Business rates explained
Business rates are a local tax paid by the occupiers of all non-domestic/business property, in the same way that Council Tax is a tax on domestic property.
You’ll probably have to pay business rates on any property not used as a home. This includes shops, offices, pubs, warehouses and factories.
The Valuation Office Agency (VOA) sets the rateable value of business premises by using property details such as rental information. A property’s rateable value is an assessment of the annual rent the property would rent for if it were available to let on the open market at a fixed valuation date.
From 1 April 2017, the rateable values are based on the valuation date of 1 April 2015.
From 1 April 2023, the rateable values are based on the valuation date of 1 April 2021.
The valuation officer may change the rateable value if circumstances change. The ratepayer (and certain others who have an interest in the property) can appeal against the value shown in the list if they believe it is wrong.
We can only backdate any business rates rebate to the date from which any change to the list is to have effect.
How we calculate the rates
We work out the business rates bill by multiplying the rateable value of the property by the relevant multiplier.
There are 2 multipliers: the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The standard non-domestic rating multiplier is higher to pay for the Small Business Rate Relief Scheme.
The Government sets the multipliers for each financial year for the whole of England. The multipliers change each year in line with inflation and take account of the cost of Small Business Rate Relief.
From 1 April 2023 the small business multiplier applies to businesses with a rateable value of less than £51,000. As an example, the rates for a shop with a rateable value of 15,000 for 2023/24 would be 15,000 x 0.499 = £7,485.
For a shop with the rateable value of £52,000 we use the higher multiplier for example £52,000 x0.512 = £26,624
The current and historical multipliers can be found on the business rates pages of gov.uk.
The Valuation Office Agency (VOA) adjusts the rateable value of business properties to reflect changes in the property market. It usually happens every 5 years and the most recent revaluation came into effect on 1 April 2023.
Transitional relief limits how much your bill can change each year because of revaluation. Any changes to your bill are gradual if you’re eligible.
You’ll get transitional relief if your:
- property is in England
- rates go up or down by more than a certain amount