Does your business qualify for Business Rates Relief? Reply

A donut store, bakery, fish and chips store and a pet shop

You can get small business rate relief if:

  • you only use one property
  • your property’s rateable value is less than £12,000

What you get

You’ll get 100% relief (doubled from the usual rate of 50%) until 31 March 2017 for properties with a rateable value of £6,000 or less. This means you won’t pay business rates on properties with a rateable value of £6,000 or less.

The rate of relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.

You have more than one property

You can get small business rate relief if the rateable value of each of your other properties is less than £2,600.

The rateable values of the properties are added together and the relief applied to the main property.

You’ll keep getting any existing relief for one year when you get a second property.

You’re a small business but don’t qualify for relief

If your property has a rateable value below £18,000 (£25,500 in Greater London) you’re considered a small business.

Even if you don’t qualify for small business rate relief, your business rates will be calculated using the small business multiplier instead of the standard one. This is the case even if you have multiple occupied properties.

The multiplier shows the percentage (pence in the pound) of the rateable value that you pay in business rates. You can see a list of current multipliers on the Valuation Office Agency (VOA) website.

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

steve@bicknells.net

Don’t mix up your property investments with your main business Reply

Entrepreneur startup business model

There are lots of good reasons to keep property investments in their own companies rather than mix them up with your main business activity.

We have a blog explaining why residential investments should be in a company https://stevejbicknell.com/2015/08/24/5-reasons-why-you-need-a-property-investment-company/

Entrepreneurs Relief when you sell your business is one of the major reasons not to have property in your trading business as significant Non Trading Activity will be a problem, if a business contains investments and if these were more than 20% in terms of turnover, net assets, time spent by directors or profit it could mean that your business is not counted as a trading business.

What is Entrepreneurs Relief

Entrepreneurs Tax Relief applies if you sell or close your business and means that you only pay 10% Capital Gains Tax on any qualifying profits.

There’s no limit to how many times you can claim Entrepreneurs’ Relief, and you can claim up to £10 million of relief in total during your lifetime.

Companies

To claim Entrepreneurs’ Relief you must:

  • own at least 5% of the shares in the business for a year
  • be a director, partner or employee of the business

Sole traders

To claim Entrepreneurs’ Relief you must have been trading for at least a year.

Full details are on the HMRC Helpsheet HS275

steve@bicknells.net