What are business rates
Non-domestic rates or business rates are the way that those who occupy commercial (non-domestic) property contribute towards the cost of local services. They are administered and collected by local authorities.
Under the business rates retention arrangements introduced in April 2013, authorities keep a proportion of the business rates paid locally.
This provides a direct financial incentive for authorities to work with local businesses to create a favourable local environment for growth since authorities will benefit from growth in business rates revenues.
The money is used to help pay for the services provided by the council.
For more information about the business rates system see the GOV.UK website
Who has to pay?
In most circumstances occupiers of properties that are entered in the Valuation Office Agency’s (VOA) business rates lists must pay.
Business rates are charged on most commercial (non-domestic) properties such as shops, offices, pubs, warehouses, factories, holiday rental homes or guest houses.
If the property is empty there is still a charge in most cases, and the owner/leaseholder/freeholder must pay this.
How are business rates calculated?
The rateable value of your business premises is set by the Valuation Office Agency (VOA). This is based on their assessment of the open market rental value. The VOA provide a facility to check the rateable value of your property online.
The amount of business rates payable is calculated by multiplying the rateable value by the correct ‘multiplier’ (an amount set by the government) and then awarding any relevant reliefs & reductions.
The current multipliers are shown on the front of your bill.
Before the start of each financial year the government sets two multipliers for the whole of England; the standard rating multiplier and the small business multiplier.
Business rates instalments
Payment of business rate bills is automatically set on a 10-monthly cycle.
However, the government has put in place regulations that allow ratepayers to require their local authority to enable payments to be made through 12 monthly instalments.
National Non-Domestic Rating Multiplier
We work out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier. There are two multipliers:
- the national non-domestic rating multiplier and
- the small business non-domestic rating multiplier.
The government sets the multipliers for each financial year,except in the City of London where special arrangements apply.
Ratepayers who occupy a property with a rateable value which does not exceed £50,999 will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non domestic rating multiplier.
The multiplier for a financial year is based on the previous year’s multiplier adjusted to reflect the Consumer Price Index (CPI) inflation figure for the September prior to the billing year. The current multipliers are shown on the front of your bill.
Rateable Value
Apart from properties that are exempt from business rates, each non-domestic property has a rate able value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs.
They compile and maintain a full list of all rateable values.The rateable value of your property is shown on the front of your bill.
This broadly represents the yearly rent the property could have been let for on the open market on a particular date specified in legislation.
For the current rating list, this date was set as 1 April 2021.
The Valuation Office Agency may alter the valuation if circumstances change. The ratepayer (and certain others who have an interest in the property) can also check and challenge the valuation shown in the list if they believe it is wrong.
Further information about the grounds on which challenges may be made and the process for doing so can be found on the VOA website.
Revaluations
All non-domestic property rateable values are reassessed at revaluations. The most recent revaluation took effect from 1 April 2023.
Revaluations ensure that business rates bills are up-to-date, more accurately reflect current rental values and relative changes in rents.
Frequent revaluations ensure the system continues to be responsive to changing economic conditions.
Business Rate Reliefs
Depending on individual circumstances, a ratepayer may be eligible for a rate relief (i.e. a reduction in your business rates bill). There are a range of available reliefs. Some are permanent reliefs, but temporary reliefs are often introduced by the Government at Budgets.
See information on business rates reductions
Subsidy control
The new UK subsidy control regime started on 4 January 2023. It helps public authorities, including devolved administrations and local authorities, to deliver subsidies that are tailored for local needs.
Public authorities giving subsidies must follow the UK’s international subsidy control commitments. The subsidy control legislation provides the framework for a new, UK-wide subsidy control regime.
For more information visit the GOV UK subsidy control regime page.
Rating advisers
Ratepayers do not have to be represented in discussions about their rateable value or their rates bill.
However, ratepayers who do wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors (RICS) and the Institute of Revenues, Rating and Valuation (IRRV) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser or company you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.
Information supplied with demand notices
Information relating to the relevant and previous financial years in regard to the gross expenditure of the local authority.
Read the explanatory notes for more information.