Rate relief is big boost for new small businesses

22/09/2010

THE government's new small business rate relief will provide a much needed boost for local start up companies, according to a Hull property agent.

Dale Gooderham, surveyor at Garness Jones, said he was optimistic that the introduction of the higher rate relief from October 1 would help drive young businesses forward by saving them money on their rent.

The coalition government announced in its budget that it would increase the level of Small Business Rate Relief (SBRR) so that eligible businesses will pay no rates on properties with rateable values up to £6,000.

There will then be graded relief from 100 per cent to 0 per cent for properties with rateable values of between £6,001 and £12,000.

This higher SBRR will run for 12 months until September 30, 2011.

Mr Gooderham claims that this change could offer new start up companies much greater incentives to move out of home and into their own dedicated workplace.

He said: "We're hoping that it will obviously stimulate more business start ups because you know the rates tend to be roughly 44 per cent of the rent that they are asked for.

"A lot of people already get some kind of relief but the rents are still one of the biggest costs for any new business.

"This will save them a significant amount of money."

High unemployment levels in Hull mean that there is strong potential for new ventures as people who have been made redundant look to self-employment as the solution.

But Mr Gooderham says that agents in Hull have seen a "sharp reduction" in start up business enquiries in the commercial property market since 2007.

This has had a knock on effect on the rest of the property market with fewer businesses moving up the ladder.

Mr Gooderham said: "I just hope it will give small businesses starting out in smaller units a foot hold.

"Then in a year or two we will hopefully be talking to the same people again about finding them somewhere a bit larger.

"Without this initial incentive it is very hard for businesses to move out of the home."

He hopes that the money saved through SBRR will be reinvested to develop the fledgling businesses.

Mr Gooderham said: "Hopefully it will give small business the opportunity to invest in other things.

"Even if it is just £20 or £30 per month to play with, perhaps they will be able buy in that piece of equipment that they have wanted for some time but was a bit out of their reach."

To qualify for the SBRR, businesses must apply to their local authority and confirm that the sole or main premises they occupy has a rateable value of less than £18,000 and if they occupy any additional buildings the total rateable value must be less than that figure.

From October, local authorities will need to adjust the business rates payable by all firms that meet the criteria for SBRR and that occupy properties within the rateable value thresholds set out in the revised scheme.

If amendments need to be made, they will issue revised bills

Link:

Garness Jones

www.garnessjones.co.uk