23rd January 2024 - James Burkitt

From 1^st April 2024, rates payers across the country will receive revised business rates bills to cover the period from 1^st April 2024 to 31^st March 2025. In this article, we have outlined some key considerations:- 

Step 1 - Multipliers

Business Rates liability is first calculated by multiplying the ‘multiplier’ by your 2023 Rateable Value.

2023 Rateable Value

Your 2023 Rateable Value should be shown on your bill however you can also check your business rates valuation on the Valuation Office Agency’s website here. If you think your 2023 Rateable Value is inaccurate you have the right to appeal through the Valuation Office Agency's Check, Challenge, Appeal system.

Multipliers

There are two main multipliers, the Small Business multiplier and Standard multiplier (please note there are also different multipliers if your property is located in the City of London or Wales):-

• For the 2024/25 billing year, the Small Business multiplier has remained at 49.9p in the pound and is applicable to 2023 Rateable Values below £51,000.
• The Standard multiplier has increased to 54.6p in the pound, in line with the inflation rate in September 2023 of 6.7%, and will be applicable to 2023 Rateable Values of £51,000 or more.

Whilst the announcement in the Autumn Budget of a nil increase in the Small Business multiplier has been welcomed by many small businesses, those with a Rateable Value of £51,000 or more will see a substantial increase in their business rates liability next year.

Step 2 - Reliefs

The next step is to deduct any rates reliefs applicable to your business/property. There are numerous business rates reliefs available however we have outlined some of the more common ones below:-

• Small Business Rates Relief
• Retail, Hospitality and Leisure Relief
• Transitional Relief
• Charitable Relief
• Empty Property Relief

There are differing criteria for how each relief is applied. However for this article, we have focused on two of the most common reliefs being Small Business Rates Relief and Retail, Hospitality and Leisure Relief:-

Small Business Rates Relief

In England, businesses who have one commercial property and a Rateable Value below £15,000 will be eligible for this relief. If you have a second property, you can still get relief on your main property if:-

• None of your other properties have a Rateable Value above £2,899.
• The total Rateable Value of all your properties falls below £20,000 (or £28,000 in London).

If your Rateable Value falls below £12,000 you will pay no rates and from £12,000 to £15,000 the relief is gradually tapered. i.e. at £13,500 50% will be deducted from your business rates bill.

Supporting Small Business Rates Relief

This relief is best illustrated through an example:-

You only occupy one commercial property. Your 2017 Rateable Value was £11,500 and your 2023 Rateable Value £15,500. 

You will have received the full benefit of Small Business Rates relief prior to 1st April 2023 and paid no business rates. From 1st April 2023, your liability could have been circa £6,000, rising to around £6,600 from 1st April 2024. However with Supporting Small Business Rates relief applied your liability is capped to increase by £600 a year, resulting in a 2023/24 bill of only £600 and a 2024/25 liability of £1,200.

However, if you were eligible for the 2022/23 scheme the relief will end on 31st March 2024.

Retail, Hospitality and Leisure Relief

One welcome piece of news to come from the Autumn Statement, was the announcement that Retail, Hospitality and Leisure Relief would remain at 75% for 2024/25 in England. This is limited to a cash cap of £110,000 per business and therefore for larger businesses you will need to carefully consider how to best maximise the potential of this relief across your portfolio. 

It has recently been announced that retail and leisure businesses in Wales will see this relief reduced from 75% to 40% from 1^st April 2024. This will clearly create a disparity with one extreme example coming to mind - two public houses located on the English-Welsh border, with similar Rateable Values but receiving very different business rates bills.

Professional Advice

It is impossible to cover every circumstance relating to business rates bills within this one article as how your business rates are calculated will largely depend on your individual circumstances. 

If you do require professional advice as to whether your new business rates bill is accurate or whether you may be eligible for reliefs then please don’t hesitate to get in touch.