Calculating your business rates ensures you’re paying the right amount on your commercial premises. It’s also helpful when planning for the financial year ahead, as well as if you're thinking of moving into new premises with different business rates.
Find out how business rates are calculated and how to estimate yours with this simple guide.
Business rates are a tax on property used for business purposes. They’re charged on properties including, but not limited to, offices, shops, pubs, warehouses and even your home if you work there.
Any business that occupies a building, or part of one, that’s used for non-domestic purposes is required to pay business rates. Business owners who work from home may need to pay business rates if the room they work in is used exclusively for business purposes.
Those working from home will have to pay business rates as well as Council Tax when:
To calculate your estimated business rates for the year ahead, you need to multiply the government’s up-to-date multiplier by the rateable value of your business.
A multiplier (or poundage rate) is the number of pence-per-pound of rateable value that you need to pay through business rates. The government reviews the multipliers each year in line with inflation.
Access the government's current business rates multipliers.
Rateable value is the value assigned to non-domestic premises by the Valuation Office Agency. It’s based on a property’s annual market rent, size and usage.
The Valuation Office Agency (VOA) reviews these values every five years and often values properties at different levels. Click here to find the rateable value for your business premises.
Using the ‘multiplier x rateable value’ formula mentioned above, here's an example to help you understand how the process works:
Please note: Business rates are calculated differently in Scotland and Northern Ireland. You can find out more by accessing the Scottish government’s business rates calculator and Northern Ireland’s business rates calculator.
Announced in March 2020, the government introduced a business rates holiday for businesses in the retail, leisure and hospitality sectors to help them through the disorder created by Covid-19.
The relief came in two forms:
In March 2021, Chancellor Rishi Sunak announced in the Budget that this relief will last until the end of June. After this date, business rates will be discounted by two thirds up to a value of £2 million per business.
The first thing to check is the Valuation Office Agency (VOA)’s rateable value for your property. It’s also worth comparing the value with other similar properties in your area.
If you’re still convinced that the rateable value is incorrect, you can apply to have it changed.
If you feel the valuation of your property is incorrect, you can challenge the Valuation Office Agency's decision.
Challenges to their decision can be made on the following grounds:
For more details on when you can and cannot submit a challenge, what to do before you submit a challenge, and information on gathering and supplying evidence, head to Gov.uk's business rates portal.
If you still don't agree with the VOA's decision, you may have the right to take your appeal to the Valuation Tribunal.
The Valuation Tribunal handles appeals against:
For more information on the appeals process, head to Gov.uk's page here.
If your business has a rateable property value of less than £15,000 and uses only one property, you can apply for small business rates relief.
Full relief is available on properties with a rateable value of £12,000 or less. For those between £12,001 and £15,000, relief goes down incrementally from 100% to 0%.
So, if your rateable value is £13,500, you’ll get 50% off your bill. If your rateable value is £14,000, you’ll get 33% off.
If you're moving into or out of a non-domestic property or you own a property that's occupied or vacant, you'll need to get in touch with your local council so they can:
If you've moved into a business premises, then you'll need to contact your local council's business rates team and provide them with:
If you've moved out of a business premises, you'll need to contact your local council. You'll still be liable for the business rates at the premises if your lease or tenancy agreement hasn't ended.
When you're in touch with your council, you should provide:
There are certain properties which may be exempt from business rates, including:
However, these exemptions are subject to strict legal requirements. If your property is based in England and you believe it should be exempt, be sure to get in touch with the Valuation Office Agency service.
If you have a building that's been empty for three months, you do not have to pay business rates on the building for that duration. When this period has ended, however, most business must pay full business rates.
Certain properties can get extended property relief, such as:
Be sure to get in contact with your local council to let them know when your property becomes vacant.
We hope you’ve found these business rates guides and resources helpful. But if you're still unsure, we’re more than happy to help with any problems or queries you might have. Be sure to contact our Customer Services team on 0161 837 3395 so we can get things sorted for you.
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