Save on Business Rates: A Step-by-Step Guide to Reducing Commercial Rates

How to Reduce Your Commercial Rates Bill: A Guide for UK Businesses

Commercial rates are a significant cost for businesses in the UK. While essential for funding local services, high rates can strain cash flow, especially for small businesses. This guide outlines practical steps and strategies to help you reduce your commercial rates bill and take advantage of available relief programs.

1. Understand How Business Rates are Calculated

Commercial rates are based on a property’s rateable value, determined by the Valuation Office Agency (VOA). The calculation is:

Rateable Value × Multiplier = Annual Rates Bill

Key Terms:

• Rateable Value: The estimated annual rental value of the property if let on the open market.
• Multiplier: A figure set annually by the government, which adjusts for inflation.

Understanding how your rates are calculated is crucial for identifying potential savings.

2. Check Your Rateable Value

Request a Reassessment

If you believe your property’s rateable value is too high, you can request a reassessment from the VOA. Common reasons include:

• Errors in Valuation: Incorrect property size or usage details.
• Market Changes: A drop in local property rental values.

How to Challenge

• Visit the VOA website to view your property’s rateable value.
• Submit a formal appeal if you find inaccuracies.

3. Apply for Business Rates Relief

The UK government offers several relief programs to help businesses reduce their commercial rates:

Small Business Rates Relief (SBRR)

• Eligibility: Properties with a rateable value of less than £15,000.
• Relief Amount: 100% relief for properties with a rateable value up to £12,000; tapered relief for values between £12,001 and £15,000.

Retail, Hospitality, and Leisure Relief

• Eligibility: Businesses in the retail, hospitality, and leisure sectors.
• Relief Amount: Up to 75% relief in 2024-2025, subject to caps.

Empty Property Relief

• Eligibility: Relief for properties that are empty and unused for more than three months.

Charitable Rate Relief

• Eligibility: Charitable organizations can receive up to 80% relief.

Hardship Relief

• Eligibility: Businesses facing financial hardship may apply for discretionary relief from their local council.

4. Consider Temporary or Partial Use

If your property is partially occupied or temporarily vacant, you may qualify for a reduced rates bill under Partially Occupied Property Relief or Empty Property Relief.

• Partially Occupied Relief: Contact your local council to explain the situation and request relief.
• Empty Property Exemptions: Some properties, like listed buildings, are exempt for longer periods.

5. Explore Exemptions for Certain Property Types

Certain types of properties are exempt from business rates altogether, including:

• Agricultural buildings and land.
• Religious properties (e.g., places of worship).
• Fish farms and moorings.

Check your property’s classification to see if it qualifies for exemptions.

6. Negotiate with Your Local Council

Discretionary Relief

Councils have the authority to provide additional discretionary relief for businesses facing unique challenges. Make a case for how high rates are affecting your operations, providing financial documentation to support your request.

7. Use a Business Rates Consultant

Professional consultants can help identify errors in your rates bill, appeal valuations, and apply for relevant relief programs. While they charge a fee (often a percentage of the savings), their expertise can lead to significant reductions.

8. Maximize Tax Deductions

While you may not directly reduce your rates bill, business rates are tax-deductible expenses. Ensure you account for these costs when filing your corporation tax return to improve overall cash flow.

9. Monitor Policy Changes

The government frequently reviews business rates policies. Stay updated on announcements, such as temporary relief programs or changes to multipliers, that could impact your bill.

How Fraser Bond Can Help

At Fraser Bond, we assist businesses in navigating the complexities of commercial rates. Our services include:

• Rates Auditing: Identifying overcharges and ensuring accurate assessments.
• Relief Applications: Helping you secure the maximum reductions available.
• Appeals Management: Guiding you through the VOA appeals process.

Contact Fraser Bond today to reduce your commercial rates bill and optimize your business operations.