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This is our guide to business rates based on the frequently asked questions we receive. The management and administration of business rates can be complex, particularly where properties are located in different administrative regions. If you do not find your answer, please don’t do not hesitate to contact us.
In the United Kingdom, business rates are a tax on non-domestic properties. The amount payable is based on the Rateable Value (RV) of a property, which is set by the Valuation Office Agency (VOA) for England and Wales, Scottish Assessors Association (SAA) for Scotland and Land & Property Services (LPS) for Northern Ireland. Intended to fund local services, the tax is paid by the occupier or, if vacant, the owner (or person who has the right to occupy).
The respective governments in England, Scotland, Wales, and Northern Ireland set business rates. It’s important to note that the exact method for calculating business rates varies by region, so it’s best to consult a professional for specific advice on business rates.
England
The Valuation Office Agency (VOA) in England assesses a property’s Rateable Value (RV), which is used to calculate the amount of business rates payable. The government determines the multiplier, known as the Uniform Business Rate (UBR), that is applied to the RV to determine the total amount of business rates payable, although various reliefs and adjustments can complicate the calculation.
Wales
The Valuation Office Agency (VOA) also sets the RV in Wales. However, the Welsh Government sets the UBR, and adjustments for reliefs and exemptions.
Scotland
The Scottish Assessors Association (SAA) determines the RV of properties in Scotland, while the Scottish government determines the UBR applied to the RV to determine the total amount of business rates payable. The Scottish Government have devolved powers on matters relating to certain rates reliefs to the Local Government, which can create confusion with little consistency between billing authorities.
Northern Ireland
Land and Property Services (LPS) determines the Rateable Value of non-domestic properties and collects rates on behalf of the Northern Ireland Executive and district councils. Rates are used to fund regional services (health, education, roads etc) and local services (refuse collection, parks, cemeteries etc).
For properties in England, Wales and Scotland, business rates are calculated based on the Rateable Value of a property, which is determined by the VOA or SAA, depending on the location of your property. The Rateable Value is intended to reflect a hypothetical rental value which is set down by legislation and is based on the estimated open market rental value of a property on a specific date, taking into account its size, location, and various other factors. The local billing authority (council) will then apply the appropriate multiplier, set by the government, and any additional adjustments (reliefs and exemptions) to determine the final amount of the property tax payable.
Business rates in Northern Ireland are calculated using the Rateable Value of the property and the Non-Domestic Rate Poundage, which is made up of a Regional Rate and a District Rate. The Northern Ireland Executive sets the Regional Rate and each district council set their own District Rate annually.
The amount of business rates that a business will need to pay depends on the Rateable Value (RV) of the property, which is assessed by the Valuation Office Agency (VOA) in England and Wales, the Scottish Assessors Association (SAA) in Scotland and the Land and Property Services (LPS) in Northern Ireland.
Business rates are initially calculated by multiplying the RV of a property by a multiplier set by the government, known as the Uniform Business Rate (UBR). In many cases, further adjustments are required to reflect various mandatory and/or discretionary reliefs and exemptions. The UBR is reviewed and set annually and may vary between different regions or local authorities.
Reliefs and exemptions are available for certain properties and/or businesses. It’s important to note that the exact amount of business rates payable can vary widely depending on a range of factors, and it’s recommended to consult with a professional or the relevant local authority for specific guidance.
Business rates are due annually, but local authorities can allow payment by instalments. Many local authorities default to ten monthly instalments from April to January. However, in England, it is possible to ask for this to be spread over 12 months. There may be exemptions and reliefs available, and failure to pay will usually result in enforcement action.
A property’s Rateable Value (RV) is intended to reflect a hypothetical rental value set down by legislation and based on the estimated open market rental value of a property on a specific date, considering its size, location, and various other factors. This is determined by the Valuation Office Agency (VOA) in England and Wales, the Scottish Assessors Association (SAA) in Scotland and the Land and Property Services (LPS) in Northern Ireland. The RV is used to calculate the business rates a property owner or occupier must pay. The RV is not the same as the property’s market value, which is determined by other factors. The RV is now reassessed every three years and can be challenged if a property owner or occupier believes it is overvalued. If a property is undervalued, the VOA, SAA or LPS may correct it, resulting in a backdated bill.
The business rates multiplier, also known as the Uniform Business Rate (UBR), is a government-mandated multiplier that is used to calculate the amount of business rates owed on a property. The multiplier is applied to the property’s Rateable Value (RV), as determined by the Valuation Office Agency (VOA) in England and Wales and the Scottish Assessors Association (SAA) in Scotland. The UBR is reviewed and set annually and may differ between regions or local governments.
It’s important to note that the exact amount of business rates payable can vary greatly depending on the RV, the UBR, and any reliefs or exemptions that may apply, so it’s best to seek specific advice on business rates from a professional like us or the local authority.
See our Business Rates Data Card for the latest UBRs, reliefs and schemes.
Business Rates are a tax on the occupation or right to occupy a property. It is the occupier or, where the non-domestic property is vacant and not subject to a lease, the property owner who is responsible for paying business rates. The ratepayer can include businesses, charities, individuals, government agencies etc.
Most non-domestic properties are subject to business rates in the UK unless the property or occupier is eligible for certain reliefs or exemptions. Certain types of properties or businesses may be eligible for relief, including small business rate relief, rural rate relief, and charitable rate relief, which can reduce the amount of business rates payable in some cases to zero. In certain instances, a property may be exempt from business rates. This includes agricultural land and buildings, and properties used for religious worship. The exact requirements for business rates may vary depending on the region and the specific circumstances.
