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How Business rates are calculated

Business rates, also known as non domestic rates are a contribution from businesses towards the cost of local services. Although collected by local authorities the money is pooled by central government and redistributed to councils on the basis of their need.

The gross rates payable on each property depend on the rateable value and the national non domestic multiplier. There are also a number of types of relief from rates which can be applied to individual accounts (see below).

Rateable Value

The rateable value of a property broadly represents the yearly rent that a property could have been let for on the open market on a particular date. For the current rating list, which came into effect on 1st April 2010 this date was 1st April 2008. The value is calculated by the Valuation Office Agency (VOA)  which is part of HMRC. They can alter the value if circumstances change, and the ratepayer can appeal against the value if they believe that it is wrong. Further information, including details of how the value of most properties has been calculated and the grounds and process for submitting an appeal can be found on the VOA website, www.voa.gov.uk

National Non Domestic Multiplier

The rateable value is multiplied by the appropriate multiplier to calculate the rates payable, before any relief is applied. The multipliers are set each financial year by the Government, and usually rise each year by the increase in the Retail Price Index for the preceding September. The multipliers for 2013-14 are 0.462p in the £ for occupied properties with a rateable value of under £18000 and 0.471p in the £ for all  empty properties and occupied properties with a rateable value of £18000 or over.

Transitional Arrangements

All rateable values are reassessed every five years. To prevent ratepayers experiencing large increases in the amount due as a result of a national revaluation there are transitional arrangements which limit the annual increase to a prescribed percentage each year. To help pay for this the amount by which a bill can reduce as a result of revaluation is also limited.

Further information about the business rate system may be obtained from the Business Link website opposite. 

Frequently asked questions

Why is my rateable value higher than my rent?

The current rateable value is intended to be an estimate of the annual rent that a property would have received at 1st April 2008.If rents have fallen since then because of the economic situation the rateable value will not necessarily be reduced as well. The next revaluation, effective from 1st April 2015, will be based on the rent passing as at 1st April 2013, so any reduction in rents will be reflected then. Further information on how the rateable value has been calculated is available on the Valuation Office website.

Valuation Office Agency website

I have appealed against my rateable value - do I still have to pay?

Yes. Rates are payable based on the rateable value which appears in the current Rating List and if you do not pay as shown on your bill, further action will have to be taken, even though an appeal may be outstanding. If your appeal is successful and your rates are reduced, interest may be payable on any overpayment.

What services do I receive in return for paying my Business Rates?

Your rates are not a payment for specific services but are a contribution from businesses towards all of the services provided by the Council for the community, such as local transport, education and housing, all of which indirectly benefit businesses in the area.

Why have you sent me a Reminder/Summons?

By law, the Council must send a Reminder if your instalments are not up-to-date. If you do not bring them up-to-date within 7 days and then keep them up to date, you lose the right to pay by instalments. If you do not comply with the Reminder, you will be sent a Summons and will have to pay court costs as well as your Business Rates.

If you receive a Summons and do not pay in full before the hearing, the Council will apply for a ‘liability order’. A liability order gives the Council the right to use bailiffs to obtain payment, to start Bankruptcy/Liquidation proceedings in certain circumstances, or to ask the Magistrates Court to commit a person to prison.

I have moved out of my business property - will I still have rates to pay?

From 1st April 2008 the legislation changed relating to unoccupied business premises. For the first 3 months there will be no rates payable (the first 6 month for industrial properties) but, if the property remains vacant after this period and you are still the owner or leaseholder, you will then be liable for rates. Rates are chargeable on all empty unoccupied property, unless the property is classed as exempt. Information on the properties classed as exempt can be found on our empty property rates page