Reliefs and exemptions
If you pay business rates there are several ways in which you could reduce your bill.
Small business rate relief
You can get this relief if you only occupy one business property in England and that property has a rateable value (RV) of less than £15,000. The relief does not apply to empty properties.
From 1 April 2017, you will get 100 per cent relief for a property with an RV of £12,000 or less, meaning you will not pay any business rates for it. The application form 'Small business rates relief' can be found at the bottom of this page.
For properties with an RV of between £12,001 and £14,999, the rate of relief is awarded on a sliding scale decreasing from 100 per cent to 0 per cent. Here are some indicative examples:
|Rateable Value||Percentage Reduction|
|Up to £12,000||100 per cent|
|£12,750||75 per cent|
|£13,500||50 per cent|
|£14,250||25 per cent|
|£15,000 and over||0 per cent|
Under the current legislation, if you take on a second property you can still keep the relief on your original property for a year.
If you occupy more than one property, you can get small business rate relief as long as the RV of each of your other properties is less than £2,900 and the total RV of all the properties (including the main one) is less than £20,000. The relief is applied to the main property.
If your property has an RV below £51,000, your business rates will be calculated using the small business multiplier instead of the standard one. This is the case even if you have multiple properties. The higher multiplier will apply if you are liable to pay rates on an empty property or if you are in receipt of mandatory relief.
The multiplier shows the percentage (pence in the pound) of the RV that you pay in business rates. Please visit the link 'Details of the current multipliers and how your rates are calculated' above for details.
Prior to 1 April 2017, 100 per cent relief was awarded if you occupied one property with an RV up to £6,000, with a sliding scale decreasing from 100 per cent to 0 per cent for properties with an RV of between £6,001 and £12,000. If you occupied more than one property, you got the relief as long as the RV of each of your other properties was less than £2,600 and the total RV of all the properties (including the main one) was less than £18,000. The relief was applied to the main property.
Supporting small businesses relief scheme
The government has made funds available to local authorities to implement the supporting small businesses relief scheme, following the valuation office agency’s 2017 revaluation of non-domestic properties.
This relief is intended to help those ratepayers who have lost some or all of their small business rate relief (SBRR) as a result of the increase in their business property’s rateable value (RV) and have consequently had large increases in their business rates bills from 1 April 2017.
To support these ratepayers, the supporting small businesses relief scheme will ensure that the increase per year in the bills of these ratepayers is limited to the greater of either a percentage increase of 5 per cent, 7.5 per cent, 10 per cent, 15 per cent and 15 per cent per year from 2017-2018 to 2021-2022 (all plus inflation), or an increase of £600 per year.
More details can be found in the document 'Supporting Small Businesses Relief Scheme notes' at the bottom of this page.
Discretionary rate relief policy (revaluation)
We have been allocated £2.2million of government funding spread over four years to provide a relief scheme to support those ratepayers who have faced a steep increase in their business rates from 1 April 2017, following a national revaluation of all non-domestic properties. £1.3million of that funding was allocated for 2017-2018, £0.63million for 2018-2019 and £259,000 for 2019-2020. The policy document for 2018-2019 can be viewed at the bottom of this page.
Following a review of this policy, a change has been made to limit the net increase in rates for 2018-2019 to 6.2% (instead of 8%) for properties which fall within the £20,001 to £100,000 rateable value band, subject to a cap on relief of £10,000. This allows for more support to small and medium sized businesses that have continued to face significant increases in their rates bills. The 2019-2020 scheme is currently being scoped.
The government has introduced a retail discount scheme for all occupied properties with a rateable value of less than £51,000 for 2019-2020 and 2020-2021. The value of the discount will be one-third of the bill after any reduction for other reliefs. As the scheme comes under discretionary rate relief powers, a local policy has been implemented under which all eligible businesses will be considered for relief. This policy can be found at the bottom of this page.
In order to be eligible for the discount, the property must be:
- Have a rateable value of less than £51,000; and
- Wholly or mainly being used as a shop, restaurant, café or drinking establishment.
Enterprise zone rate relief
Enterprise zones were created by the Government in the 2011 budget. There are now a number of zones around the country. They exist to stimulate business growth in designated areas by providing financial incentives, and by simplifying planning arrangements. Their aim is to create jobs and drive local and national economic growth.
There are two enterprise zone sites in Leicester, which were created in April 2017:
- Pioneer Park, which is a knowledge based business park, north of the city in the vicinity of the National Space Centre;
- Waterside, which stretches eastward from the River Soar at Frog Island and Blackfriars, towards the southern boundary of Abbey Park.
From 1 April 2017, we are able to offer rates reductions to businesses which start to occupy premises within these zones or which are already based on the park and expand their operations - up to 100 per cent of the rates payable can be awarded.
To be awarded relief, a business must satisfy the requirements of the relevant policy and complete the application form, all of which can be found below. The policies are designed to encourage property use which complements the objectives of the zone.
