If your business needs a physical location to run in the UK, then you are entitled to pay the business rates in the UK.
Whether you have an office, a shop front, a factory, a holiday let, or a cafe, you need to pay the business rates in the UK.
So, when starting a small business, it is essential to understand the business rates and if there is any business rates relief.
In the UK, if you pay the business rates, you may be eligible for small business rate relief.
However, the business rates differ from country to country in the United Kingdom. For each country, the rate of relief is different.
Well, if you are interested to know about small business rate relief in Wales then this article is for you.
Here, in this article, I will wrap together an understanding of the small business rates in Wales, the significance of small businesses in Wales, what is small business rate relief, the application process for small business rate relief, the benefits of small business rate relief, and small business rate relief calculator!
Let’s dive into the deep!
Understanding the Small business rates in Wales
Business rates are sometimes known as non-domestic rates. Business rates are one of the major funding sources of local government.
The business rates issue has been fully developed in Wales since 2015. there are almost 110,000 non-domestic properties in Wales liable for business rates.
A non-domestic property must pay the business rates. Business rates are the amount calculated by the following formula.
You need to take the rateable value of your property and multiply it by the at-present non-domestic rates multiplier.
The VOA (Valuation Office Agency) values properties and assigns the appropriate rateable value. If you think your RV is incorrect, you can appeal for it.
The rateable value is an estimation of how much the property can rent per year on the open market for a specific period. Then, it is multiplied by the rate multiplier.
Any relief on business rates that the property is eligible for then is subtracted from the actual business rates figure.
In Wales, the local authorities collect the business rates and then pay into a national pool, operated and administrated by the Welsh government.
Then the Welsh government distributes the fund to local authorities, Police, and crime commissioners as part of the annual local government settlement.
The Significance of Small Businesses in Wales
Wales is one of the major countries in the United Kingdom. The Welsh government always provides a support system to the micro-businesses and SMEs.
In Wales, most of the businesses are partly funded by the European Regional Development Fund through the Welsh government.
Here, I will provide the significance of small businesses in Wales:
- Wale’s smaller businesses also play a crucial role in supporting local communities and helping the Wales government to adapt and respond to challenges. Small businesses provide tax to the government, which is used by the Welsh government to solve various financial issues in the country.
- Small businesses make a larger contribution to the economic growth and employment in the country. Small businesses play a crucial role in the growth of the country’s economy. They are the backbone of Wale’s economy. Small businesses contribute to economic growth, job creation, and community development.
- These are the businesses that may have introduced some of the new products or services in the country. Small businesses offer most of the private sector job roles in Wales. Small businesses in Wales provide 47% of employment.
- Small business takes the courage to go it alone and start something new. Moreover, small business generates a source of income. Small businesses are part of what creates a community. Small businesses have a direct impact on their communities in Wales. Small businesses provide the goods and services to the customers that they need.
What is Small Business Rate Relief In Wales
There are mainly 3 types of small business rate reliefs in Wales, including:
1. Retail, Leisure, and Hospitality Rates Relief 2023-24
All the applications for small business rate relief should be made to the local authority.
In 2023-24, the Welsh government will provide 140m Pounds of targeted non-domestic rates to support small businesses in the retail, leisurely, and hospitality sectors.
Businesses will be qualified for 75% of their liability for the financial year.
The amount of relief for retail, leisurely, and hospitality sectors under the Welsh government will be capped at 110,000 Pounds per business across Wales.
It will depend on the local authority how they wish to administer the scheme to minimize the administrative burden of the ratepayers or maximize take-up.
Local authorities will be responsible for providing clear information to the ratepayers on the details and administration of the scheme.
2. Transitional Relief
From 1 April 2023, following the revaluation, the Welsh government is providing traditional relief to small businesses.
The government is providing the belief to all the business ratepayers whose liability has increased by more than 300 Pounds, as a consequence of revaluation.
You, as a business ratepayer, will pay 33% of your additional liability in the first year, 2023-24.
The ratepayers will pay 66% of their liability in the second year, 2024-25. The ratepayers need to clear all their liabilities before reaching their third year, 2025-26.
The Welsh government is providing 113 million Pounds to fund this relief over the two years. The government offers assistance and support to the business ratepayers through a consistent and straightforward transitional scheme.
3. Improvement Relief
From April 1, 2024, the Welsh government is providing improvement relief to the business ratepayers who are investing in their non-domestic properties.
This belief will delay the effect of a resulting rateable value increase on the non-domestic properties on rates liability for 12 months.
This ensures the business ratepayers and the small businesses realize the benefits of improvement of their non-domestic property before increasing the rateable value of that property.
