How are Business Rates Calculated?

Here’s a comprehensive guide on how business rates work, how to address issues with your rateable value, and the different rules depending on your location.

Rateable Value Calculation

1. Rateable Value:

• Definition: The rateable value is an estimate by the Valuation Office Agency (VOA) of how much it would cost to rent the property for a year, based on April 2021 rental values.

• Purpose: It serves as the basis for calculating business rates. The rateable value is multiplied by a national multiplier or business rates poundage set by the government to determine the amount of business rates payable.

2. Guidance:

• Estimate Your Business Rates: The VOA provides guidance and tools to estimate your business rates based on the rateable value. You can check your property's rateable value and use online calculators provided by the VOA or local council websites.

3. Eligibility for Relief:

• Business Rates Relief: There are various reliefs available that can reduce your business rates bill, including Small Business Rate Relief, Charitable Rate Relief, and Rural Rate Relief.

• Application: If your property is eligible, you may need to apply for relief through your local council. Each type of relief has its own criteria and application process.

4. Reduction:

• Impact on Bill: Reliefs and discounts can reduce the amount you owe, so ensure you apply for any you may be eligible for.

If You Think Your Rates Are Wrong

1. Using Your Business Rates Valuation Account:

• Update Details: If you believe your property details (e.g., floor area, parking) are incorrect, you can use your business rates valuation account to notify the VOA of changes.

• Rateable Value Dispute: If you think your rateable value is too high, you can also use this account to challenge it.

2. Providing Rental Information:

• Requests for Information: The VOA may request rental information about your property to assess its rateable value. This can include current rental agreements, property details, and market comparisons.

• Extension: If you need more time to gather and submit the required information, contact the VOA as soon as possible to request an extension.

3. Contacting the VOA:

• Dispute Resolution: Reach out to the VOA directly if you have concerns about your rateable value or need assistance with your valuation. They can provide guidance and help resolve disputes.

Regional Differences

1. Scotland and Northern Ireland:

• Different Rules: Business rates are handled differently in Scotland and Northern Ireland. Each region has its own set of rules, multipliers, and reliefs.

• Contact Local Authorities: For properties in Scotland or Northern Ireland, contact the relevant local authority or regional business rates office for specific guidance and information.

Key Takeaways

• Monitor Rateable Value: Regularly review your property's rateable value and ensure it's up-to-date.

• Apply for Reliefs: Check eligibility for any business rates reliefs that could reduce your bill.

• Address Issues Promptly: If there are discrepancies or if you need more time to provide information, act quickly and communicate with the VOA or local council.

Understanding how business rates are calculated and managed can help you better plan your finances and ensure you are not overpaying. For any uncertainties or disputes, don’t hesitate to seek advice from the VOA or your local council.