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.

Until 31 March 2017, the rateable values were based on a valuation date of 1 April 2008.

From 1 April 2017, the rateable values are based on the valuation date of 1 April 2015.

You can find out the current rateable value of any business premises by visiting the VOA website.

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.

If you disagree with your property’s business rates valuation you can appeal.

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 2017 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 2017/18 would be 15,000 x 0.466 = £6,990.

For a shop with the rateable value of £52,000 we use the higher multiplier for example £52,000 x0.479 = £24,908

The current and historical multipliers can be found on the business rates on gov.uk.

Revaluation

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 2017.

Transitional relief

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

The business rates section on gov.uk has current information on this relief.