Business rates - frequently asked questions
Additional Support for Business Ratepayers Spring Budget 2017
The Budget announced a number of measures, which affect Non Domestic Rate bills. These are listed below:
Supporting small businesses
This relief will help those ratepayers who as a result of the change in their rateable value following the 2017 national revaluation are losing some or all of their small business or rural rate relief and, as a result, are facing large increases in their bills. This relief will ensure that the increase per year in the bills of these ratepayers is limited to the greater of:
- a cash value of £600 per year (£50 per month). This cash minimum increase ensures that those ratepayers currently paying nothing or very small amounts are brought into paying something, or
- the matching cap on increases for small properties (with a rateable value of £20,000 or less) in the transitional relief scheme
Discretionary relief scheme
Local Authorities in England will be given a share of a £300m discretionary rate relief hardship fund to target individual hardship cases in their local areas. The £300m will cover the four years from 2017/18:
- £175m in 2017/18
- £85m in 2018/19
- £35m in 2019/20
- £5m in 2020/21
Each Local Authority's scheme for 2017/18 can be found on this page. Please see related downloads. The schemes for 2018/19 have not been finalised and require each Local Authority's council approval. Your annual bill for 2018/19 will not show any of this relief and your liability will only be adjusted once the details of the scheme have been approved by each council, therefore please make payment based upon the annual 2018/19 bill.
If you qualify under the new criteria you will receive an amended bill showing revised payments. When details of the 2018/19 scheme are known further information will be shown on this web page.
Support for pubs
The Government has also announced a relief scheme for pubs that have a rateable value below £100,000. Under the scheme, eligible pubs will receive a £1000 discount on their bill. The relief will have effect for 2017/18 and 2018/19.
How to apply
Where possible amended bills will automatically be issued based upon the information that is currently held in the business rate system.
If you have not been awarded rate relief and you wish to apply then please contact your local councils business rate team who will be able to advise you.
Who pays business rates?
The occupier of the non-domestic property normally pays the business rates. Usually this is the owner-occupier or the leaseholder.
If a property is empty and unused there will not be any business rates to pay for the first three months (or six months for industrial premises). If there is a change of owner during or after the exemption period, then the exemption period does not re-commence. The new owner may benefit from any remaining time within this three month period but otherwise a new owner will be immediately liable to pay an empty property rate.
After the exempt period, an empty property rate, which is 100% of the normal bill becomes payable. To qualify for a new exemption period the property must have been occupied continuously for six weeks prior to it being vacated again.
For small properties with rateable values less than £2,900 and for listed properties there is no charge for empty property rates even after the first three months have passed.
What will happen if I don't pay?
If you miss an instalment you will get a reminder notice giving you seven days to bring your payments up to date.
If you do not bring your payments up to date or fall behind again later, you will have to pay the full outstanding balance on your account.
If you do not pay the outstanding balance, a summons will be sent to you which means that costs will be added to your account.
After sending a summons, we will ask the magistrates court to issue a liability order which can be sent to an enforcement agent if you do not make a payment arrangement with us or you fail to make the payments you have promised. If your case is passed to an enforcement agent, more costs will be added to your account. Please note that new regulations were introduced in 2014 regarding enforcement agents and their fees.
If you are having difficulty paying your business rates, please contact your local council as soon as you can so that we can discuss payment options with you.
How is the business rate calculated?
The council works out the business rate bill by multiplying the rateable value of the property by the multiplier which the Government sets each year. The multiplier applies to every non-domestic property in England.
The Government changes the multiplier every year 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. The current multiplier will be shown on your bill.
The amount calculated may be reduced or increased if transitional arrangements apply to your property. The bill may also be reduced if you are entitled to any rate relief.
What's transitional relief?
Following the introduction of business rates on 1 April 1990, many ratepayers faced large increases in the amount they would have to pay, while others anticipated considerably reduced bills.
To cushion the blow for businesses facing large increases, the Government introduced legislation to limit the amount the business rate could go up. This scheme, known as transitional relief, is financed by also placing a limit on the amount that rates can go down.
This phasing scheme normally recommences with each new revaluation period.
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 the revaluation date, transitional arrangements will not normally apply to the part of a bill affected by any increase in rateable value due to these changes. Special rules apply when rateable values change or existing properties are merged or split. You can get further information about transitional arrangements from your local council.
What should I do if I decide to move?
