An error by councils in England means retailers that have opened a second shop could be owed up to £6,000, according to chartered surveyors Bankier Sloan.
Under a change to small business rates relief in 2014, businesses should continue to receive the full relief on their first property for 12 months after opening a second premises.
However, cases handled by Ian B Sloan, founder of Bankier Sloan, revealed local businesses had wrongly had the relief cut on their first site when they acquired a second one.
Subsequent checks of local authority guidance suggest a “vast majority” of councils were failing to advise of the extra 12 months small business rates relief, resulting in overpayments of up to £6,000. Examples of councils making the guidance error include local authorities in Huntingdonshire and Torbay.
In further instances seen by Better Retailing, councils such as South Oxon wrongly removed the 12-month extension if the second property had a rateable value (RV) above a certain threshold, often £2,900, but sometimes £20,000 across the two premises.
Sloan explained: “This policy was supposed to encourage businesses, including convenience stores, to expand by taking on other sites. It’s important that shop owners that have taken on another site check what they have paid. If they had their small business rates relief removed on their first site instantly, it should only take a letter to their council for them to get the overpayment returned.”
The chartered surveyor said that while most councils have a policy of allowing claims backdated up six years, they should consider claims by retailers that have opened a second store at any point from 2014 onwards. The 12-month small business rates relief extension should also be given to any retailers that open a second premises in the immediate future.
Retailers can also minimise rates bills by operating sites as different limited businesses.
Checklist for whether you have overpaid on business rates due to opening a second site:
- You opened a second shop or other commercial premises in England since 2014
- The second premises was owned within the same company as the first premises
- The first premises received small business rates relief
- Small business rates relief were removed from your first premises when the second premises opened
Ian Sloan has offered to give Better Retailing readers affected by the errors described above free advice. Email email@example.com with the subject line ‘SBRR ERROR’. Include your store addresses and phone number. Or contact Bankier Sloan directly at firstname.lastname@example.org with the subject “BetterRetailing”