Small business owners may be missing out on a Government discount on business rates that came into effect on 1st April 2019, advises Lee Halmshaw, director at Avison Young, Bristol.
The retail discount of 1/3 off the rate liability in both 2019/20 and 2020/21 was introduced by the Government to help ease the pressure on English high streets and is available for businesses with rateable values of under £51,000.
And whilst local authorities have been encouraged to alert ratepayers to the discount, Lee believes that because the opportunity applies to a broad range of customer-facing businesses, not just traditional high street retail, there are some business owners who may not realise they are eligible and are missing out.
Rating specialist Lee Halmshaw says, “The Ministry of Housing, Communities and Local Government introduced the retail discount to help reinvigorate the high street, and it has been widely welcomed. The Ministry has issued guidance that includes a comprehensive list of business types that qualify, such as those that sell goods as well as provide services from their premises.
“Typically, these include restaurants and cafés, pubs and bars, as well as retail shops, hair and beauty services.”
Yet Lee believes there are still businesses who may not realise they meet the criteria to apply, and even if their rateable value falls over £51,000, a reduction may still be possible.
He says, “By seeking professional advice, property owners whose rateable value is just over the stated band may find that with a rates review, achieving a small reduction in rateable value could lead to a significant reduction in rate liability.”
Adding, “The qualifying list includes retail uses that we believe may have been overlooked by those who could really benefit. The test for ratepayers to consider is whether their property is used wholly or mainly for retailing goods to visiting members of the public?”
Those businesses with rateable values of under £51,000 are able to apply, even if they are already receiving other rates relief.
A typical discount could see a reduction of £6,547 for an occupied shop with a rateable value of £40,000.
Unfortunately there are some services that are not covered in the Government’s retail discount, such as financial services, estates agents or dentists, so Avison Young advises to fully check the list, which is outlined below.
The full list of qualifying businesses with a rateable value of less than £51,000, as stated in the Guidance issued in November 2018 by Ministry of Housing, Communities and Local Government on Business Rates Retail Discount:
i. Hereditaments that are being used for the sale of goods to visiting members of the public:
− 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/hire)
ii. Hereditaments that are being used for the provision of the following services to visiting members of the public:
− Hair and beauty services (such as: hairdressers, nail bars, beauty salons, tanning shops)
− Shoe repairs/ key cutting
− Travel agents
− Ticket offices e.g. for theatre
− Dry cleaners
− PC/ TV/ domestic appliance repair
− Funeral directors
− Photo processing
− Tool hire
− Car hire
iii. Hereditaments that are being used for the sale of food and/ or drink to visiting members of the public:
− Sandwich shops
− Coffee shops