For landlords who own or manage properties, one of the major expenses that they have to contend with is business rates. Business rates are a tax on non-residential properties in the UK, including commercial properties like offices, shops, warehouses, and other business premises. Landlords are responsible for paying business rates on their properties, and these rates can add up to a significant amount each year.
However, there are ways for landlords to reduce their business rates liability and potentially qualify for business rates relief. This can help landlords save money and increase their profitability. In this article, we will explore the various options available to landlords for business rates relief and provide tips on how to maximize this relief.
One of the most common forms of business rates relief for landlords is Small Business Rate Relief (SBRR). SBRR is a government scheme that offers discounts on business rates for small businesses with a rateable value below a certain threshold. In England, the threshold is set at £15,000, while in Wales and Scotland, it is £12,000.
Landlords who have properties that qualify as small businesses can apply for SBRR and potentially receive a discount on their business rates. This can be a significant saving for landlords, especially if they own multiple small properties that qualify for the relief.
Another form of business rates relief that landlords can potentially qualify for is Rural Rate Relief. Rural Rate Relief is available to properties in designated rural areas, and it offers a 50% discount on business rates. Landlords who own properties in rural areas should check whether their properties qualify for this relief and apply for it if they do.
Empty Property Relief is another form of business rates relief that landlords can take advantage of. If a property is empty, landlords can apply for Empty Property Relief, which offers a 100% discount on business rates for the first three months that the property is empty. After the initial three months, the discount is reduced to 50% for properties that are industrial and 10% for other properties.
Additionally, landlords who own properties with a rateable value below £51,000 can apply for Expanded Retail Discount. This relief was introduced in response to the COVID-19 pandemic to support retail businesses, but it also applies to certain leisure and hospitality businesses. Landlords who have tenants in these sectors may be eligible for a 100% discount on their business rates for the 2021-2022 tax year.
To maximize business rates relief, landlords should regularly review their properties and assess whether they are eligible for any of these relief schemes. It is important to stay informed about changes to business rates relief and take advantage of any new opportunities that may arise.
In addition to these government schemes, landlords can also take steps to reduce their business rates liability through other means. For example, landlords can explore the possibility of appealing their rateable value if they believe it is incorrect. A lower rateable value will result in lower business rates, so it is worth investigating this option.
Furthermore, landlords can consider making improvements to their properties to increase their rateable value. This may sound counterintuitive, but in some cases, investing in upgrades and renovations can raise the value of a property and potentially increase rental income. It is important to weigh the costs and benefits of this approach before proceeding, but it can be a viable strategy for certain properties.
Overall, maximizing landlord business rates relief requires proactive management and a thorough understanding of the various relief schemes available. By staying informed, exploring all options, and taking steps to reduce their business rates liability, landlords can save money and improve the profitability of their properties. Business rates relief can make a significant difference to a landlord’s bottom line, so it is worth investing time and effort into exploring these opportunities.