Small business rates relief

Paul52

I rent a small industrial unit and receive small business rates relief (SBRR) we are expanding and I am thinking about taking on the vacant unit next door I will still be under the SBRR threshold with both unit however becouse it is another unit I will no longer be elagable for SBRR.
My landlord is happy for me to knock a door way through to the 2nd unit by doing this will it then be classes as 1 unit for rates purposes, so that I can still claim SBRR ?. Any help out there! Thanks in advance for reading my post Paul

Savvy_Sue

I'd be surprised, but I believe it's the local valuation office who makes final decisions on this, so I'd start by asking the local council and then moving on to the VO. If they are listed as separate units then I can see no good reason for them being liable for business rates as a single unit.

My surprise would be based on "then everyone would do that (if they could) when they wanted to expand", plus also a guess that each of the original units would still be technically 'stand-alone' - toilet facilities if nothing else.

Tom99

Its worth ringing the VO, it must happen all the time. The guidance is:

"To ensure a property is correctly rated, it is important to know how many parts of the property need to be separately rated (or how many ‘hereditaments’ there are). If the property has only one occupier and all parts are directly accessible from each other, this will be a single hereditament."

You would seem to meet that since there will be no common areas.

https://www.gov.uk/guidance/how-non-domestic-property-including-plant-and-machinery-is-valued#single-and-multiple-hereditaments

Minoro

All things being equal, the sum total of Rateable Value for two units merged into one is slightly less than the two individual valuations, thanks to the economies for scale in rental values.
Have a look at the Valuation for the Unit next door atvoa.gov.uk. Does the total Rateable Value of yours and next door's still come in at under £12,000 for 100% SBRR Relief? (I'm assuming you're in England - Wales is a bit different). Or under £15,000 for tapered SBRR relief? You can probably take 10% off for the result of a merge - but every property is different so please don't take that as an absolute!
The alternative is to consider whether you are effectively running more than one business from your property. A sales business and a service business for instance, or two separate product lines. If so you could lease the second unit in another company name or legal entity and each would be entitled to full SBRR (from what I understand from your question). I wouldn't overtly condone actively using this approach just to avoid rates, but for many businesses it has proven a genuine trading situation and used effectively to mitigate rates liability.