Begbies Traynor Group

Business Rates Exemptions, Reductions & Reliefs

Date Published: 08/11/2023

The pressure placed on government to reduce business rates has led to a range of reliefs and exemptions being made available, with some local authorities also offering discretionary reliefs to local businesses that meet their criteria.

Business rates have placed a huge burden on UK companies since their introduction in 1990, and getting a reduction in monthly payments can make the difference between trading on as a solvent company, or sinking into unmanageable debt and eventually closure.

It is also important that directors are aware of, and take full advantage of any reductions offered by the local authority.

So what exactly is available on a national scale with regard to business rate reliefs and exemptions, and what might you be able to claim for locally?

What is small business rate relief?

This is based on the rateable value of your property, which must be less than £12,000 in order to be eligible.

  • For properties with a rateable value of between £6,001 and £12,000, a sliding scale of relief is applied
  • If your company has more than one property, each having a rateable value not exceeding £2,600, the total rateable value when added together is used as the basis for reliefs.

What is rural rate relief?

There is a mandatory relief rate of 50% for rural businesses located in an area with a population of less than 3,000. This could be increased up to 100% at the discretion of your local council. Rural retail businesses with a rateable value of less than £16,500 may also be eligible to apply locally for additional business rate reductions.

Enterprise zones

Twenty-four enterprise zones currently exist in England, a scheme intended by the government to boost trade, help local communities and provide jobs in local areas.

If you have started a business in one of these zones or are relocating your business there, you may be eligible for up to 100% relief on business rates for up to five years (with a maximum limit of £275,000), with the proviso that you have moved or set up by March 2018.

You can find a full list of enterprise zones in England on the HM Government website, where you will also see the contact details needed to find out more information and apply if you meet the requirements.

Exempted buildings and empty buildings reliefs
Properties exempt from business rates include:

  • Those used for the welfare or training of disabled people
  • Buildings registered for religious use
  • Fish farms and some other agricultural buildings.

If your business premises are going to be empty for some time, you are not liable to pay business rates for up to three months, after which time the normal rules apply again unless you fall into one of these categories, in which case the reliefs may be extended:

  • Warehouses and other industrial premises may be exempt for a further three months
  • Listed buildings
  • Those used for charitable purposes
  • Amateur sports clubs. 

Retail relief

You may be able to get up to £1,000 deducted from your business rates bill if yours is a retail property, but there are strict eligibility criteria:

  • The building has to have a rateable value of £50,000 or less
  • Its main use must be as a café or other drinking establishment, restaurant or shop.

It is also worth knowing that if you occupy premises that were formerly registered for retail use, you may be able to obtain business rate relief of 50% if the building had been empty for a year or more previously.

Charitable rate relief

Should your business premises be used for charitable work, you may be eligible to receive up to 80% relief for business rates.

Other discretionary reliefs and reductions may be available, so it is well worth checking with your local council for details, and to find out if you would be eligible.

How are business rates calculated?

The rateable value of your premises is used to calculate your business rates – you can find out the current rateable value of a non-domestic property by inputting the postcode into the Valuation Office Agency (VOA) website.

This is where you will also find the ‘multiplier’ – the number of pence for each pound of rateable value. Simply multiply the rateable value by the multiplier for your area and business size, deduct any applicable reliefs or reductions, and you arrive at your business rates figure for the year.

About The Author

Meet the Team

Jonathan was a founding director of Cooper Williamson which was acquired by Begbies Traynor in October 2013. 

Jonathan was involved in the inception and continued with the development of the "Real Business Rescue" website, which provides advice and assistance for the directors of limited companies which are experiencing various degrees of financial distress throughout the UK. 

Jonathan is a member of the Insolvency Practitioners Association MIPA and is a Member of The Association of Business Recovery Professionals MABRP.

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