The promised one-third discount on business rates will come into force in the new tax year 2019-20.
The small business rate multiplier for 2019-20 is 0.491 and the standard business rate multiplier for 2019-20 is 0.504
The Ministry of Housing, Communities & local Government has issued a Business Rates Retail Discount Guidance PDF which 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 the 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
- Post offices
- Furnishing shops / display rooms such as carpet shops, double glazing, garage doors.
- Car / caravan show rooms
- Second hand car lots
- 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, hair dressers, nail bars, beauty salons, tanning shops.
- Shoe repairs / key cutting
- Travel agents
- Dry Cleaners
- PC / TV domestic appliance repair
- Funeral directors
- Photo processing
- Tool hire
- Car hire
- Sandwich shops
- Coffee shops
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.
The retail discount (one third) is always calculated after mandatory relief and other discretionary relief funded by section 31 grant. See the PDF download for more examples.
An occupied shop with a rateable value of £40,000
Gross rates £40,000 (before any reliefs)
£40,000 x 0.491 = £19,640
Retail discount 1/3 = £6,547
Rates payable = £13,093
An occupied shop with a rateable value of £13,500 eligible for Small Business Rate Relief (SBRR)
Gross rates £13,500 (before any reliefs)
£13,500 x 0.491 = £6,629
Nett rates after (SBRR) (50%) =£3,314
Retail discount 1/3 = £1,105
Rates payable = £2,210