The Small Business Rate Relief (SBRR) was due to end on 30thSeptember 2011, however the Chancellor of the Exchequer, George Osborne announced the relief will now continue for another year until 30th September 2012.
This announcement is excellent news for small commercial businesses as it allows business owners to claim back up to half of the rentable value of the commercial property. The rentable value is the amount the property would be let for if it was on the market at that time and is used by councils to calculate businesses rates.
Small businesses are eligible for this help if they rent just one property and their rentable value is below £18,000 (£25,500 in London). However, if more than one commercial business property is used, the relief is only available if the rentable value of each of the other properties is below £2,600. If this is the case, a claim can still be made as the relief is applied to the main property.
Many small businesses are not aware that they could claim, as only 41 per cent that are eligible actually claim it back. It is unclear why 59 per cent of small businesses do not claim what they are entitled to as all they have to do is fill out a Rate Relief claim form, which are available from local councils. Paul Durrance, a partner at Mitchell Charlesworth Charted Accountants expressed, “SBRR is a terrific tax break for recession stricken small firms,” but with so many not claiming the money they are entitled to, they are missing out which could potentially jeopardise their business if they hit hard financial times.
The extension of this business rate holiday is costing taxpayer’s a total of £370 million for the extra year, but with more than £400 million in Small Business Rate Relief being unclaimed, the scheme will pretty much pay for itself.
