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Business Rates Explained

Business Rates Explained

 

I. Overview

Business rates are charged on most non-domestic properties, like:

  • shops
  • offices
  • pubs
  • warehouses
  • factories
  • holiday rental homes or guest houses, e.g. a boarding house

You’ll probably have to pay business rates if you use a building or part of a building for non-domestic purposes.

Business rates are handled differently in Scotland: (www.business.scotland.gov.uk/view/guide/business-rates-the-basics)

and Northern Ireland: (www.nibusinessinfo.co.uk/content/help-available-business-rates).

What to pay and when

Your local council will send you a business rates bill in February or March each year. This is for the following tax year. You can also estimate your business rates bill (www.gov.uk/calculate-your-business-rates).

You might be able to pay your business rates bill in 12 instalments. Contact your local council (www.gov.uk/contact-your-local-council-about-business-rates) to find out more.

Relief schemes

You may be able to get business rates relief. This is sometimes automatic, but you may need to apply through your local council.

The process depends on where you are. Find out about:

  • business rates relief in England

(www.gov.uk/apply-for-business-rate-relief)

  • business rates relief in Scotland (www.business.scotland.gov.uk/view/guide/business-rates-relief)
  • business rates relief in Wales

(www.business.wales.gov.uk/running-business/tax-corporation-tax-allowances-business-rates-vat/business-rates-relief-in-wales)

  • business rates relief in Northern Ireland

(www.nibusinessinfo.co.uk/content/help-available-business-rates)

Who doesn’t need to pay

Exemptions include:

  • farm buildings and land (excluding buildings used as offices or for other business activities)
  • fish farms
  • places of public religious worship, e.g. registered buildings and church halls (except in Scotland - you apply for relief for these buildings instead of being exempt)
  • buildings used for training or welfare of disabled people (except in Scotland - you apply for relief for these buildings instead of being exempt)

 

II. How your rates are calculated

England and Wales

Business rates are worked out by multiplying the ‘rateable value’ of your property (set by the Valuation Office Agency (VOA)) by the business rates multiplier (set by central government).

VOA may send you a request for rental information about your property so they can work out its rateable value. You can either:

  • provide your rental information online
  • send it by post - contact your local VOA office and ask for form VO6003, or form VO6005 if you need to send additional information

Contact VOA if you need more time to send in your rental information.

VOA
Email: rental-information-request@voa.gsi.gov.uk 
Telephone (England): 03000 501 501 
Telephone (Wales): 03000 505 505 
Monday to Friday, 9am to 5pm 

Scotland

Business rates are worked out using the rateable value set by the local assessor and the ‘poundage rate’ (a proportion of your rateable value) set by the Scottish Government.

The rateable value of a property is based on its estimated open market rental value on a specific date.

You may pay less than this if you’re eligible for any reliefs.

(www.business.scotland.gov.uk/view/guide/business-rates-relief)

If you think your rates are wrong

Contact VOA if you’re in England or Wales.

Contact your local assessor if you’re in Scotland - you can look them up on the Scottish Assessors Association website (www.saa.gov.uk/saacontacts.php).

 

III. Revaluation

Revaluation adjusts the value of business rates to reflect changes in the property market.

It usually happens every 5 years. The most recent revaluation in England and Wales was 1 April 2010.

The next revaluations will be in:

  • 2017 in England, Scotland and Wales
  • 2020 in Northern Ireland

At revaluation, the multipliers (poundages in Scotland) are revised so that the overall national business rates bill only changes in line with inflation.

This means that a change in your rateable value doesn’t always mean a change in your bill.

To make sure your valuations are accurate, you may need to give the Valuation Office Agency (VOA) or your assessor up-to-date rental evidence for your property at revaluation.

Find your 2010 valuation:

  • in England or Wales on the VOA website: (www.2010.voa.gov.uk/rli/en/basic/find)
  • in Scotland on the Scottish Assessors Association website (www.saa.gov.uk/)

 

IV. Getting professional advice

In England and Wales, you can query your rateable value by contacting the Valuation Office Agency. There’s no charge for this.

