Calculating your business rates
Your rates bill is calculated by applying a multiplier to the rateable value of the premises.
The rateable value is set by the Valuation Office Agency (VOA) and it is shown on your bill. The VOA draw up and maintain a full list of all rateable values, visit the:
The rateable value of your property broadly represents the yearly rent the property could have been let for on the open market on a particular date. The current revaluation that comes into effect on 1st April 2017 uses information taken on 1st April 2015.
The valuation office may alter the value if circumstances change. The ratepayer (and certain others who have an interest in the property) can appeal against the value shown in the list if they believe it is wrong.
Business rates revaluation
On 1 April 2017, the Valuation Office Agency (VOA) updated the rateable value of all business properties. This is known as revaluation and it is usually done every 5 years in England and Wales, to maintain fairness in the system by redistributing the total amount payable in business rates, reflecting changes in the property market. Revaluation does not raise extra revenue overall. GOV UK has more information on business rates revaluation.
Appealing your 2017 rateable value
From April 2017 the Valuation Office Agency introduced a new process for business rates appeals called Check, Challenge, Appeal.
- Stage 1: the ratepayer must check and agree their property details against the information on the VOA website and raise any discrepancies with the VOA. Your case will remain at this stage until you have reached agreement which can take up to 12 months to complete
- Stage 2: you will have 4 months to register your challenge to the rateable value of your property and provide the VOA with your grounds for the challenge. It could take up to 18 months to work through this stage and the VOA will write to you with their decision
- Appeal decision: if you want to appeal the decision you will have four months to appeal and there will be a fee, which will be refunded if your appeal is successful
For more information please visit how to check and challenge your rateable value on Gov.uk website
You do not have to be represented to make an appeal. If you wish to be represented, take great care when appointing a rating advisor. Check that they are knowledgeable and experienced and have appropriate indemnity insurance. Members of the following institutes are qualified and regulated by rules of professional conduct:
- Royal Institution of Chartered Surveyors (RICS) and
- the Institute of Revenues Rating and Valuation (IRRV)
Multipliers for the rateable value
There are two multipliers which are set by the Government from 1 April each year. Your business rates bill is calculated by applying the appropriate multiplier to the rateable value.
For the year starting 1 April 2020 the multipliers are:
- 0.512 is the standard multiplier used for rateable values of £51,000 and above
- 0.499 is the small business multiplier used for most rateable values of £50,999 or less
The Government normally changes the multiplier every year to move in line with inflation. By law, the multiplier cannot go up by more than the rate of inflation, except in the year of a revaluation when 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.
Transition scheme 2017
For those ratepayers who would otherwise have seen significant increases in their rates liability, the Government put in place a £3.6 billion scheme to limit and phase in changes in rate bills as a result of the 2017 revaluation. To help pay for the limits on increases in bills, there were also limits on reductions in bills.
Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due.
The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1 April 2017, transitional arrangements will not normally apply.
The transitional arrangements are applied automatically and are shown on your bill. For more information on transitional relief please:
- visit the Gov.uk website
Small business rate relief from 2017
A new small business rate relief scheme came into effect on 1 April 2017. Many businesses with rateable values below £12,000 will pay nothing. Those with rateable values between £12,001 and £14,999 will receive relief on a sliding scale and most of those with RV’s below £51,000 will benefit from having their charge calculated using the small business rate multiplier.
Examples of calculations
- RV x small business multiplier £19,000 x 0.499 = £9,481.00 rates payable
- RV x standard multiplier £55,000 x 0.512 = £28,160.00 rates payable
Small business rate relief:
- RV x small business multiplier £14,000 x 0.499 = £6,986.00 payable before relief
- Small business rate relief on a sliding scale £4,658.00 rates payable and £2,328.00 relief