As some of you will know after 10 years of working for the same firm and 2 changes of owner my brother took the brave step of setting up his own motorcycle repairs / spares / MoT garage in January of this year. Having never worked for himself before he turned to me for advice when setting up Full Throttle Motorcycles; and I pointed him in the direction of my accountant and the solicitors I use for specialist advice.
He’s doing really well and hopefully will become a VOSA approved MoT station in the next few weeks (the process for becoming one is unsurprisingly torturous)… I know this because I have been doing his book keeping for him every week – he doesn’t know how and has thankfully had too much work to do to learn. I’ve been using the really rather good web based accounting tool Clear Books for it, which presents critical information in a way which my brother can understand easily when I am not about!
Dealing with some parts of the government (local and national) have been long winded though and there is no way they can be described as efficient. Warwick District Council took an age to sort out planning permission, and finally got around to sending my brother a National Non Domestic Rates (essentially Council Tax for businesses) demand about a fortnight ago (he moved in on 19th Dec). However, they did include with it some information and a form for claiming Small Business Rates Relief.
The SBRR was introduced as part of the The Local Government Act 2003, although it apparently did not come in to force until the 2005 revaluation. As of the 2010 revaluation you received 50% off your tax if the rateable value of your property (how much rent it can generate) is less than £6,000 per year. If it is more than £6,000 p.a. but less than £12,000 the deduction reduces by 1% for every £120. So at £6,000 you get a 50% reduction; and at £12,000 you get £0.
You have to meet some eligibility criteria too, essentially that you only have one property (although there is an exemption if you have multiple small properties). The criteria and the £12,000 rent cap mean this measure is squarely aimed at small businesses – like my brothers. SBRR reduced my brothers rates by nearly 50%. Always nice.
It Gets Better.
Warwick District Council then duly issued a new demand with the reduced amount. I went in yesterday to do my brothers books to find a letter from The Department Of Communities & Local Government about the SBRR and the March 2010 budget. It turns out as a one off measure to help small business through the recession the Chancellor announced that from October 2010 to September 2011 the rate of reduction would increase to 100% for properties with a value of £6,000 or under. IE: FREE. My brother is very slightly over the £6,000 threshold, but essentially he will get almost entirely free rates for 1 year.
What a really sensible and targeted way to help small businesses – its puts about £200 a month back in my brothers pocket which he will undoubtedly spend in the economy elsewhere (there is talk of a new tyre balancer). The best bit though is that you don’t have to do anything to get the reduction. If you’re already claiming the SBRR it will increase automatically.
Its not often you get something for nothing, so I thought I would share it – especially as I read today when researching SBRR that according to Business Link some 48% of eligible businesses don’t claim it. If you are one, or know someone who is – make sure its being claimed!