What are business rates?

Have a nice cup of tea or coffee at the ready and let's delve into the world of business rates so you can get a better understanding of what they are...

So what are business rates and how are they calculated? 

Business rates are a tax on business properties such as offices, shops, warehouses, public houses, holiday accommodation and it can also apply to part of your home if you run your business from there.  You are more likely to be required to pay business rates on part of your home if you have converted it or made an area exclusively for business use.   

In England and Wales Local authorities calculate business rates bills using the rateable value of the property and multiplying this by a rate per pound known as the business rates multiplier. There are two multipliers set by the Government each year and these are small business and standard.   

How is a property’s rateable value calculated? 

The Rateable value is based on an estimate of the property's rental value on the open market on a specific date. The Valuation Office Agency (VOA) compiles business rating lists for England and Wales and their officers decide the rateable valuations for their local areas. These values are often reviewed every five years to take into account changes in the property and its usage.   

You can check the rateable value of a property here.

Paying business rates - When are business rates due? 

Your local authority will bill you for business rates around February or March time each year for the next tax year.  You will normally be required to pay in monthly installments.   

Can I get any reduction in my business rates? 

Some business properties are eligible for a reduction known as ‘business rates relief’ from the local council.  You may be able to apply for the following types of relief: 

• Small Business Rate Relief  
• Rural Rate Relief 
• Charitable Rate Relief  
• Enterprise Zone Relief 
• Hardship Relief  
• Empty Property Rate Relief  

Small Business Rate Relief may be granted if your business property has a rateable value below a threshold which is reviewed annually by the Government.
To find out if you might qualify you should contact your Local Council.