Business rates are a tax on properties used for business. You need to pay business rates even if you don't own the property, as the occupier is the one liable for them.
How to pay business rates
- You are responsible for notifying the council when your move into new business premises.
- Your business rates bill will tell you exactly how much you need to pay and when.
- 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 notice.
Working and living from the same property
If you work from home and 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. The same applies if you're a B&B. Contact your local authority for advice.
How business rates are calculated
- In England, Wales and Scotland, your business rates are calculated by multiplying the rateable value of your property by a poundage (also known as a 'multiplier'). In Northern Ireland, you multiply your Nett Annual Value by a set poundage.
- Your property's rateable value is the value your property at for tax purposes. In England and Wales it's determined by the Valuation Office Agency (VOA); in Scotland by the Scottish Assessors; in Northern Ireland by the Land & Property Service (LPS).
- The multiplier (poundage) is set by the government every April 1.
- The multiplier (poundage) has been set for 2010/11 at: 41.4p in the pound for England; 40.9p for Wales; 40.7p for Scotland for properties with a rateable value less than £35,000, 41.4p for those over that threshold; in Northern Ireland it varies between regions so you need to check here: http://www.lpsni.gov.uk/index/property_rating/rate_poundages_2010.htm
- So in England, if you has a property whose rateable value was £20,000, you multiply that by 0.414 (as the standard multiplier is 41.4p = £0.414) - so business rates are £8,280.
Reliefs for business rates
- Many small businesses in the UK are eligible for some kind of relief from business rates, such as the small business rate relief. These cut the amount of business rates you have to pay - in some cases, you are exempt from paying any. Check with your local authority and/or the website of the VOA, Scottish Assessors or LPS respectively.