Business Rates Explained
Non-domestic rates, or business rates collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services. Under the business rates retention arrangements introduced from 1 April 2013, authorities keep a proportion of the business rates paid locally. The money, together with revenue from council tax payers, locally generated income and grants from central government, is used to pay for the services provided by local authorities in your area. Further information is provided in our Financial Management Information.
Non-Domestic Rates (NNDR) or Business Rates are normally paid by the person or business who occupies the property or who are responsible for an empty business property. You’ll probably have to pay business rates if you use a building or part of a building for non-domestic purposes.
Business rates are charged on most non-domestic properties. For example:
- holiday rental homes or guest houses
More information on how your business rates are spent.
Calculating NNDR - the following factors will affect your NNDR bill:
|The Rateable Value of your property set by the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs|
The Valuation Office Agency (VOA) compile and maintain a full list of all rateable values. The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date specified in legislation.
To estimate a charge for a business property visit the gov.uk website page: Estimate your business rates.
The Valuation Office Agency may alter the valuation if circumstances change. The ratepayer (and certain others who have an interest in the property) can also check and challenge the valuation shown in the list if they believe it is wrong.
Further information about the grounds on which challenges may be made and the process for doing so can be found gov.uk website: Find and check your business rates valuation.
|The National Non-Domestic Rating Multiplier set by Government|
The local authority works out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier. There are two multipliers: the national non-domestic rating multiplier and the small business non-domestic rating multiplier.
Ratepayers who occupy a property with a rateable value which does not exceed £50,999 (and who are not entitled to certain other mandatory relief[s] or are liable for unoccupied property rates) will have their bills calculated using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier.
The multiplier for a financial year is based on the previous year’s multiplier adjusted to reflect the Consumer Price Index (CPI) inflation figure for the September prior to the billing year. The current multipliers are shown on the front of your bill.
To estimate you business rates bill and to view the current and previous multipliers please visit the gov.uk webpage: Estimate your business rates.
The Valuation Office Agency (VOA) regularly updates the rateable values of all business and other non-domestic properties (properties that are not just private homes) in England and Wales. This is called a revaluation.
Rateable values are the amount of rent a property could have been let for on a set valuation date. For the 2023 valuation, that date was 1 April 2021.
We use these rateable values to calculate business rates bills.
Revaluations are carried out to reflect changes in the property market, which means that business rates bills are based on more up-to-date information.
The next revaluation will come into effect on 1 April 2023.
Contacting the Valuation Office Agency
We are responsible for anything to do with your business rates bill. The VOA is responsible for the valuation of your property. You will therefore need to contact the VOA for all queries about your rateable value.
Finding your rateable value
You are now able to see the future rateable value for your property and get an estimate of what your 2023/24 business rates bill may be. You can do this through the VOA’s Find a Business Rates Valuation Service on GOV.UK.
Your property details need changing
To tell the VOA about changes to your property details (such as floor area sizes and parking) you need a business rates valuation account. The VOA may accept your changes and update the current and future valuations.
You think your rateable value is too high
From 1 April 2023, you will need to use a business rates valuation account to tell the VOA you think your rateable value is too high. You must continue to pay your business rates as normal until a decision has been made.
Sign in or register for a business rates valuation account ready for 1 April 2023.
How Coronavirus (COVID-19) affected future rateable values
The VOA bases most rateable values on an estimate of what it would cost to rent a property for a year, starting on a certain date.
For the 2023 valuation, that date was 1 April 2021. This was during the pandemic and the rent information the VOA used reflected this.
Business Rate Reliefs|
Depending on individual circumstances, a ratepayer may be eligible for a reduction to their business rates bill.
Further detail on reliefs are provided in our business rates section.
Small Business Rates Relief|
If a ratepayer’s sole or main property has a rateable value which does not exceed an amount set out in regulations, the ratepayer may receive a percentage reduction in their rates bill for this property of up to a maximum of 100%. The level of reduction will depend on the rateable value of the property and the number of business properties you or your business have within England.
