How Are Business Rates Calculated?

The amount of rates payable takes two factors into account, the rateable value of a property and the 'multiplier' or 'poundage'.

Rateable values are determined by the Valuation Office Agency, which is an executive agency of the Inland Revenue.

Rateable values are usually reviewed every five years to reflect market values. This is called revaluation. The most recent revaluation of all rateable values took effect from 1st April 2017 and was carried out by the Valuation Office Agency.  

The multiplier is a figure worked out by the Government for each financial year (1st April to 31st March). Currently the multiplier changes annually in line with inflation.

We work out the bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers for 2018/2019:

1. The standard non-domestic rating multiplier which is 49.30p in the pound (rates calculated on businesses with a rateable value over £51,000).

2.The small business non-domestic rating multiplier which is 48.00p in the pound (rates calculated on businesses with a rateable value under £51,000).

The final bill may be subject to the government's transitional relief scheme. This works by comparing the amount of Business Rates that were paid in the previous year with the rate that is due in the current year and limits the percentage increases or decreases. Details of any relief will be shown on your bill. 

What discounts and reductions are available?

Transitional Relief is an adjustment to the bill where rates increase significantly following a revaluation in order to phase in the change gradually. If rateable values decrease significantly a transitional surcharge can apply where the full decrease is phased in gradually.

A new transitional relief scheme was introduced at 1st April 2017 following the revaluation of rateable values. Full details about this scheme can be found in the Business Rates leaflet.

Mandatory and Discretionary Relief are reductions to your Business Rates for a property occupied by a registered charity or by a non-profit making organisation. Relief may also be given to Post Offices or similar small community operations in rural areas.

Small Business Rate Relief was introduced from 1st April 2005. If you have a business with a rateable value less than £15,000 you may be able to qualify. For advice on how the scheme works and how to claim see our Small Business Rate Relief page.

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