Rate reliefs

During the Autumn Statement the Chancellor announced that the 2023 Supporting Small Business (SSBR 2023) scheme will cap bill increases at £600 per year for any business losing eligibility for some or all Small Business Rate Relief or Rural Rate Relief at the 2023 revaluation.

The Supporting Small Businesses relief (SSBR) was first introduced at the 2017 revaluation to support ratepayers facing bill increases greater than the Transitional Relief caps due to loss of Small Business Rate Relief or Rural Rate Relief.

SSBR 2023 will ensure that the increase in the bills of these ratepayers is limited to a cash value of £600 per year for the years 2023/24 to 2025/26. This ensures that ratepayers do not face large bill increases in 2023/24 after transitional relief and small business rate relief (as applicable) have been applied. In order to simplify the scheme, the SSBR 2023 will not include minimum percentage bill increases (unlike the 2017 scheme).

• Those on the SSBR whose 2023 rateable values are £51,000 or more will not be liable to pay the supplement (1.3p) to fund small business rate relief while they are eligible for the SSBR 2023 relief scheme.
• Relief will automatically be applied each year that the business is eligible to receive it; this could be every year or could end sooner if the bill amount without the relief is reached.
• There is no second property test for eligibility for the SSBR 2023 scheme. However, those ratepayers who during 2022/23 lost entitlement to Small Business Rate Relief (because they failed the second property test) but have, under the rules for Small Business Rate Relief, been given a 12 month period of grace before their relief ended - can continue on the SSBR 2023 scheme for the remainder of their 12 month period of grace.
• Ratepayers remain in the SSBR 2023 scheme for either 3 years or until they reach the bill they would have paid without the scheme.
• As with all reliefs, the amount of relief awarded under the SSBR 2023 scheme will be recalculated in the event of a change of circumstances such as a change to the rateable value.
• A change of ratepayers will not affect eligibility for the SSBR 2023 scheme but eligibility will be lost if the property falls vacant or becomes occupied by a charity or community amateur club.

Example of how it affects your bill

If eligible for the SSBR 2023 scheme an example (for demonstration purposes only) of how it would affect your bill is below:

A ratepayer eligible for Small Business Rate Relief whose rateable value has increased from £3,000 (paying £0 in 2022/23) to £14,000 would be paying the following in 2023/24 before SSBR 2023:

Bill before relief: £6,986

Bill after transitional relief: £1,572

Bill after Small Business Rate Relief (at a 1/3): £1,048

After SSBR 2023 the bill for 2023/24 would be reduced to £600. 

2017 Supporting small business relief scheme

The 2017 SSBR scheme was provided to support small and medium ratepayers who had seen large increases in their bills at the 2017 revaluation. They have, therefore, had 6 years of support to allow them to adjust to their full 2017 bills. Therefore, for those ratepayers receiving 2017 SSB relief in 2022/23, any eligibility for 2023 SSBR will end on 31 March 2024.

Subsidy control

The extension of transitional relief and Supporting Small Business (SSB) relief scheme is likely to amount to subsidy. Any relief provided by Local Authorities under this scheme will need to comply with the UK’s domestic and international subsidy control obligations.

To the extent that a local authority is seeking to provide relief that falls below the Minimal Financial Assistance (MFA) thresholds, the Subsidy Control Act allows an economic actor (e.g. a holding company and its subsidiaries) to receive up to £315,000 in a three-year period (consisting of the 2023/24 year and the two previous financial years). MFA subsidies cumulate with each other and with other subsidies that fall within the category of ‘Minimal or SPEI financial assistance’. BEIS COVID-19 business grants and any other subsidies claimed under the Small Amounts of Financial Assistance limit of the Trade and Cooperation Agreement should be counted under the £315,000 allowance.

In those cases where it is clear to the local authority that the ratepayer is likely to breach the Small Amounts of Financial Assistance Allowance then the authority should automatically withhold the relief.