Generally, this percentage reduction (relief) is only available to ratepayers who occupy either:
The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set in regulations. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a fixed additional period.
More information is provided on gov.uk at: Local government: Business rates - detailed information.
Certain changes in circumstances may affect your entitlement to a reduction. Examples of the types of changes which should be notified are:
To notify us email firstname.lastname@example.org
Unoccupied Property Rate Relief||
Business rates are generally payable in respect of unoccupied non-domestic property. However, they are generally not payable for the first three months that a property is empty. This is extended to six months in the case of certain other properties. For example industrial premises or listed buildings.
More information is available in our business rates and reliefs section.
Partly Occupied Property Relief|
A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied.
Where a property is partly occupied for a short time, in some cases the partly occupied property relief may be available. Please note: this will only apply to the part of the property that is unoccupied.
More information is available in our business rates and reliefs section.
Charity and Community Amateur Sports Club Relief|
Charities and registered Community Amateur Sports Clubs are entitled to 80% relief where the property is occupied by the charity or the club. The property must be wholly or mainly used for the charitable purposes of the charity or other charities. It must also be only used for the purposes of the club, or other clubs.
The local authority has discretion to give further relief on the remaining bill.More information is available in our business rates and reliefs section.
Transitional Rate Relief|
At a revaluation, some ratepayers will see reductions or no change in their bill whereas some ratepayers will see increases.
Transitional relief schemes are introduced at each revaluation to help those facing increases.
This relief has been funded by limiting the reduction in bills for those who have benefitted from the revaluation. Transitional relief is applied automatically to bills.
Further information about transitional arrangements can be found in our business rates and reliefs section.
Hereditaments that meet the eligibility for Retail, Hospitality and Leisure scheme will be occupied hereditaments which meet all of the following conditions for the chargeable day:
They are wholly or mainly being used:
At the Autumn Statement on 17th November 2022, the Chancellor of the Exchequer announced that the current relief of 50% would be increased to 75% from 1st April 2023 for eligible ratepayers.
The previous Retail, Hospitality and Leisure schemes were –
01 April 2020 to 31st March 2021 100% relief
01 April 2021 to 31st June 2021 100% relief
01 July 2021 to 31st March 2022 66% relief
01 April 2022 to 31st March 2023 50% relief
The 2023/24 scheme will provide eligible occupied retail, hospitality and leisure properties with a 75% relief up to a cash cap limit of £110,00 per business.
Ratepayers who are eligible and currently in receipt of RHL will have their accounts automatically updated and notified via their annual bills. All ratepayers will be required to complete a cash cap declaration that will be included with their annual bill.
The local authority has discretion to grant discretionary local discounts. They can also give hardship relief in specific circumstances.
Full details and application forms found in our business rates and reliefs section.
Subsidy Allowance (previously known as State Aid).|
The EU State aid rules no longer apply to subsidies granted in the UK. This is following the end of the transition period on 31 December 2020.
This does not impact the limited circumstances in which State aid rules still apply under the Withdrawal Agreement, specifically Article 10 of the Northern Ireland Protocol.
The United Kingdom remains bound by its international commitments, including subsidy obligations set out in the Trade and Cooperation Agreement (TCA) with the EU.
This scheme is covered by 3 subsidy allowances:
Grants under these three allowances can be combined for a potential total allowance of up to £10,935,000. This will be subject to exchange rates.
Rate Relief for Businesses in Rural Areas.|
Certain types of properties in a rural settlement with a population below 3,000 may be entitled to a discount.
The property must be:
The only general store;
the only post office;
or a food shop.
These type of properties must have a rateable value of less than £8,500.
The only public house;
the only petrol station.
These type of properties must have a rateable value of less than £12,500.
The property has to be occupied.
An eligible ratepayer is entitled to relief of the full charge. The local authority has discretion to give further relief on the remaining bill.
Full details can be obtained from the Isle of Wight Council Business Rates department by emailing email@example.com
Paying your NNDR
Payment of business rate bills is automatically set on a 10-monthly cycle.
