HOW to calculate your business rates.

How to calculate your business rates

All you need to know about business rates payable and the impact for your start-up

Businesses that own empty property are exempt from empty property rates for the first three months.

What Are Business Rates

Business Rates also known as National Non-Domestic Rates are a tax on business properties. The tax set by the government and business rates collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services.

In a similar way that residents pay council tax, businesses pay business rates to local authorities, which help finance local services.

How to calculate your business rates

The Rateable Value (RV) of a property is the first element in the calculation of the rates bill. Until the current 2010 Rating List, evaluations took place every five years, however, in October 2012 the coalition Government announced that the assessment was to be postponed for two years with the new list coming into effect from 1st April 2017.

Assessments are carried out by the Valuation Office Agency (VOA) which is an executive agency of HM Revenue and Customs. The RV of a property reflects the annual rent that it could have been let for on the open market at 1st April 2008.

The second element in the rates bill is the multiplier, the Uniform Business Rate (UBR), expressed in pence per pound. The UK Government sets this for England and the National Assembly for Wales.

In each financial year, the UBR may be raised by a maximum of the inflation rate of the Retail Price Index (RPI) from the previous September. The primary business rate liability for a property is calculated by multiplying the RV of the property by the multiplier.

Who pays business rates?

Business rates are payable by the occupier, If you use a building or part of a building for non-domestic purposes, the part used for business will require payment of business rates, occupier on shops, offices, warehouses and factories. Farm land and buildings, Places of public religious worship, and other types of property are not rated and are therefore classified as exempt.

Furthermore, in case you make money working from home, you may pay business rates prices at the segment of your home that is used for work. You are more likely to have to pay business rates charges if a room is solely used for commercial enterprise, or if it has been adapted for business purposes.

Calculating your business rates

It is worth knowing how to calculate your business rates yourself to ensure you are paying the right amount. It is also useful to know if you want to plan your financial year ahead in a new property that you do not yet know the business rates of or if you want to know the business rates for a property you are thinking of moving your business into.

Relief schemes and how to qualify

The amount you pay may be decreased in case you are entitled to business rates charges relief. In a few cases, you may no longer need to pay.

These discounts handiest observe for your business rates bill and may not lessen your rent, water costs or other bills payments. Some relief schemes are automatic, but you will need to apply thru your local authorities in some cases.

Before any relief or discounts are deducted. These are reviewed every year by the government in line with inflation.

Estimate your business rates

England and Wales

Government(” According to the government ( Multiply the rateable value for your business with a ‘multiplier’ set by the government to estimate your business rates Example: Barbara has a business in England (outside the City of London). The rateable value of her business is £10,000, so she uses 2013 to 2014 small business multiplier for England (46.2p) to estimate her business rates as follows: £10,000 (rateable value) x £0.462p (multiplier) = £4,620 (basic business rates) She may also be eligible for small business rate relief as her rateable value is less than £12,000.


Use the Scottish government’s business rates calculator if you are in Scotland.

Northern Ireland

If you are in Northern Ireland, use the calculator on the Department of Finance and Personnel website.

How to pay your business rates bill

The local authorities will usually send you a business rates bill in March or April, and most local authorities will ask you to pay in equal month-to-month instalments.

Make sure you inform your local authorities if you start up a new business or if you move premises so that they can charge you the right amount.You may contact your local authorities if you think your bill is inaccurate.

If you do not inform the local authorities about this, Reminder will be issued. It is important that a Reminder is paid quickly. If not, further action may be taken and costs incurred.

Likewise, in case you are having cash flow issues and are finding it difficult to pay the bill, contact the local authorities because they may be able to change the amounts and dates of your payments to make things easier for your business.

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