Calculating your business rates
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Business rates - also known as national non-domestic rates - are
a tax on properties used for business. They help pay for your
borough's services, such as the fire brigade and police.
Who pays business rates?
- The occupier of the property is usually the one
responsible for paying business rates, and the one who the bill
will be addressed to.
- If you rent your business premises, your rent may include
business rates - your landlord is then responsible for
passing on the rates money to your local authority. Check with your
landlord whether or not this is the case.
- You are responsible for notifying the council when
your move into new business premises or when you start a new
How to pay business rates
- Your bill usually comes in March or April.
- Most councils ask you to pay in ten equal monthly
instalments - the bill will indicate when each is due.
- If you miss a payment, you get a reminder giving you
seven days to pay. If you miss that deadline, you're
liable to pay the whole outstanding balance for the rest of the
year. If you're struggling to pay, contact your council - they will
usually show leniency if you explain the situation and give them
How business rates are calculated
Your business rates bill will tell you exactly how much you need
to pay and when, so your local authority will have done all the
calculations for you, but it's worth knowing how to do it yourself
- You want to check whether you're paying the right
- You want to plan your financial year ahead in a
new property whose business rates you don't yet know.
- You want to find out what the business rates are
for a property you're thinking of moving your business into
(although the landlord may be able to tell you this).
The local council works out your business rates by multiplying
the rateable value of your property by a multiplier (also known as
- Your property's rateable value is calculated by
the government's Valuation Office Agency (VOA) - it's the amount
the VOA values your property at for tax purposes.
- You can find out your rateable value by putting
your post code into the
VOA's rating list.
- The rating list is updated every five years - the
last one was put together in 2005. So your property's rateable
value may change in 2010.
- The multiplier is set by the government every
- If you qualify for small business rate relief (see
below), the multiplier for 2009/10 has been set at 48.1p in the
- For all other properties, the multiplier has been set at
48.5p in the pound for 2009/10.
Small business rate relief
- If your rateable value is less than £15,000, you
qualify for small business relief rate (SBRR) - providing you only
occupy one business property in the UK or the rateable value of a
second property is less than £2,200, or the sum of all your
properties' rateable values is less than £15,000. (Second
properties will get no relief.)
- You need to apply to your local authority for
- Your application lasts as long as the current rating
list (until April 1 2010). When the new rating list is drawn
up, you need to reapply. (Your application will then last five
years until the next rating list is drawn up in 2015).
- You can apply for the relief immediately (you used
to have to wait until the end of the financial year if you were new
to the property).
- If your rateable value is less than £5,000, you
qualify for 50% relief. Talk to your local council for more
- If your rateable value is between £5,000 and
£9,999, relief decreases on a sliding scale at an approximate rate
of 1% relief for each £100 increase in rateable value. Talk to your
local council for more information.
Your property has a rateable value of £13,500. As this is less
than £15,000, it qualifies for 2009/10's small business rate relief
multiplier of 48.1p - or £0.481. So multiplying £13,500 by £0.481,
you get £6,493.50. In ten equal monthly instalments, you can expect
to pay £649.35 per month for the next ten months.
I work from
home - do I need to pay business rates?
If a part of your home is used solely for business purposes - a
room that's a workshop or studio, for example - you may be liable
for business rates on that part of the property. Get in touch with
your local council to check.
I run a B&B that I also live in - do I need to pay
You may well need to pay business rates on at least part of
your property. Get in touch with your local council to check.
My property is empty - do I need to pay business
If your property is empty, you are exempt from business rate if
your rateable value is less than £15,000 (as of 2009/10). If it's
more, you'll need to pay.
Do empty properties qualify for small business rate
What happens if my rateable value increases to more than
£15,000 after I've been given small business rate
Your eligibility for SBRR will stop as soon as the rateable value
goes over the threshold.
Am I still eligible for small business rate relief if I
have two separate businesses?
That will depend on your individual case, so you need to discuss
your circumstances with your council.
What do I do if I think my business rates bill is
You need to contact your local council and explain what you think
is wrong. But you still need to carry on make your due payments
until the council tells you otherwise.
What do I do if I can't afford my bill?
Contact your local council immediately. They may be able to change
the dates and amounts you owe.
Rateable value: the amount your property is valued
at for tax purposes, as decided by the Valuation Office Agency and
as listed in the VOA rating lists.
Multiplier, also known as 'poundage' and 'uniform business
rate' (UBR): The amount you multiply your rateable value by
to calculate how much you owe in business rates per year. It is
decided every April 1.
- Valuation Office Agency helpline: 0845 602 1507
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