Valuation Office Agency 
Telephone (England): 03000 501 501 
Telephone (Wales): 03000 505 505

You can get help from a qualified rating surveyor through one of the following organisations:

  • Royal Institution of Chartered Surveyors (RICS): www.rics.org
  • Institute of Revenues, Rating and Valuation (IRRV): www.irrv.net/HOME/
  • Rating Surveyors Association: www.ratingsurveyorsassociation.org/

You may be charged for any advice you get from a rating surveyor right from the start.

You can call the RICS enquiry line for advice. The first 30 minutes are free.

RICS enquiry line 
Telephone: 024 7686 8555

In Scotland, you can also query your rateable value by calling your local assessor’s office (www.saa.gov.uk/saacontacts.php). There’s no charge for this.

 

V. If your business or premises change or can't be used

Your business rates could change if:

  • you move or make changes to your premises
  • the nature of your business changes
  • your premises can’t be used, e.g. because of flooding
  • you sublet part of your property
  • you merge 2 or more properties into 1

You must report any changes to ensure you’re paying the right amount and don’t get a backdated increase in your bill.

Report changes to:

  • the Valuation Office Agency (VOA) in England or Wales (www.2010.voa.gov.uk/rli/en/basic/correct)
  • your local assessor in Scotland (www.saa.gov.uk/saacontacts.php)

 

VOA
Telephone (England): 03000 501 501 
Telephone (Wales): 03000 505 505

Find out the rateable value of premises

If you’re moving to new premises, you can find out how much the rateable value is in England or Wales (www.2010.voa.gov.uk/rli/) or in Scotland (www.saa.gov.uk/).

 

VI. Working at home

You don’t usually have to pay business rates for home-based businesses if you:

  • use a small part of your home for your business, e.g. you use a bedroom as an office
  • sell goods by post

You may need to pay business rates as well as Council Tax if:

  • your property is part business and part domestic, e.g. if you live above your shop
  • you sell goods or services to people who visit your property
  • you employ other people to work at your property
  • you’ve made changes to your home for your business, e.g. converted a garage to a hairdressers

Contact the Valuation Office Agency (VOA) to find out if you should be paying business rates. In Scotland, contact your local assessor (www.saa.gov.uk/saacontacts.php).

VOA
Telephone (England): 03000 501 501 
Telephone (Wales):    03000 505 505

VII. Pubs and licensed trade

In England and Wales, the Valuation Office Agency (VOA) works out your rateable value (www.gov.uk/introduction-to-business-rates/how-your-rates-are-calculated) based on the annual level of trade (excluding VAT) that a pub is expected to achieve if operated in a reasonably efficient way. This is called ‘fair maintainable trade’ and it’s based on:

  • the type of pub or licensed premises
  • the area it’s in
  • the services it offers, e.g. food, gaming or sports screenings

The VOA also looks at rents and turnovers to work out the fair maintainable trade figure, then applies a percentage to work out the rateable value.

The percentages are agreed with the British Beer and Pub Association and they’re in the VOA’s 2010 pub guide. (www.voa.gov.uk/business_rates/PublicHouses/Guide_to_Public_Houses_R2010.pdf)

You can read more about how the VOA values pubs and other licensed premises for business rates.

(www.gov.uk/government/publications/business-rates-guidance-for-pubs-and-licensed-trade)

Contact the VOA if you want to check the figures they’re using or don’t agree with the figures being used.

You’ll need to provide details of turnover (excluding VAT) for all sources, such as liquor, food and gaming.

VOA
Telephone (England): 03000 501 501 
Telephone (Wales): 03000 505 505

Scotland

In Scotland, your local assessor works out your rateable value.

If you want to check the figures they’re using or don’t agree with the figures being used, contact your local assessor (www.saa.gov.uk/saacontacts.php).


 

Business Rates Explained
2016-05-09 23:03:52

This information is taken from https://www.gov.uk/introduction-to-business-rates/overview and provides a comprehensive explanation of Business Rates and how they affect commercial premises occupiers. This information is reproduced under the Open Governmen

Business Rates Explained.pdf