If you work from premises, rather than an office at home, you will be liable for business rates.
The Valuation Office (which comes under the remit of HMRC), is responsible for calculating the rateable value of your business premises. That valuation is then passed to your local council, who will calculate your business rates. Your rates are payable to the local council, not HMRC.
Currently the value is calculated based on the value of your property on 1 April 2008. However, with effect from 1 April 2017, this will change and the value will be based on the value as at 1 April 2015.
If you believe your rates calculation is incorrect, you can contact the Valuation Office and they will reassess it for you. There will be a number of questions for you to answer including:
- Your lease agreement details
- Any sub lettings
- Improvements or changes you have made to the property
- Your rent, and when it was fixed
- The details of your landlord, if you are a tenant
- Rent review periods, including any rent free periods
You will receive a letter from the Valuation Office with your revised value. It is your responsibility to ensure the details are correct, including the address and position – for example if you are on the ground floor, but it says first floor. Again, you must address any errors directly with the Valuation Office.
The Valuation Office will notify the local authority (your council) who will then write to you under separate cover advising you of how much your business rates will be.
Small business relief – can you claim it?
Your local council will not automatically deduct small business relief if you are entitled to it, so you need to let them know.
You can claim small business relief if:
- Your property has a rateable value of £6000 or below
- You only occupy one property; or
- The rateable value of any additional properties to your main property does not exceed £2599
- The value of your main property, or the combination of your main property and any additional properties does not exceed £17999
The government are currently offering additional relief for small businesses of up to 100% discount on rates, until 31 March 2017. This is calculated on a sliding scale if your property has a rateable value above £6000 and below £12000. Properties with a rateable value over £12000 are not entitled to small business relief.
It is likely to return to a 50% discount after March 2017, unless the Chancellor offers further incentives in the Autumn Statement.
There are additional discounts and relief if you are a charity, not for profit, or a retailer. You can find out more about that here: business rates relief
We would be happy to talk you through the implications in more detail, and support you with communication with the Valuation Office. Please contact us on 01256 406 601.