What Types of Businesses Will Continue to Get Business Rate Relief
The Welsh government provides small business rate relief to qualified small businesses, including:
- Eligible business premises with a rateable value of up to 6,000 Pounds can receive 100% relief
- The business premises with a rateable value between 6,001 Pounds to 12,000 Pounds will receive business rate relief on a tapered basis from 100% to 0.
Some Other Small Businesses will continue to get Relief in Wales
1. Registered Childcare Premises
Registered childcare providers will get 100% business rate relief for up to 31 March 2025.
2. Post Offices
Post offices with a rateable value of up to 9,000 pounds will get a 100% business rate relief. The post offices with a rateable value between 9,001 to 12,000 Pounds will get 50% business rate relief.
3. Multiple Occupation Limit
If a ratepayer is liable for more than two properties on a single local non-domestic rating list, then he can get relief for a maximum of two such properties.
However, if conditions are applied, those properties meet only the rateable value criteria.
4. Charitable Rate Relief
If your property is occupied by a registered charity and is used for charitable purposes, you will be automatically qualified for 80% mandatory rate relief.
If your property is occupied by a non-profit making body then you can qualify for relief up to 100%. These non-profit making bodies include:
- Charitable
- Religious
- educational
- To do with social welfare
- to do with literature
- to do with recreation
- Scientific
5. Rate relief or Empty Properties
Empty business properties are exempted from paying the business rate for the following three months after becoming unoccupied.
After the exemption period is over, you will again be liable to pay the business rate. You must notify the local authority about the vacancy of your business premises.
Also, you must notify the body when the property will be re-occupied.
The Application Process of Small Business Rate Relief in Wales
If your small business meets all the above-mentioned criteria, the next step involves making an application through the local authority of your area in Wales. To apply, you can follow the below steps:
- You need to fill out the form carefully and if there is any query you can ask the authorities.
- Then you can hand it over to the board.
If you find delaying the approval of your small business rate relief, you can visit the local authority and ask them again.
The Benefits of Small Business Rates Relief in Wales
The benefits of small business rate relief in Wales are as follows:
- The business rate relief is aimed at small businesses and other ratepayers in the leisure, retail, and hospitality sectors in Wales. These sectors include pubs, shops, restaurants, gyms, hotels, and guest houses.
- The scheme is designed to provide support to eligible occupied properties for up to 75% discount on non-domestic properties. This small business rate relief will only apply to eligible businesses.
- However, every business can claim this business rate relief in Wales.
- The total amount of relief is 110,000 pounds across all properties occupied by the same business.
Small Business Rate Relief Calculator
To calculate the business rate relief, first, you need to calculate the business rate.
To calculate the business rate, you need to multiply the rateable value of your business with the multiplier set by the government.
The rateable value is the value given to a premises that is used for business purposes by the Valuation Office Agency. They give the rateable value based on the probable annual market rent.
This rateable value of a property is given every five years, and they consider the size and usage of the premises.
Multipliers are the number of pence per pound of the rateable value, which you need to pay before any relief or discount you receive.
Current Business Rates multiplier value:
| Year | Standard multiplier | Small Business Multiplier |
| 2023 to 24 | 51.2p | 49.9p |
| 2022 to 23 | 51.2p | 49.9p |
| 2021 to 22 | 51.2p | 49.9p |
| 2020 to 21 | 51.2p | 49.9p |
| 2019 to 20 | 50.4p | 49.1p |
It is worth knowing how to calculate your business rates yourself to sense that you are paying the right amount. Then you can follow the below steps to calculate your business rate relief.
- Step 1: You can search for your business property’s rateable value by pin code.
- Step 2: You need to find out the correct multiplier based on your business premises’ size and location.
- Step 3: Then, multiply your rateable value by the correct multiplier.
Then check your business rate falls under which small business rate relief categories. All the business rate relief types, I have already mentioned above, just check.
FAQ
What is The threshold for qualifying for small business rate relief in Wales?
Ans: Wales small businesses can apply for small business rate relief for 100% for the business premises with a rateable value of up to 6,000 pounds. Also, businesses with a rateable value between 6,001 to 12,000 pounds can taper for business premises similar to the English system.
How often can small businesses apply for business rate relief?
Ans: You are only required to apply for small business rate relief once. If the present circumstances do not change or alter, you are not required to apply further.
Can businesses appeal further or small business rate relief if the application gets rejected?
Ans: In circumstances when your small business rate relief application gets declined, you can appeal further for the decision to be reconsideration.
Conclusion
Well, if you have a small business in Wales, and wondering whether you are liable to pay the business rates then this guide is for you.
Here, I have enlisted every detail regarding to small business rate relief in Wales. You just go through this article and check whether you are eligible for business rate relief.
If not, there are some exemptions for business rate liabilities, you can check the list above. Also, if you have some more queries, you can consult a financial advisor to clear all your doubts!
