Business Rates – confused?

Business Rates – confused?

9:18 AM, 16th July 2021, About 2 weeks ago 13

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I have two properties owned jointly, no tenants in either. The Rateable value of one is £2,435, the other £1,650. They are both shops in listed buildings (residential flats above).

Are both exempt from business rates even if empty or tenanted, as both under £12kRV? I thought anything under £12k RV was exempt anyway BUT does this apply if you own the two properties?

OR is one liable for Small Business relief and the other not because of joint ownership? (even if one property is still under £15k RV and one is below the £2,900 level? two property SBR rule?)

Does it make any difference at all if they are owned by joint owners given the above, or are they both excluded from rates anyway as they are both under £2,900RV and nothing payable until they are occupied?

For purposes of Business rates, is there a difference between ‘unoccupied’ and ‘vacant/empty/void’?

Many thanks

DSR

Editor’s Note:

From HMRC >> https://www.gov.uk/apply-for-business-rate-relief/small-business-rate-relief

Small business rate relief

You can get small business rate relief if:

  • your property’s rateable value is less than £15,000
  • your business only uses one property – you may still be able to get relief if you use more

Contact your local council to apply for small business rate relief.

What you get

You will not pay business rates on a property with a rateable value of £12,000 or less.

For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.

Examples

If your rateable value is £13,500, you’ll get 50% off your bill. If your rateable value is £14,000, you’ll get 33% off.

If you use more than one property

When you get a second property, you’ll keep getting any existing relief on your main property for 12 months.

You can still get small business rate relief on your main property after this if both the following apply:

  • none of your other properties have a rateable value above £2,899
  • the total rateable value of all your properties is less than £20,000 (£28,000 in London)

You’re a small business but do not qualify for small business rate relief

If your property in England has a rateable value below £51,000, your bill will be calculated using the small business multiplier, which is lower than the standard one. This is the case even if you do not get small business rate relief.

The small business multiplier is 49.1p and the standard multiplier is 50.4p from 1 April 2019 to 31 March 2020. The multipliers may be different in the City of London.

Empty properties

You do not have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates.

Some properties can get extended empty property relief:

  • industrial premises (for example warehouses) are exempt for a further 3 months
  • listed buildings – until they’re reoccupied
  • buildings with a rateable value under £2,900 – until they’re reoccupied
  • properties owned by charities – only if the property’s next use will be mostly for charitable purposes
  • community amateur sports clubs buildings – only if the next use will be mostly as a sports club


Comments

by Neil Patterson

9:20 AM, 16th July 2021, About 2 weeks ago

Hi DSR,
I have added notes above in the article from HMRC and you may wish to follow the links.

by DSR

10:12 AM, 16th July 2021, About 2 weeks ago

Reply to the comment left by Neil Patterson at 16/07/2021 - 09:20
Thanks for this Neil but the confusion has arisen as both properties are owned by the same joint owners. I thought SBR relief is applicable only to the first property and then the second is therefore liable? Is this the case though if the second property is clearly under the RV level to start with itself?
Both are currently empty, but as they are both listed and again under the RV level of £12K anyway, surely there wont be any BR to apply???
All very confusing.

by Doug Ellison

6:40 AM, 17th July 2021, About 2 weeks ago

As both properties are listed there are no rates to pay when they’re vacant.
In any event there would be no rates payeable anyway as they’re both below the threshold.

by NEIL T

13:16 PM, 17th July 2021, About 2 weeks ago

Reply to the comment left by Doug Ellison at 17/07/2021 - 06:40
It would be useful to know if, for example, both properties were non-listed and above the threshold. Would empty rates be claimable by the Landlord on both. I have a number of industrial properties in blocks and this question concerns me should two or more become empty at the same time?

by Doug Ellison

6:33 AM, 18th July 2021, About 2 weeks ago

You would get 3 months free and then business rates would be payeable on both if they remain empty.
If you can find a way to use one of them and it’s below the threshold you would be entitled to Small business relief on this one.

by DSR

12:31 PM, 19th July 2021, About 2 weeks ago

Reply to the comment left by Doug Ellison at 18/07/2021 - 06:33
The thing is they are both below the threshold so surely BR not applicable on either anyway?

Is the ownership irrelevant?

If I get exemption on the (biggest RV one £2,435) the other there the RV is only £1,650, this should also exempt anyway occupied or unoccupied??

by Puzzler

13:09 PM, 23rd July 2021, About A week ago

You can only get one exemption

by DSR

14:52 PM, 26th July 2021, About 7 days ago

Reply to the comment left by Puzzler at 23/07/2021 - 13:09
So the highest RV one I can apply for exemption on, the other is also exempt as a result of being

a listed building – until they’re reoccupied
and a buildings with a rateable value under £2,900 – until they’re reoccupied

Is that your understanding?

by Doug Ellison

15:00 PM, 26th July 2021, About 7 days ago

You only get 3 months exemption on the large one,after that you would have to be using it to claim small business relief.

by DSR

16:32 PM, 26th July 2021, About 6 days ago

Reply to the comment left by Doug Ellison at 26/07/2021 - 15:00
Thanks - ok I think I understand this, but looks like SBR will be 100% relief though anyway after this three months as this property RV is only £2,435, and a listed property.

Just a case of filling an exemption form in then?

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