Find out how business rates are calculated and how to appeal your rateable value.
About business rates
Business rates are also known as National Non-Domestic Rates (NNDR). They are a property tax collected by councils and the occupiers of most commercial properties, such as shops, offices and warehouses, must pay them.
Under the government's business rates' retention arrangements, councils keep a proportion (about 40 per cent) of the business rates paid locally. This money, together with revenue from council tax payers, revenue support grants provided by the government, and certain other sums, is used to provide council services.
The business rates' bill is based on two key elements, over which councils have no influence - the rateable value and the multiplier.
The Valuation Office Agency (VOA) sets the rateable value of each property. This broadly represents the annual rent the property could be let for on the open market. The VOA maintains a rating list of all business properties.
Check the rateable value of your property on the GOV.UK website.
Reviewing rateable values
The VOA carries out a general review of rateable values (RV). For consistency, it assesses every property based on the rent it would attract on the same date. For the general revaluation that came into effect on 1 April 2017, the rental evidence date was 1 April 2015.
The next revaluation will come into effect on 1 April 2023, using a rental evidence date of 1 April 2021. Previously, the VOA carried out these reviews every five years, but now carries them out every three years.
Between general revaluations, the VOA adds newly built properties and removes those that have been demolished. The VOA also makes changes to the list if a property is altered or there is a change of use.
Appealing the rateable value
The ratepayer, and certain others who have an interest in the property, can appeal against the rateable value if they believe it is wrong.
You can find out more about the appeals process on the GOV.UK website.
You can also contact your local VOA office.
You must pay your business rates in full while any appeal remains outstanding.
You do not have to be represented in discussions about your rateable value or your rates bill. Appeals against rateable values can be made free-of-charge. However, if you do want to be represented, you should be aware that members of the Royal Institution of Chartered Surveyors (RICS) and the Institute of Revenue Rating and Valuation (IRRV) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take care and, if necessary, seek further advice before entering into any contract.
The rating multiplier is also known as:
- The rate in the pound
- The poundage
- The uniform business rate (UBR)
The government sets the rating multiplier for each financial year.
By law, the multipliers cannot go up by more than:
- The rate of inflation
- Plus any minor adjustment to take account of losses in national rate income arising from rateable value appeals
- Plus a supplement that pays for small business rate relief
How the rating multiplier works at revaluation
In the year when the VOA reviews rateable values, the overall national business rates bill only changes in line with inflation. This means that a change in your rateable value does not always mean a corresponding change in your bill.
Small business rate multiplier
There are two rating multipliers for each year:
- Small business rating multiplier, for ratepayers of a property with a rateable value less than £51,000
- Standard rating multiplier, for ratepayers of a property with a rateable value of £51,000 and above
For the 12 months from 1 April 2022 to 31 March 2023, the multipliers are:
- Standard non-domestic rating multiplier £0.512
- Small business non-domestic rating multiplier £0.499
The multipliers are set to remain the same for the new 2023 rating list from 1 April 2023 to 31 March 2024.
Calculating your business rates bill
To calculate the rates payable for the year, before any adjustments or relief, multiply the rateable value of the property by the multiplier for the year.
- The rateable value of a property is £51,570
- The multiplier for the year is £0.512
- The business rates due, before any adjustments, is £51,570 x 0.512 = £26,403.84
Estimating your business rates bill
You can estimate your business rates on the GOV.UK website.
We can give you details of the exact amount of rates to pay when we have all the information we need to make the calculation.