- Pioneer Park Enterprise Zone Policy (2018)
- Pioneer Park Enterprise Zone - application form (2018)
- Waterside Enterprise Zone Policy (2018)
- Waterside Enterprise Zone - application form (2018)
- Enterprise Zone Boundary Plan (2018)
Relief for local newspapers
The Government is providing funding to local authorities so that they can provide a discount worth up to £1,500 a year for 2 years from 1 April 2017, extended for another year to cover 2019-2020, to office space occupied by local newspapers. This is up to a maximum of one discount per local newspaper title and per hereditament, and up to state aid limits. The relief will be delivered through local authority discretionary discount powers (under section 47(3) of the Local Government Finance Act 1988). Eligibility criteria for this relief is set out in a guidance note: “The case for a business rates relief for local newspapers”, which can be obtained at GOV.UK.
Please see the document ‘Business rates relief for local newspapers - policy' at the bottom of this page for more information.
Local discount discretionary rate relief grant scheme
The aim of this scheme is to help create the right environment for businesses to achieve their growth plans, create jobs, and contribute to the economic development of Leicester.
The scheme is split into three themes:
- Supporting high-growth businesses;
- Bringing properties with significant economic value back into use; and
- Attracting inward investors
Businesses can apply for relief through a competitive application process. Awards are discretionary, and meeting the criteria does not automatically trigger relief. The 'Local Discount discretionary rate relief grant scheme' policy and application form can be found at the bottom of this page.
The owner or the leaseholder is liable to pay rates on an empty property. Properties are exempt from business rates for the first three months after they become vacant, or six months in the case of certain industrial properties such as factories or workshops. The exemption starts from the date the property first becomes empty. If you buy or lease a property that is already unoccupied, the exemption does not start again when you acquire it. The empty property must be occupied for at least six weeks before a further three- or six-month exemption can begin.
After the initial exemption, rates are payable in full unless any of the following conditions apply:
- The rateable value of the property is under £2,900
- The property is a Grade I or Grade II listed building
- The Valuation Office Agency removes the property from the rating list
- Occupation of the property is prohibited by law
- Action is taken by the Crown or any local or public authority to prohibit occupation of the property or to acquire it
- The person entitled to possession of the property is acting in their capacity as a personal representative of a deceased person; or as a liquidator, an administrator or as a trustee under a deed of arrangement or is subject of bankruptcy proceedings (up to the date the property is sold or the lease is disclaimed by the Official Receiver or the insolvency practitioner).
Properties owned by charities and community amateur sports clubs are not liable to empty property rates if the property’s next use is likely to be wholly or mainly for charitable purposes or for the purposes of a sports club.
Section 44a relief (partly occupied properties)
Generally the full rate applies but where a property is partly occupied for a short time, we have discretion in certain cases (for example, a phased move from one property to another) to award relief in respect of the unoccupied part by apportioning (effectively splitting) the rateable value between the occupied and unoccupied parts of the property. To qualify for this reduction, both the occupied and unoccupied parts must be in the possession of the same person or company. You can view the policy at the bottom of this page.
To apply for this relief, please complete and return 'Section 44a relief - application form (partly occupied properties)' (link at the bottom of this page). On receipt of your completed application, one of our officers will visit and inspect your property. If you qualify for the relief, we will request a certificate from the Valuation Office Agency to confirm the temporary split.
After the initial 3-month exemption period (or 6 for a qualifying industrial property), the apportionment will cease and the full occupied rate will apply to the whole property.
Charities and community amateur sports clubs (CASC)
Charities and registered community amateur sports clubs can apply for charitable relief, which can reduce the bill by 80 per cent.
The property must be occupied by the charity or the club and wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the club (or of that and other clubs).
To apply for these reliefs you generally need to be registered either as a charity on the Charity Commission website or as a CASC on the HMRC website. Links to both sites can be found at the top of the page. You can apply by completing and returning the application form 'Rate relief for charities – application form’ at the bottom of this page. For charity shops you must also complete the ‘Rate relief for charity shops –application form’ at the bottom of this page.
Other non-profit organisations
Discretionary relief can be granted for up to 100 per cent of the rates charged to certain non-profit making bodies. To be eligible, the organisation must be a non-profit making body and the property used for charitable, philanthropic or religious purposes, or concerned with education, social welfare, science, literature or the fine arts, or used wholly or mainly for recreation by a not-for-profit club or society (i.e. objectives which are broadly charitable).
Charities and community amateur sports clubs can also apply for this relief as a top up to the 80 per cent reduction (see above).
To apply, you need to download, complete and return the ‘Rate relief for charities – application form’ at the bottom of this page.
Any business suffering hardship can apply for help with their rate charge. Any reduction in your rates bill is discretionary and must be in the council tax payers’ interest. We review applications on an individual basis and consider such things as:
- The effect of unemployment and its impact on the community;
- Loss of service provided to the tax payer;
- Level of hardship and the steps the business has taken to improve its situation;
- Details of the business accounts over several years.
The 'Limited company relief application form' and the 'Sole trader/partnership relief application form' can be found at the bottom of this page.