 1) but only occupied until 30 September 2019
Gross rates (before any reliefs) = £40,000 x 0.499 Retail discount (50%):
Rates due p.a. (after retail discount): Daily charge while occupied (leap year):
Occupied charge 1/4/20 to 30/9/20 (183 days): Unoccupied property relief (1/10/19 to 1/1/20):
Unoccupied property rates (1/1/20 to 31/3/20), £40,000 x 0.512 x 91/365
Rates due for the year (after retail relief):
= £19,960 = -£9,980 = £9,980 = £27.34 per day
= £4,976 = £nil
= £5,106
= £10,082
Example 8: A shop with a rateable value of £40,000 (example 1) with a rateable value increase to £60,000 with effect from 1 October 2019
Gross rates (before any reliefs) = £40,000 x 0.499 Retail discount (50%):
Rates due p.a. (after retail discount):
Daily charge while occupied (leap year):
Charge 1/4/20 to 30/9/20 (182 days):
Daily charge on standard multiplier (1/10/20 to 31/3/21):
(£60,000 x 0.512)/365
Charge 1/10/20 to 31/3/21 (183 days): Rates due for the year (after retail relief):
= £19,960
= -£9,980
= £9,980
= £27.34 per day
= £4,976
= £84.16 per day = £15,402
= £20,378