However, the Government has put in place regulations that allow businesses to require their local authority to enable payments to be made through 12 monthly instalments.
If you wish to pay in 12 monthly instalments please complete our online Business Rates 12 Monthly Instalments Form.
Any enquires please email: firstname.lastname@example.org
Further information for business rate payers
Rating advisers - Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. However, ratepayers who do wish to be represented should be aware that members of the following organisations are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct:
- Royal Institution of Chartered Surveyors (RICS)
- Institute of Revenues, Rating and Valuation (IRRV)
Before you employ a rating adviser, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.
Information supplied with demand notices - Information relating to the relevant and previous financial years in regard to the gross expenditure of the local authority is available in our Financial Management section.
Waste collection - All businesses including those operating from home, have a legal responsibility to safely contain and dispose of any waste produced as a result of their business. All businesses have a duty to organise and pay for regular waste collections. This legal responsibility also extends to holiday let properties. These are classified as commercial waste producers under the Controlled Waste Regulations (2012). This definition applies regardless of whether the premises are liable for business rates or council tax. for more information you should contact our commercial waste services.
Change in circumstances - You must inform us when:
- you move or make changes to your premises
- the nature of your business changes
If your property is due for a refit or refurbishment, please contact us prior to the work so that an inspection can be carried out.
If your property becomes empty please contact us immediately. Exemptions will not be granted retrospectively.
You can send a message to inform us of these changes.
If your property is available for short-term holiday let for 140 days or more a year, it may be rated as a self-catering property and is liable for Business Rates.
You will need to complete our online Business rates application form. the form must be completed before a request can be made to the Valuation Office Agency to assess your property within Business Rates.
In March 2022 the UK Government announced changes to the eligibility rules for whether a property can be assessed as a self-catering property and then valued for Business Rates rather than Council Tax.
The new eligibility rules come into force on 1 April 2023. For assessment purposes the Valuation Office Agency will look at letting information from the previous operating year. Owners of self-catering properties need to be aware that it is the availability and actual letting of their property during 2022-23 that will determine whether they are eligible for Business Rates rather than Council Tax.
In England, your property must be (all of the following):
The Valuation Office Agency are contacting customers to let them know about the new eligibility rules. They are delivering a mailshot to self-catering properties currently on the Rating List. After 1 April 2023 the Valuation Office Agency will contact owners by writing to their billing address to confirm their eligibility.
This rolling programme means the Valuation Office Agency will ask customers to provide information at different times during the 2023/24 operating year. They will use a universal date, from which they will assess whether the new eligibility rules have been met, of 1 April 2023.
The new rules will apply equally to all self-catering properties across England. New holiday lets will be liable for Council Tax each day until the property meets the eligibility rules.
Further information can be found online at the Valuation Office Agency and search ‘VOA business rates self-catering properties’.
Customers do not need to take any action at the present time. The Valuation Office Agency will ask for information in the Request for Information form which will be sent to property owners. The Valuation Office Agency will then consider whether they meet the new rules on the actual lettering for their property in 2022/23.
Moving premises or change of address - You need to inform us when:
- you move into a new business premises.
- you move out of a business premises.
- any other change in circumstances.
This is to make sure we are billing you for the correct amount of Business Rates.
We will need the following information from you:
- the new address of the business
- the date you purchased or leased the property
- the date you are moving into the property
- the name and address of your landlord if you are leasing the property
- the name of the business and to whom the bill should be addressed
You can inform us about these changes by reporting a change of address.
Working from home - If you work at or from home, you should be aware that the accommodation within your home. For example an office or workshop may be liable to business rates. Whilst the remainder of the property will continue to be liable to council tax. Although an alteration may be made to its banding.
There are many considerations that must be made in deciding whether a room in a house is to be used as an office or workshop. The Valuation Office Agency (VOA) will consider the effect of the extent and frequency of the non-domestic use of the room. They will also consider any modifications made to the property to accommodate that use. Each case is considered on its own merits. Normally a member of staff from the Valuation Office Agency will visit the property. They will check the facts before an assessment is made for non-domestic rates.