Please see below for some answers ot common queries around business rates.
The rateable value of a property is the amount of money a hypothetical tenant would pay in rent per annum as at the Antecedent Valuation Date (AVD). The AVD for the 2023 Rating List is the 1st of April 2021. In short, the rateable value of a property is the amount of rent that a tenant would pay for 1 years occupation of a property, on full repairing terms, as at the 1st of April 2021. All business properties have a rateable value, which is determined by the Valuation Office Agency which is part of HM Revenues and Customs.
You can look up your rateable value by going to the Valuation Office's website and entering your address details - click here to go there.
Alternately, your rates bill will have your Rateable Value on it. It may be next to a title of "RV" or "Rateable Value.
Yes. All commercial properties have a rateable value, determined by the Valuation Office Agency and they may change the rateable value of a property if they feel that circumstances have changed since the last valuation. Every appeal is different and each is judged on its own merits and circumstances.
In cases where the Valuation Office Agency and a business ratepayer are unable to reach agreement about a change in rateable value, the matter can be referred as an appeal to a Valuation Tribunal.
Business Rates can seem daunting so we’ve explained the basics below, if you’re still confused though please don’t hesitate to contact us directly.
How are my Business Rates Calculated?
There are two steps to calculating the total amount owed each year in Business Rates on a property. These are :
The Rateable Value - the rateable value of a property is the amount of money a hypothetical tenant would pay in rent per annum as at the Antecedent Valuation Date (AVD).
The AVD for the 2023 Rating List is the 1st of April 2021. In short, the rateable value of a property is the amount of rent that a tenant would pay as at the 1st of April 2021 but with the property in the physical condition and circumstances as at the 1st of April 2023.
The Uniform Business Rate - This is a multiplier which is calculated each year by the government. The multipliers are between 49.9p and 51.2p in the pound depending on how large your Rateable Value is.
The Rateable Value is then multiplied by the National Non Domestic Multiplier to give the total owed. Deductions such as Small Business Rates relief or Retail Relief are then made.
A shop with a Rateable Value of £20,000 would pay 0.499 x £20,000 = £9,980.
Why are my Rates more than my rent?
Your Rateable Value reflects what the Valuation Office feel a hypothetical tenant would have paid for your property as at the 1st of April 2021. Since this time markets have changed but we still value to this date for the purposes of Rates.
This isn’t fair – what can I do?
There are a number of steps you can take to reduce your rates bill but the most basic two are below :
The first is to appeal your existing Rating Assessment. You can find your rating assessment by going to the Valuation Office website and searching for your property
Secondly, if something happens in the local area that affects your trade and thus the rental value of your property, you can appeal. This is known as a Material Change in Circumstance. There is a long and complex history of case law around such situations and we would advise that you contact us directly to see if you have a case.
There is more information on Material Changes further down this page.
Yes, rates are payable on the basis of the rateable value currently appearing in the list and you remain liable to pay the account sent to you until such time as the rateable value in the list is amended. If the value is reduced, any over payment will be refunded.
You may see "Transitional adjustment" or "Transitional payment" on your bill.
All rateable values are reassessed at each rating revaluation, the last one taking effect from 1st April 2023. 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 prescribed percentages each year.
In short, if you have a large increase in RV between lists then the increase is reduced whereas if you have a large decrease in your rateable value the full impact of the decrease will be reflected in your business rates bill.
Liability to pay Business Rates rests with the person entitled to beneficial occupation (i.e. the occupier) of a property, irrespective of any third party agreement. You should discuss this with your landlord, as agreements between Landlords and their Tenants are a matter between themselves and are not binding on a Local (or Billing) Authority in the event of any dispute between those parties.
Should a tenant pay a rent that includes Rates, but the landlord does not pass those payments to the Council, the Tenant will still be liable to pay and may then have to take action to recover the monies paid to the landlord against the landlord.
The next Rating List is expected to come into effect on the 1st of April 2026 and have an Antecedent Valuation Date of the 1st of April 2024.
A proposal for a reduction in assessment because of a Material Change of Circumstances (MCC) can only be made under regulation 4 (1)(b) of the Non Domestic rating (Alteration of Lists and appeals)(England) Regulations. This states that a proposal may be made if:
“ The rateable value shown in the list for a hereditament is inaccurate by reason of a material change of circumstances which occurred on or after the day on which the list as compiled”.
The existing 2023 Rating List was compiled on the 1st of April 2023, therefore a MCC proposal concerns matters that have changed since this date. The matters to be considered are listed below and an MCC must affect one of these five matters:
“The matters are—
a - matters affecting the physical state or physical enjoyment of the hereditament,
b - the mode or category of occupation of the hereditament,
c - the quantity of minerals or other substances in or extracted from the hereditament,
d - matters affecting the physical state of the locality in which the hereditament is situated or which, though not affecting the physical state of the locality, are nonetheless physically manifest there, and
e - the use or occupation of other premises situated in the locality of the hereditament.”
(Schedule 6 para 2(7) of the Local Government Finance Act 1988)
Some appeals based on a Material Change of Circumstance are more clear cut than others but the basic facts to first establish are what is the MCC, what is the duration and what effect has it had. Key to all of this is proving the effect of an MCC.
MCC’s can be permanent or temporary. A common example of a temporary MCC would be extensive roadworks outside a property lasting more than 6 months. However, roadworks lasting a week or two would not – the works would be seen as too transient.
An example of a more permanent MCC would be the change of use of a property locally or a permanent change which affects the accessibility of the premises.
To prove the impact of an MCC supporting evidence will be required. The evidence presented to the Valuation Office will depend on the nature of the MCC and its impact. Some common examples of evidence required to prove the extent and impact of an MCC are listed below :
So, where there have been alterations to the property then plans should be provided to the Valuation Office along with any other supporting documentation, e.g. building regulation certificates.
In the case of a new supermarket/superstore opening near a high street then trade receipts would be the best form of evidence.