How to Make the Most of the Small Business Rate Relief for Your Limited Company

/Published:10th December 2025/inBusiness, Limited Company, Running a business
Accounting Wise - making the most of the small business rate relief for your limited company

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If your limited company operates from a physical property, you’ll usually pay business rates – the commercial equivalent of council tax. For many small businesses, this can be one of the largest overheads after rent and utilities.

The good news? A significant number of UK companies are eligible for Small Business Rate Relief (SBRR), a government scheme designed to reduce and in many cases completely remove – the amount you pay.

In this post, we hope to break down how business rates work for limited companies, the exact rules for SBRR eligibility, and the practical steps you can take to maximise your relief. You’ll also find expert tips, examples, and links to authoritative government resources to help you stay compliant and avoid common pitfalls.

Useful Resources at a Glance

Expert Tips to Get More From SBRR

  • Check your Rateable Value regularly: Valuations are updated periodically, and errors happen. If your valuation is too high, you may be missing out on relief you’re entitled to.
  • Don’t assume your landlord handles it: Even if you rent, you are responsible for claiming SBRR, not the property owner.
  • Consider how multiple properties affect eligibility: If your company uses more than one premises, relief rules change – knowing the thresholds can save you thousands.
  • Apply early: Relief isn’t automatically applied in many council areas. A quick application can prevent unnecessary cash flow strain.
  • Use professional support if unsure: An accountant familiar with business rates can help you avoid mistakes and spot opportunities for relief.

Let’s get into the details so you can make confident, financially informed decisions for your company.

What Are Business Rates?

Business rates are a tax charged on most non-domestic properties in England, Wales, Scotland, and Northern Ireland. If your limited company occupies a physical space, whether you own it or rent it, you’ll usually be liable to pay them. These rates help fund local services, similar to how council tax works for residential properties.

Common types of premises that attract business rates include:

  • Shops, offices, and warehouses
  • Restaurants, pubs, cafés, and takeaways
  • Factories, industrial units, and workshops
  • Co-working spaces or serviced offices where your business has exclusive or designated use

Your bill is calculated using your property’s rateable value (RV) – an estimate of what the premises could be rented for on the open market. This value is set by the Valuation Office Agency (VOA) and is updated during national revaluations.

Why Rateable Value Matters

Your rateable value directly determines whether your limited company qualifies for Small Business Rate Relief (SBRR). If the VOA has set your RV higher than it should be, you could be missing out on significant savings.

Understanding how your business rates are calculated is the first step in making sure you’re not overpaying and ensuring you can take full advantage of any reliefs available.

What is Small Business Rate Relief (SBRR)?

Small Business Rate Relief (SBRR) is a government scheme designed to reduce the business rates burden for smaller enterprises operating from eligible properties. For many limited companies – especially those in retail, hospitality, trades, and professional services – SBRR can be the difference between manageable overheads and unsustainable running costs.

As of 2025, the rules are:

  • If your property has a rateable value (RV) of £12,000 or less, you’ll usually pay no business rates at all.
  • If your RV is between £12,001 and £15,000, you’ll receive tapered relief, meaning the amount you pay increases gradually until full rates apply above £15,000.

This makes SBRR one of the most valuable financial support mechanisms available to small companies with physical premises. Many businesses – particularly those in smaller units or rural locations – find that SBRR reduces their annual bill to zero.

How SBRR Works Behind the Scenes

The relief is applied to the business rates multiplier used to calculate your bill. Eligible businesses benefit from the small business multiplier, which is lower than the standard multiplier used for larger properties. Combined with zero or reduced liability, this creates significant long-term savings.

Useful Government Resources

Tip – Relief isn’t always applied automatically. Many councils require a simple application form – even if you’ve qualified for years. It’s worth checking with your local authority to ensure you’re receiving the full relief you’re entitled to.

Who Qualifies for Small Business Rate Relief?

Your limited company may qualify for Small Business Rate Relief (SBRR) if it meets the government’s criteria. The rules focus primarily on the rateable value of your property and whether your business occupies more than one premises.

In most cases, you’ll qualify if:

  • Your property has a rateable value (RV) below £15,000.
  • Your business occupies only one property (although some relief may still be available if you have additional premises with rateable values under £2,899 each).
  • Your company is based in England. (Scotland, Wales, and Northern Ireland operate their own business rate relief schemes with different thresholds and rules.)

