About business rates

Business rates is a local tax that is paid by the occupiers of all non-domestic / business properties, in the same way that council tax is a tax on domestic properties. It used to help fund services provided by the local authority.

The government charges rates on common business properties such as shops, offices, pubs, warehouses, and factories. However, the property doesn't have to be used for a business - if it is used for purposes which are not domestic, it is likely to be rateable.

Business rates are calculated using a property’s ‘rateable value’.

The rateable value is a property’s estimated annual rental value on the open market.

The last revaluation, conducted by the Valuation Office Agency (part of HMRC), which came into effect on 1 April 2017, refers to values as at 1 April 2015.

Revaluation usually happens every 5 - 7 years, meaning a revaluation is now underway for 2023.

The rateable value is multiplied by the Uniform Business Rate (set by government) to arrive at the annual bill. For 2022/23, these are as follows:

• 49.9p for properties with a rateable value under £51,000
• 51.2p for properties with a rateable value over £51,000

For example, a property with a rateable value of £10,000 and a multiplier of 49.9p would produce an annual bill of £4,990

For more information see the revaluation section at the bottom of the page.

Occupied properties

In the case of occupied properties, the person or company occupying it is liable to pay the rates.

Sometimes a landlord may charge an occupier a rent which is inclusive of rates.

Even in these cases the occupier is still the person liable for payment, and the bill will be sent in his/her name. Certain reliefs are available for occupied properties.

Reductions and reliefs.

NNDR explanatory notes

We are no longer required to issue paper explanatory notes.

We used to issue these with non-domestic rates bills.

You can see the information contained in the explanatory notes here.

Non-domestic rates explanatory notes [pdf document].

Business rates multiplier

We work out a rates bill by multiplying the rateable value of the property by the multiplier or 'poundage'. The Government sets this from 1 April each year for the whole of England.

The Government usually changes this every year in line with inflation.

For more information see the .gov business rates page [external link]

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Rateable value

All relevant non-domestic property has a rateable value.

This is usually set by the valuation officers of the Valuation Office Agency (VOA). This is an agency of Her Majesty's Revenues & Customs.

The rateable value represents the yearly rent the property could have been let for on the open market, on a particular date.

The valuation officer must maintain the list of values. They may alter the value if the circumstances of the property have changed.

The ratepayer (and certain others who have an interest in the property) can also appeal against the value if they believe it is wrong.

Check the rateable value of your property [external link]

Transitional arrangements

Transitional relief limits how much your bill can change each year because of revaluation [external link].

This means changes to your bill are phased in gradually if you’re eligible.

You get transitional relief if your:

• property is in England,
• rates go up more than a certain amount,

We will adjust your bill automatically if you’re eligible.

How much your bill can change by from one year to the next depends on both:

• your property’s rateable value,
• whether your bill is increasing because of revaluation,

You stop getting transitional relief when your bill reaches the full amount set by a revaluation.

The business rates year is from 1 April to 31 March the following year.

View the changes to rateable value [external link].

Unoccupied properties

With regards to unoccupied properties, legislation states that the ‘person entitled to possession’ of a property is liable to pay business rates. The person entitled to possession will usually be the leaseholder/tenant or the owner of the property.

Business Rates will not be payable in the first three months that a property is empty.

This is extended to six months in the case of certain industrial properties. After this period, rates are payable in full. The rate free period is linked to the property and not the business/person who may be liable.

Unoccupied properties that meet other criteria, including listed buildings, those with a rateable value below a certain threshold might not have to pay rates. Others such as charities can also apply for a reduction in their bill.

Billing and collection

Bills are usually sent in March with 10 monthly instalments due on the 1 day of each month (1 April – 1 January). These can be extended to 11 or 12 months with different payment methods being available, including direct debit.

If circumstances change, accounts will be adjusted, and further bills sent, and businesses will usually only pay for the period of their occupation. If they have a lease on the property, they will continue to be liable until this expires.

Statutory reminder notices will be sent if instalments are missed, or part paid.

Repeat offences will mean that the person loses their right to pay by instalments and the full amount will become payable, which may result in a court summons being issued.

Further recovery action may be taken after this point, including bankruptcy and bailiffs.

Revaluation 2023