Business rates for small businesses
Small businesses should be on the look out for a Business Rates Notice from their local Valuation Office in the next month. This notice will state the new Rateable Value which will apply to their property from 1 April 2005.
For the first time, this Notice will be accompanied by a break-down of the Valuation and an invitation to contact the Valuation Officer with any query about the rateable value.
Chas Roy-Chowdhury, Head of Taxation at the Association of Chartered Certified Accountants (ACCA), said: "Failure to check these Notices and make the necessary challenges could have major cost implications for businesses. If, however, they act as soon as they receive a Notice hopefully any mistakes in the new rating assessments can be corrected before an incorrect rates demand is issued by the local Council.
"At present, less than half of all rating assessments are actually challenged and only a tiny amount of bills are properly queried by businesses. As this assessment will remain in place for five years, it is important to examine the basis of any calculation."
Small Business Rate Relief
In addition, a Small Business Rate Relief scheme will come into effect in England on 1 April 2005. Relief will be available if the ratepayer occupies only one property. Properties with a rateable value below £5,000 will receive a relief of 50 per cent, reducing on a straight-line basis to zero per cent at a rateable value of £10,000.
Chas Roy-Chowdhury added: "Whilst it is pleasing that small businesses are being favoured, the benefit to most small companies will be very modest. For example, a company operating from one property with a rateable value of £9,500 would only receive a saving of £3.82.
"However, a small business operating from two premises that have a combined rateable value of £9,500 will not only find itself ineligible for the relief but also have to pay a 1.6 per cent surcharge - the percentage increase to the Uniform Business Rate which is applicable to all businesses that are not eligible for rates relief."
According to ACCA, there is some good news for sole property occupiers whose assessments are between £10,000 and £15,000. A buffer zone will be created and businesses can apply to their Local Authority for each year. Successful applicants will be made exempt from having to pay the surcharge.
mybusinessrates.gov.uk is a new web-based initiative designed to bring together information the ratepayer might want or need to know about business rates. The one-stop information service is aimed primarily at the smaller, independent ratepayer. It provides information on key topic areas associated with business rates, including how the system works, how the rateable value is assessed and how rates bills are calculated. It also provides legislative information, such as advice on eligibility for rate relief.