Important Details Many Business Owners Miss

  • If you expand into a second property, you’ll keep your existing SBRR on your main premises for 12 months – provided both properties meet the value limits.
  • Serviced or co-working offices may still qualify if your business has exclusive use of part of the building (the VOA assigns rateable values to individual units where appropriate).
  • Empty properties do not automatically qualify – different reliefs apply for vacant commercial premises.

Check Your Eligibility

Understanding whether your company qualifies is the first step to ensuring you’re not paying more than you need to and thousands of small businesses miss out each year simply because they haven’t checked.

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How to Claim Small Business Rate Relief

Claiming Small Business Rate Relief (SBRR) is usually straightforward, but many limited companies miss out simply because they assume it’s applied automatically. In most areas of England, you must submit an application to your local council.

  1. Check your property’s rateable value
    Use the VOA’s online service to confirm your property’s current RV. If it seems inaccurate, you can request a correction or make a formal challenge.
    Check your rateable value
  2. Apply through your local council
    Each council runs its own application process. Some allow online applications, while others require downloadable forms. SBRR is not applied automatically in most cases, even if you clearly qualify.
    Find your council’s SBRR application page
  3. Provide supporting documentation
    Common documents include:

    • Your Companies House registration number
    • Your property lease, rental agreement, or licence to occupy
    • Evidence of exclusive occupation (if in a shared or serviced building)
    • Your business rates account number (if you already have one)

    Councils may request additional evidence depending on your circumstances.

  4. Reapply if your circumstances change
    You must inform your council and reapply if:

    • You move to new premises
    • You begin using an additional property
    • Your property is subdivided or combined with another unit
    • You take on or lose exclusive occupation within a shared building

    Failure to update your council can result in backdated charges or loss of relief.

Tip – Apply as Early as Possible – SBRR can sometimes be backdated, but this depends on council rules and your property history. Applying early ensures you don’t miss out on a year’s worth of savings.

Benefits of Small Business Rate Relief

Small Business Rate Relief (SBRR) isn’t just a tax reduction, it’s a strategic financial advantage that can give limited companies more stability and flexibility. Whether you’re running a retail unit, workshop, office, or studio, the savings can be significant.

  • Lower overheads
    Reducing or eliminating your business rates bill can free up thousands of pounds each year. This cash can be reinvested into stock, marketing, equipment, or hiring – accelerating your company’s growth without adding financial pressure.
  • More competitive pricing
    Lower fixed costs mean you can improve your margins or maintain sharper pricing in competitive markets. For service-based businesses, it can also strengthen profitability without raising fees.
  • Improved financial stability
    Business rates are a predictable but often heavy overhead. Relief can make your premises more affordable during quieter trading periods, seasonal downturns, or periods of economic uncertainty.
  • Support for long-term planning
    Knowing that rates are reduced or zero gives you clearer financial forecasts, making it easier to budget, scale, and commit to leases with confidence.
  • Encourages investment in physical spaces
    SBRR helps small companies sustain a presence on high streets, in industrial estates, and in local communities by reducing the cost barrier associated with commercial property.

For many small limited companies, SBRR can transform a premises from a financial burden into a viable long-term asset that supports growth.

Common Mistakes to Avoid

Even businesses that qualify for Small Business Rate Relief often miss out due to simple oversights. Avoiding these common mistakes ensures you receive the full savings you’re entitled to.

  • Assuming relief is automatic
    Many councils require an application before SBRR is applied. Relying on automatic assessment can leave you paying full rates unnecessarily, sometimes for years.
  • Forgetting to reapply after moving premises
    Relief does not follow you automatically. If you relocate, even within the same local authority, you must submit a fresh application or risk losing your entitlement.
  • Not checking your VOA valuation
    Rateable values are not always accurate. If your property is overvalued, you could be paying far more than necessary and may fall outside SBRR thresholds. A simple check and challenge if needed can save thousands. Check and challenge your valuation
  • Ignoring regional differences
    SBRR rules vary across England, Scotland, Wales, and Northern Ireland. If your business operates across borders, or you’re researching online guidance, make sure you’re following the rules specific to your location.
  • Failing to report changes in occupation
    If you sublet part of your premises, stop using a space, or take on additional units, your entitlement can change. Not reporting this promptly may result in backdated charges or loss of relief.

By keeping on top of these points, your limited company can avoid compliance issues and ensure it receives the full financial benefit of SBRR.

