Everything you need to know about what business rates are, how you calculate them and what your overall bill could be.
- What are Business Rates?
- Who Pays Business Rates
- How Do I Calculate Them?
- What Business Relief Schemes are there?
- What If I Work From Home
- Who To Help You With Your Business Rates
What Are Business Rates?
Business rates are tax on the property that is used to run a business. Rates can be charged on properties such as offices, retail shops, pubs or industrial warehouses.
Who Pays Business Rates?
Business rates are payable on both occupied and empty premises, this means either the landlord who owns the building or the occupying business would be liable for business rates.
How Do I Calculate Them?
The way business rates are calculated is using the ‘’rateable value’’ of the property you occupy , this is set by the Valuation Office Agency. The rateable values are then used by your local council to determine your business rates bill, you can find your business rates valuation ‘here’. You can also check if you’re business rates are incorrect as well by undertaking a ‘rates valuation’.
The Current business rate multiplier values are:
- Standard Business Rates Multiplier – 47.9p
- Small Business Rates Multiplier – 46.6p
- Small Business Rates Threshold – £51,000
- Properties rateable value – £21,250
- 21,250 x £0,46.6p = £9,902.50
- Business Rates Payable = £9,902.50
What Business Relief Schemes Are There?
Under the business rates laws, there are several schemes for business which discounts business rates. These include small business, rural, charitable, enterprise, or hardship relief. The most prominent rates relief scheme is the small business scheme, this means if the property you occupy has a rateable value of under £12,000 you will not need to pay any business rates. For properties with a rateable value of between £12,001 and £15,000 the discount will decrease from 100% to 0%, so if you’re rateable value is £13,500, you’ll receive a discount of 50%.
What If I Work From Home?
If your business is home-based you do not have to pay business rates, there are some exceptions in this case however, these include:
- If you use a section of your home for your business, i.e a home office.
- Selling and sending goods by post.
- Your property is part business and part domestic.
- Selling goods or services to customers who visit your home.
- You employ other people to work at your home.You have converted a section of your home for business use.
Who To Help You With Your Business Rates?
If you would like expert advice on business rates, you can get help from a qualified rating surveyor, either through the Royal Institution of Charted Surveyors (RICS), Institute of Revenues, Rating and Valuation (IRRV) and the Rating Surveyors Association.
It’s important to seek help and advice on business rates especially if you’re liable for high business rates cost, as there is a level of subjectivity when valuing a property business rates. Examples of this can be seen in the retail industry, where factors such as the width and depth of a retail store can be complex and would need a third-party valuation to confirm the appropriate rateable value.