If you’re a business owner, there’s a good chance that you’re required to pay business rates on any non-domestic property owned by your business. But what are business rates, and how much can you expect to pay? Find out everything you need to know about business rates, business rate relief, and how to check the business rate of your property with our simple guide.
What are business rates?
In short, business rates are taxes on property used for business purposes. They’re designed to help fund local services. The government charges business rates on properties like shops, warehouses, offices, pubs, factories, holiday rentals, and so on. All non-domestic properties are likely to be subject to business rates. It’s also important to note that business rates may also be charged when only part of a building is used for non-domestic or business purposes. Businesses will receive their business rates bill for the following year from their local council in February or March.
How much are business rates?
Business rates are determined by the “rateable value” of a property (that’s the property’s estimated value on the open market). As such, business rates will vary depending on the value of the property itself. You can calculate your business rates by multiplying the property’s rateable value by the correct multiplier (which depends on the rateable value). Then, subtract any business rate relief that you’re entitled to (more on that below) to arrive at the estimated business rate. See here to find out which multiplier to use. You may also wish to use a business rate calculator, of which there are many available online, to help you complete the calculation.
How can I check business rates?
You can check the latest business rates using the Valuation Office Agency’s (VOA)’s online tool. This business rate checker enables you to check the rateable value for your property, which you can use to work out the relevant business rate. It’s also worth remembering that you can request changes to the valuation details if you believe that they’re outdated or erroneous.
What is business rate relief?
As we mentioned above, it’s important to remember that you may be entitled to business rate relief. Some forms of business rate relief (specifically, exempted buildings and empty buildings relief and transitional relief) may be applied automatically by the local authority, whereas you’ll need to apply for other schemes. Forms of business rate relief that you may be eligible for include small business rate relief, rural rate relief, enterprise zone relief, hardship relief, local newspaper relief, charitable rate relief, and retail discount. To check if you’re eligible for any of the above, simply get in touch with your local council.
Understanding small business rate relief
If you’re a smaller company, small business rate relief is likely to be the most relevant form of tax relief for your firm. Essentially, you’re eligible for small business rate relief if your business’s property has a rateable value of less than £15,000 or your business only uses one property (although you may still be eligible for small business rate relief if you use more than one property). If the property has a rateable value of £12,000 or less, you won’t need to pay business rates at all. If the property has a rateable value of £12,001 to £15,000, the relief rate will gradually decline from 100% to 0%.
Small businesses may still be eligible for some form of relief if they don’t qualify for small business rate relief. As long as the property has a rateable value of less than £51,000, the council will calculate your bill using the small business multiplier, which is lower than the regular multiplier. As such, it’s a good idea to explore all your business rate relief options when it’s time to pay your bill.
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