Business Rates: What you need to know
Business Rates Retention
From 1 April 2013, Councils can keep a proportion of the Business Rates paid locally. As Councils will benefit from any increase in Business Rates collected they will be encouraged to work with local businesses to regenerate the area and promote growth.
How is my Business Rates charge worked out?
Each commercial premises in England and Wales is assessed individually and assigned a ‘Rateable Value’ (RV). The RV is calculated by various means but should be roughly equal to the yearly rent the property could have been let for on the open market on a particular date.
The RV is then combined with a multiplier set by the Government. The multiplier changes each year in line with inflation. Each year the Government will set two multipliers – the standard non-domestic rating multiplier and the small business non-domestic multiplier.
For 2014-15 the standard multiplier is 0.482 pence in the pound and the small business multiplier is 0.471 pence in the pound. ‘Small business’ is defined by the size of the RV applied to a property not by the turnover of the business in occupation.
For example a property with an RV of £30,000 will have an annual charge of £14,460
£30,000 x 0.482 = £14,460
What can I do if I think my Rateable Value is too high?
The assessment is carried out by the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs. They draw up and maintain a full list of all rateable values which are available to the public on their website at www.voa.gov.uk.
The VOA carry out a revaluation of each property every five years, however the revaluation due in 2015 has been put back to 2017. The RV shown on your bill will be based on valuations effective in April 2008 for the latest revaluation list in 2010..
The Valuation Officer may alter the value if the circumstances of the property have changed. To find out if you have grounds to appeal your RV please visit the VOA website (www.voa.gov.uk) or contact the VOA on 03000 501501. If you decide to lodge an appeal against your RV, you do not have the right to withhold payment of Business Rates while awaiting the outcome of your application. You must continue to pay your Business Rates under the current legal rateable value until the Valuation Office notifies you of their decision.
If you stop paying, the Council will take recovery action against you to collect any unpaid Business Rates. This may result in the issue of a court summons and the addition of court costs.
If your appeal is successful any overpayment arising from the revaluation will be refunded to you or used against any future charges. Interest may be payable on the overpayment providing the Council has not had to take recovery action against you.
In order to reduce the impact for those ratepayers who would otherwise have seen significant increases in their Rates liability, the Government has put in place a £2billion transitional relief scheme. This scheme is designed to limit and phase in changes in Rate bills as a result of the 2010 revaluation by setting a limit on the amount that any ratepayer’s charge can increase per year. To help pay for the limits on increases in bills, there also have to be limits on reductions in bills.
Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier). Therefore the amount of relief shown on your bill will change slightly each year as the increase or decrease is phased in. The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1 April 2010, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to your bill as a result of other reasons (such as changes to the amount of small Business Rate relief) are not covered by the transitional arrangements.
The transitional arrangements are applied automatically and are shown on the front of your bill. More information on revaluation 2010 can be found at www.voa.gov.uk
What else can I do to reduce my charge?
There are various ways that you can reduce the amount of Business Rates that you pay. You may qualify for relief as a retail business, small business, charity or if your property is empty for example. Please visit
Business Rates - Reductions. for more information and application forms.
You can also apply to pay your Business Rates by instalments through to March each year in order to maximise the amount of time you have to pay and therefore reducing the monthly sum.
Download the Business Rates guide
Download this year's Business Rates mailout here