_Why changes in business rates matter

When you start your business, there are a number of things to consider, such as; what equipment you need, the number of employees to hire etc. One of the most important things however, is whether you can afford to keep up with the rent in the area you want to be based in. 

Whether you own a shop, restaurant or office; crippling business rates can force you to close your doors.

Despite government measures to help small businesses and the pledges from the Chancellor in his 2018 autumn budget to ease the burden of business rates, it’s still a hotly-debated subject for many companies. Surprisingly, it's not just small businesses that are feeling the pinch.

In May, the BBC reported that 200 Boots stores were at risk from closure due to the increase in online shopping and higher business rates. 

According to a report by the Retail Gazette in May, Tesco chief executive Dave Lewis called upon the government to implement an online sales tax to help companies fund soaring business rates. 

In the UK, businesses are charged a tax on the right to occupy commercial property. It usually equals to approximately 50% of the annual rent, which can have a huge impact on profits.

What can be done to lessen the impact? Keeping up with any changes to business rates is essential for any company and perhaps our latest guide will offer some relief.

Our latest guide

In an effort to make it more manageable, Knight Frank has launched the Business Rates, Facts and Figures Guide 2019-2020, which provides ratepayers a breakdown of what the numbers mean in order to accurately calculate their rate charges. 

To get the most out of this guide, ratepayers should use their Rateable Value (RV) to check their entitlement to any reliefs or exemptions.

The key points

Below are some noteworthy points in this year's guide:

England

• Introduction of Retail Discount Scheme – a discount of around 33% of the ‘Net Business Rate Charge’ for eligible retail businesses with a rateable value of less than 51,000, for two years from April 2019
• The Chancellor's reversal of the ‘staircase tax’, which cost many businesses their rates relief, finally came into force in November. Businesses need to apply before January next year if they want to secure any refunds of the tax charged for rate years prior to 2017. 

Scotland

• There's a new 100% relief from business rates for ten years for any new ‘Fibre Broadband Infrastructure’
• There's also an extension of 'The New and Improved Property Relief' scheme for the 2019-20 year

Wales 

• Small Business Rates Relief – 100% relief to all registered childcare providers for a period of three years from 1st April 2019
• The High Street Rates Relief Scheme for retail premises with a RV under £50,000 has been extended for the 2019-20 period

Find out more about our business rates advisory services.