By Joanna Norris, Partner at Ratio Law
If you run a business out of a non-domestic or commercial property, chances are you will have to pay business rates. These are paid to local authorities and go towards funding local services.
Business rates can be a considerable cost – especially for smaller businesses. Since the start of the new tax year though, the government has introduced a few changes to help companies and ease some of the financial pressure off them.
So what are these changes, and could your business benefit from them?
- 12 monthly instalments
Business rates used to have to be paid over ten monthly instalments. Now, businesses can opt to pay them over 12 months instead. This should give companies greater control over their cash flow.
- Rate relief
For 2014-15 and 2015-16, shops, restaurants, cafes, pubs and bars that have a rateable value of below £50,000 may be eligible for a £1,000 rate relief.
- Empty retail premises
Businesses that move into retail premises that have been empty for a year or more can benefit from a 50 per cent business rate discount. The discount will be applied for a maximum of 18 months, between 1 April 2014 and 31 March 2016.
- Capped increase
Normally business rates increase in line with the Retail Price Index, but it is currently being capped at two per cent.
Business rates can be contentious topic, and while these changes should be a bit of welcome news for some businesses, there are some who argue more needs to be done. From basing rates on sales rather than property value, to eradicating them all together, there are lots of different views and we’re undoubtedly going to see more changes to the system over the coming years.
For more information and details on how to calculate your business rates, visit the government website here, or, if you’re about to sign for a new commercial property and want some advice on business rates contact one of the Ratio team.