Your local council will require the following information:
- the address of the property that you have vacated, along with the account number
- the date that you vacated the property
- the details of the owner of the property
- your forwarding address
- the date you will move goods into the new property
- the date of any subsequent property transfer, for example freehold or leasehold transfer
- the use for which the property is next intended
- any other information that may relate to your liability for business rates
The information will be used to determine your liability and, possibly, any exemptions or relief that you may be entitled to.
What is the rateable value and how can I find out what mine is?
All business properties have a rateable value, which is determined by the Valuation Office Agency (VOA) . The VOA is an executive agency of the HMRC with offices spread throughout England, Wales and Scotland. A full list of all rateable values are available on the VOA website.
Following the property revaluation that came into effect on 1 April 2017, the rateable value is representative of the annual rent the property could have been let for on the open market as at 1 April 2015. Further revaluations normally take place every five years to ensure that values are kept up to date and make sure that each bill is fair.
Are all businesses rateable?
Generally, business rates are payable on most commercial properties like shops, offices and hotels. Self-catering accommodation such as holiday homes are also liable for business rates where they are available for use by short stay guests for 140 days or more per year.
There is no liability to pay business rates on the following properties:
- public parks
- farm land and buildings
How can I appeal against my rateable value?
All business properties have a rateable value, which is determined by the Valuation Office Agency (VOA).
The Valuation Officer may change the rateable value of a property if he or she feels that circumstances have changed since the last valuation. The business ratepayer (and other parties who have an interest in a specific property) may also propose changes to the assessment.
If you think your rateable value is incorrect, you can find and view your property details online. You can check, challenge and appeal your business rates valuation on the website correct your business rates
Further contact details for the VOA are as follows -
The Valuation Office Agency
Non-domestic Rates South West
2nd Floor Temple Quay House
2 The Square
Email for Rating: email@example.com
Phone: 03000 501501
If you submit a request for a change to your rateable value, you must continue to pay in accordance with the instalments shown on your bill. Any necessary adjustments will be made when we are notified of the Valuation Officer's decision.
What happens if my rateable value changes?
If the Valuation Office Agency (VOA) amends your rateable value, they will notify you of the change in writing. We will recalculate your bill and work out the new amount that you have to pay. If your bill is subject to transitional arrangements you may find that a change in the rateable value of your property following an appeal makes no difference to the amount you pay.
If you submit a request to the VOA for your rateable value to be changed, you must continue to pay the instalments shown on your bill until a new value is agreed. Any amounts, which have been overpaid, will be refunded to you and may be subject to interest providing the council has not obtained a liability order at the magistrates court for non-payment of the business rate.
What does "...and Premises" refer to on the description of my property?
The vast majority of business properties have ".... and Premises" after the main description of the property, i.e. "Shop and Premises" or "Office and Premises". The ".... and Premises" refers to perhaps a storage area or a cloakroom facility used in connection with the business property and does not refer to any part of the property used for domestic living accommodation.
Do I have to employ a rating adviser to appeal against my rateable value?
You do not have to be represented in discussions about your rateable value. Appeals against rateable values can be made free of charge.
However, if you do wish to be represented you should be aware that the members of the Royal Institution of Chartered Surveyors and the Institute of Revenues Rating and Valuation are qualified and are 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.
What happens if the property is left unoccupied?
Empty rates are payable on a property if no part of the property is occupied and the property is not exempt or the rateable value is not less than £2,900.
There is no liability for rates where a property has been continuously unoccupied for a period of three months after it ceases to be occupied or from the day that it is determined as its 'completion date' in respect of new properties. Industrial property receives a 6 month rate free period before empty rates are charged. If after this rate free period, the property is sub-divided or there is a new owner, there is not another 'free' period.
Industrial property receives a 6 month rate free period before empty rates are charged.
Exemptions from empty rates
There are certain other circumstances where unoccupied property is exempt from empty property rates and you should contact your council if you think you may qualify -
- Empty properties owned by charities which when next in use will be used for a charitable purpose
- Empty properties owned by companies in liquidation or administration
- Where an unoccupied property is prohibited by law from occupation.
- Listed buildings are exempt provided that they are included in a list of buildings of special architectural or historic interest or subject to a building preservation notice under the terms of the Town and Country Planning Act 1971 and the Planning (Listed Buildings and Conservation Areas) Act 1990
- Personal representatives of deceased persons are exempt together with insolvency and debt administrators entitled to possession only in their respective representative capacities
- Ancient Monuments that are included in the schedule of monuments compiled under Section 1 to the Ancient Monuments and Archaeological Areas Act 1979