St Edmundsbury Borough Council is committed to helping business survive in our local communities. Where closure of a business would harm the availability of services in an area we will try to help by using the Business Rates Hardship Relief Scheme.
The council has discretionary powers to reduce business rates in the following circumstances.
These are where:
- the business ratepayer is suffering financial hardship; and
- it is in the interests of St Edmundsbury's Council Tax payers to do so.
Where these criteria are fulfilled we will need to see financial accounts of your business in order to assess the amount of rates reduction which you qualify for. In some cases your business rates may be reduced to nil.
The council has a prescribed scheme which could aid certain small businesses. Applications from any other type of business will be considered so long as the criteria at 1 and 2 above are both fulfilled.
For more information visit: The Office of the Deputy Prime Minister - Rate relief guidance notes
Applications from limited companies will be assessed on the basis of the financial position of the company as a whole and take into account the company's ability to meet its rate liability.
Please contact rates staff on 01284 757221 or 757280 to discuss the scheme in more detail and supply an application form if necessary.
Outline of Hardship Relief Scheme
The council's prescribed scheme of hardship relief is based on the following:
- Obtain the annual net position from the most recent audited trading accounts.
- Adjust for notional level of pay rather than actual drawings. The scheme assumes a level of staffing of two for a shop.
- Deduct from that sum the rateable value of the premises up to a maximum of £10,000 or the actual rateable value of the premises, if lower (a proxy for the expected return on capital) to establish the adjusted net position.
- If the adjusted net position shows a notional deficit, then this becomes the amount of rate relief. The maximum relief granted will be no more than the actual rates for the year.
For example:
A business is open for 45 hours a week. Net profit after pay and drawings of £14,000 by the owners is £300. Rateable value is £2500 and rates payable comes to £1,122.50.
The notional pay is 2 x number of hours open per year x £5.73 per hour national minimum hourly rate.
| The calculation |
£
|
| Example net profit |
300
|
| Addback drawings/wages |
14,000
|
|
|
|
14,300
|
| Less notional pay |
23,634
|
|
|
|
(9,334)
|
| Less rateable value of premises (see note above) |
(2,500)
|
|
|
| Adjusted net profit (deficit) |
(11,834) |
The amount of relief granted would be the full amount of the rates in this example as there is a notional deficit. So rate relief becomes £1,122.50.
If the adjusted net position showed a profit no relief would be granted.
