How to work out your business rates

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    • 16 May, 2023
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Business rates are taxed on most non-domestic properties in the UK, including shops, offices, pubs, warehouses, factories, holiday homes, and guest houses. What you pay is based on the rateable value of your property, which the Valuation Office Agency (VOA) sets.

Here’s how you can work out your business rates. Follow these four steps to receive your estimation:

1. Find out your property’s rateable value

You can check your property’s rateable value using the VOA’s business rates checker. The current rates came into use from 1 April 2023 following 2023’s Business Rates Revaluation, based on April 2021’s rental value.

2. Check your property’s multiplier

Once you know your property’s rateable value, you need to find out the multiplier for your area and size of business. See our table below for guidance on your business rates multiplier.

Business rates multiplier

For businesses based in England, if your property has a rateable value lower than £51K you should use the small business multiplier for your calculation.

For London, the standard multiplier rate for 2023-24 is 51.3p and 52.6p for small businesses. London also levies a business rate supplement of 2p for properties with a rateable value of more than 75K.

3. Calculate your business rates

To calculate your business rates, multiply your property’s rateable value by the multiplier for your area and size of business. The result will be an estimate of your annual business rates bill. For example, if your business is located in England and the rateable value is £20K, you’d use the small business multiplier for 2023-24 of 49.9p.

£20,000 (rateable value) x £0.499 pence (multiplier) = £9,980 (business rate estimate)

4. Apply and eligible business rate relief

There are several types of business rate relief to be aware of, including:

Transitional relief

Your business will be eligible for transitional relief if your property is located in England and your rates rise by more than a certain amount after the Business Rates Revaluation (see our table below). Transitional relief means that any changes to your bill are phased in gradually.

If your bill is increasing from 1 April 2023:

Once your business reaches the amount set by the 2023 revaluation, you will stop receiving transitional relief. For those based in Wales, eligible businesses pay 33% of their additional liability in the 2023-24 tax year, 66% in 2024-25, and they then pay their full liability in 2025-26.

Small business rate relief

In England your business can claim for small business rate relief if the property’s rateable value is less than £15K (you don’t pay business rates on rateable values of £12K or less). For properties with a rateable value of over £12K to £15K, the rate of relief is tapered from 100% to 0% depending on the value.

For example, if your rateable value is £13.5K, you’ll get 50% off; if it is 14K, you’ll get 33% off; and if it is 15K, you’ll get 0% off.

You can also claim small business rate relief if your business only uses one property.

If you get another property, you keep receiving relief on your primary property for a year. After this time, you can still receive relief on this property if none of your other properties has a rateable value higher than £2,899 and the rateable value of all your properties isn’t higher than £20K (or £28K for London).

In Wales, business’ with a rateable value of up to £6K receive 100% relief. For properties with a rateable value of over £6K to £12K, the rate of relief is tapered from 100% to 0% depending on the value.

Other reliefs

There is also business rate relief for rural businesses, charities, retail, hospitality and leisure businesses, local newspapers and nurseries, as well as extra relief for businesses in enterprise zones or for those experiencing hardship.

There are exemptions for empty buildings and certain qualifying buildings such as farm buildings, buildings for training or the welfare of disabled people, buildings registered for religious worship. Speak to one of our Business Rates experts to learn more about these exemptions.

We can help you with your business rates estimation

Have a question about business rates? Reach out to one of our experts to find out how we can ensure that you’re not paying too much in taxes.

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