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How are Business Rates Calculated?

Calculator 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 normally change every five years to reflect market values. This is called revaluation. The last revaluation took place in 2005. Rateable values are based on the size of a property, and can change as a result of structural alterations to the business. The multiplier is a figure worked out by the Government for each rate year (1st April to 31st March). Currently the multiplier is only allowed to change each year in line with inflation.

For example, in 2007/08 the multiplier has been set at 44.4p. Therefore a business with a rateable value of £10,000 would have £4,440 rates to pay.

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. Unfortunately this works the opposite way if rateable values decrease significantly. In this situation, a transitional surcharge can apply.

Mandatory and Discretionary Relief are reductions to your Busniness 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.

To obtain information on these reliefs or make an application, either contact the Business rates Team on 01909 533460 or download a copy for the relevant relief: