The Basics

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 2010 Rating List is the 1st of April 2008. In short, the rateable value of a property is the amount of rent that a tenant would pay as at the 1st of April 2008.

The Uniform Business Rate - This is a multiplier which is calculated each year by the government. The multipliers are between 48p in the pound and 49.3p 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.

Example

A shop with a Rateable Value of £20,000 would pay 0.48 x £20,000 = £9,600. From this, for 2015 discretionary Retail Relief of £1,500 would normally apply so the total owing would be somewhere in the region of £8,100.

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 2008.

As we’re sure you’re aware the economy has suffered hugely since then. Therefore, it is not uncommon for rents to have more than halved over the previous 7 years whereas the rates bill remains at a high level.

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. Their site is here : http://www.2010.voa.gov.uk/rli/en/basic/find.

*** Please Note – any proposals lodged between the 31st of March 2016 and 31st of March 2017 will only have rebates backdated to the 1st of April 2016. ***

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.

Examples of this include: prolonged roadworks, increasing numbers of vacant shops, the opening of shops similar to yours in the local area that affect trade.

When will there be a new rating list?

There is a new Rating List that will come into effect on the 1st of April 2017. This will have an Antecedent Valuation Date of the 1st of April 2015. Therefore, your Rateable Value should more closely reflect the rent. However, when a new list is launched it is always open to challenge – valuation is often a matter of opinion – so we thoroughly recommend lodging an appeal to challenge your assessment. 

@EstatesGazette

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