The legal responsibility for paying business rates is with the occupier or where a property is vacant, whoever has the legal right to occupy. A lease may state that the landlord is responsible for the business rates. However, this is a contractual arrangement between the landlord and the tenant. If business rates are not paid, the local authority will take recovery action against the occupier, irrespective of any lease arrangements. It is, therefore, important that both tenants and landlords understand the implications.
If you fail to pay your business rates, your local council will take enforcement action.
To check your business rates in the UK, you can follow these steps:
You can also call or email your local authority’s business rates department to request a copy of your business rates bill or ask any questions about your business rates. It is important to remember that business rates are usually paid in instalments, and late payments can eventually result in recovery action by the local authority. It is, therefore, crucial to check that your business rates payments are being made on a regular basis.
Business rates are reviewed on a cyclical basis to ensure that they reflect the market conditions and the property’s value. The Rateable Value (RV) of a property is assessed by the Valuation Office Agency (VOA) in England and Wales, the Scottish Assessors Association (SAA) in Scotland and the Land and Property Services (LPS) in Northern Ireland and is used to calculate the amount of business rates payable. The RV is calculated using a “hypothetical” rental value for the property on a specific date known as the ‘Antecedent Valuation Date’ (AVD). Under the current legislation, the AVD is set two years before the start of a new business rate cycle in England and Wales, 18 months for Northern Ireland and 12 months for Scotland.
When a business owner believes that the RV of their property is incorrect, they can ask the VOA, SAA or LPS to review it. England and Wales undertake this via a process known as ‘Check, Challenge, and Appeal’ (CCA). The owner of the business must first ‘check’ the information held by the VOA and can then move to ‘challenge’ the RV if they believe it is incorrect. If the challenge fails, they may ‘appeal’ the decision to the Valuation Tribunal for England or Wales. Scotland and Northern Ireland have their own review and appeal process.
The governments conduct periodic revaluations of commercial properties, which may result in changes to the RV and the amount of business rates payable. These revaluations have historically taken place every five years. However, there have been variations due to several factors, and the governments across all regions have now committed to moving to a three-year cycle. The exact requirements and procedures for reviewing business rates may differ depending on the region and the specific circumstances, so it is best to consult a professional for specific business rate guidance.
If you believe your property’s Rateable Value is incorrect, you can use the Check, Challenge, and Appeal (CCA) process. Learn more about the Check Challenge Appeal.
In a revaluation year, any person with an interest in a property can submit a proposal against the Rateable Value by 31 August. Where a business receives a notification of change of Rateable Value and/or is a new owner, tenant and/or occupier of a property, any person has the right to submit a proposal with the local Assessor within four months of receiving their valuation notice, supplying detailed evidence why they consider that their property has been overvalued. Learn more about how to appeal business rates in Scotland.
If you are a ratepayer in Northern Ireland and think your property’s Rateable Value is incorrect, you may be able to appeal your business rates. Contact us about appealing your business rates in Northern Ireland.
Your business rates can change for various reasons, such as changes to the Rateable Value of your property, changes in government policy or regulations, or changes to your business circumstances. Here are some examples of common scenarios that may lead to changes in your business rates:
Revaluation: All non-domestic properties are revalued cyclically by the Valuation Office Agency (VOA) in England and Wales, the Scottish Assessors Association (SAA) in Scotland and the Land and Property Services (LPS) in Northern Ireland. Your business rates bill is calculated using the Rateable Value. If the Rateable Value of your property changes, so will your business rates bill.
Changes to the property: If you make changes to your property, such as adding an extension or changing its use, the Rateable Value may change, affecting your business rates liability.
Changes to government policy: Changes in government policy or regulations can also affect your business rates. For example, the government may introduce new reliefs or exemptions that your business may be eligible for, or they may increase the business rates multiplier, resulting in a higher business rates bill.
Changes in business circumstances: Changes in your business circumstances, such as re-organisation resulting in an underuse or site closure, can also affect your business rates.
Yes, business rates are still payable for vacant properties. However, there are initial exemptions and discounts available.
In England and Wales, most properties are entitled to an initial exemption period of three months, after which empty property rates are charged at 100% of the normal business rates liability. There is an exception for qualifying industrial hereditaments extending the exempt period to six months.
The standard empty property rate is applied after three months of the property being vacant in England, Northern Ireland and Wales, however with varied timeframes in Scotland. In Northern Ireland most properties are eligible to 50% vacant rates relief following an initial three month exemption period after a property becomes vacant.
Property owners who meet certain criteria may qualify for exemptions and discounts.
The rules governing empty property rates are complicated and may differ depending on the location and type of property. Please contact us if you’d like help determining the specific rules and exemptions that apply to your property.
Yes, certain types of properties and organisations are eligible for exemptions and reliefs. Small businesses, for example, may be eligible for Small Business Rate Relief, and charities may be eligible for Charitable Rate Relief. Empty properties may also qualify for a period of exemption before business rates are due. View our Business Rates Data Card for all exemptions and reliefs
Small Business Rates Relief (SBBR) is a government initiative in England and Wales which offers a reduction in the amount of business rates that a small business owner must pay. The SBRR programme is intended to assist small firms who may have difficulty paying their business rates. If your company qualifies for SBRR, you’ll receive a discount on your business rates, which may be a sizeable sum.
The Scottish government offers the Small Business Bonus Scheme which provides relief to qualifying ratepayers on a scale of 0% to 100% dependant on the accumulative Rateable Value of the ratepayer’s business. Learn more about the Small Business Bonus Scheme.
Northern Ireland offers a Small Business Rates Relief, currently extended annually.