Example: Small Business Rate Relief in Action

To understand the impact of Small Business Rate Relief (SBRR), here’s a simple real-world example based on common 2025 figures:

  • Rateable value of premises: £10,000
  • Estimated business rates without relief: around £4,800 per year (based on the small business multiplier)
  • With SBRR: £0 to pay

Because the rateable value is under £12,000, the business qualifies for 100% relief, reducing the annual bill to zero.

That’s a saving of nearly five thousand pounds every year – money that can be reinvested into:

  • Marketing and customer acquisition
  • Hiring staff or increasing contractor capacity
  • New equipment or technology upgrades
  • Improving cash flow and financial resilience

For many small limited companies, SBRR doesn’t just reduce costs – it frees up the budget needed to grow sustainably.

Conclusion

For many SMEs, small business rates for limited companies represent a significant part of their annual overheads. By understanding how the system works and applying for Small Business Rate Relief (SBRR) you can unlock meaningful savings that directly support your company’s growth.

Whether you operate from a shop, workshop, office, or studio, reviewing your eligibility for SBRR is one of the simplest and most impactful financial decisions you can make. A few minutes spent checking your rateable value and submitting an application could reduce your business rates bill to zero.

With rising costs across the board, no small business should overlook reliefs designed specifically to support them.

Talk to Accounting Wise today to discover how much you could save and unlock smarter ways to reduce your business costs.

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Small Business Rate Relief FAQ

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Businesses in England with a rateable value below £15,000, typically occupying only one property, may be eligible.

No. Most councils require you to submit an application before relief is granted.

You can look it up using the Valuation Office Agency (VOA) service on GOV.UK.

You may keep relief on your main property for 12 months if your second property has a rateable value under £2,899.

You must reapply for SBRR with your new local council. Relief does not transfer automatically.

Sometimes this depends on your local council’s policy and when you became eligible.

Yes, if your business has exclusive use of a specific space. Shared desks or hot-desking rarely qualify.

You can challenge the valuation through the VOA. A reduced value may increase your eligibility for relief.

No. Scotland, Wales, and Northern Ireland each operate their own business rate relief schemes.

A quick daily check keeps records accurate. A weekly review helps you refine estimates, track utilisation, and spot overruns. Monthly reviews let you analyse client profitability and adjust pricing.

If your rateable value is under £12,000, you could pay no business rates at all saving thousands each year.

Glossary of Key Small Business Rate Relief Terms

Rateable Value (RV) – The estimated annual rental value of your commercial property, set by the Valuation Office Agency (VOA). This figure determines your business rates bill and SBRR eligibility. 
Valuation Office Agency (VOA) – The government body responsible for assigning rateable values to non-domestic properties. Their valuation directly affects how much you pay in business rates. 
Business Rates Multiplier – A pence-per-pound figure used to calculate business rates. Small businesses usually benefit from the lower small business multiplier. 
Small Business Rate Relief (SBRR) – A government scheme that reduces or eliminates business rates for properties with a rateable value below £15,000. Properties under £12,000 typically receive 100% relief. 
Tapered Relief – A gradual reduction in relief for properties with rateable values between £12,001 and £15,000. The closer the RV is to £15,000, the lower the relief. 
Local Authority Billing – The process through which your local council issues business rates bills and manages SBRR applications. Each council has its own application process. 
Exclusive Occupation – When your business has sole use of a specific unit or workspace. This determines whether your space receives its own rateable value, especially in co-working or serviced offices. 
Second Property Rule – A rule allowing businesses to retain SBRR on their main property for 12 months after acquiring an additional property, provided the second property has a rateable value under £2,899. 
Revaluation – A periodic reassessment of property values by the VOA. Revaluations can increase or decrease your eligibility for SBRR depending on market conditions. 
Check, Challenge, Appeal (CCA) – The official process for disputing an incorrect rateable value. Businesses can check their details, provide evidence, and appeal unfair valuations. 
Empty Property Relief – A separate relief for unoccupied commercial premises, usually applied for up to three months. It does not replace SBRR but may apply when premises are temporarily empty. 
Retail, Hospitality & Leisure Relief – Additional reliefs available to eligible sectors. These reliefs operate separately from SBRR and depend on annual government guidelines. 
Transitional Relief – A mechanism that limits large increases in business rates after a revaluation, helping to smooth sudden cost rises. 
Supplementary Charges – Additional levies such as Business Improvement District (BID) charges. These are separate from business rates and not covered by SBRR. 
Business Rates Account Number – A unique reference issued by your local council used to manage payments, relief applications, and correspondence regarding your business rates.
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