Business Rates

Non-domestic ratesNon-domestic rates, or business rates, are the way by which businesses, and others who occupy non-domestic properties, contribute towards the costs of local services. The rates are pooled by Central Government and redistributed to local councils according to the number of people living in the area, except in the City of London where special arrangements apply.  This money, together with council tax revenue, revenue support grants from the Government and certain other sums, is used to pay for the services provided by the council.

Rateable valueApart from properties that are exempt from business rates, each non-domestic property has a rateable value set by the Valuation Office Agency (VOA), an agency of the Inland Revenue which draws up and maintains a full list of all rateable values.  The rateable value of your property is shown on the front of your bill and broadly represents the yearly rent the property could have been let for on the open market on a particular date.  For the revaluation that came into effect on 1 April 2005, this date was set as 1 April 2003.

The Valuation Office Agency maintains the list and may alter the value if they believe that the circumstances of the property have changed.  The ratepayer, and certain others who have an interest in the property, can also appeal against the value shown in the list if they believe it is wrong.  Further information on the grounds for making an appeal, and on how to make one, are on the Valuation Office Agency's website or from your local valuation office.

The effect of successful appeals are normally backdated to the beginning of the financial year in which they are made, although there are exceptions to this.

National non-domestic rating multiplierWe work out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier.  From 1 April 2005 there are two multipliers: the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The former is higher to pay for small business rate relief. The Government sets the multipliers for each financial year for the whole of England and normally changes both multipliers every year in line with inflation. By law the multiplier cannot go up by more than the rate of inflation, apart from some minor adjustments to counteract losses from appeals and, in relation to the standard multiplier, to pay for small business rate relief. In the year of a revaluation it is set at a level which will keep the total amount raised in rates after the revaluation the same as before, plus inflation for that year.  The current multiplier is shown on the front of your bill.

Transitional arrangementsProperty values normally change a good deal between each revaluation and transitional arrangements help to phase in the effects of these changes by setting a limit on increases in bills.  To help pay for these there also have to be limits on reductions in bills.  Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the multiplier).

The scheme applies only to the bill based on a property at the time of revaluation.  If there are any changes to the property after 1 April 2005, transitional arrangements do not normally apply to the part of a bill that applies to any increase in rateable value due to those changes.  Any transitional adjustments are shown on the front of your bill.

Further information about transitional arrangements is on the website www.mybusinessrates.gov.uk.

Rating advisersYou do not have to be represented in discussions about your rateable value or rates bill and appeals can be made free of charge. 

If you do wish to be represented, members of the Royal Institution of Chartered Surveyors (RICS) and the Institute of Revenues Rating and Valuation (IRRV) are qualified and 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 great care and, if necessary, seek further advice before entering into any contract.

Further informationFor more information about any of the above contact the business rates section on 01782 238274.

Federation of Small Businesses (FSB)

This is the largest campaigning pressure group promoting and protecting the interests of the self-employed and owners of small businesses. Formed in 1974, it now has over 190,000 members across 33 regions and 230 branches. It offers assistance and support 24 hours a day, whilst its lobbying arm - led by the Westminster Press and Parliamentary office - applies pressure on MPs, Government and Whitehall, lobbies politicians in the constituences and puts the FSB viewpoint over to the media. It is a non-political organisation.

Follow this link to visit the Federation of Small Businesses website.