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The UK businesses are obliged to pay business rates on their non-domestic property such as shops, offices, pubs, warehouses, etc. How much you have to pay depends on the location of the premises as well as the rateable value and the business rate multiplier. But are you aware of various reliefs and exceptions, which can ease your tax burden or help you avoid it altogether? Find out more about it in our new blog post.

What is a business rate, rateable value and business rate multiplier?

The taxes you have to pay depend on your property‘s rateable value and the business rates multiplier, also known as 'poundage'. The business rates multiplier is set by the Government while the rateable value, which is based on its probable annual market rent, is the set by the Valuation Office Agency.

The business rates are calculated by multiplying the rateable value of commercial premises by the business rates multiplier.

Rateable values are reviewed every five years. The new rateable values that came into effect 1st April 2017 have faced a backlash as some businesses saw the increase of up to 300% in business rates.

Business rates are handled differently according to a region. This article concentrates on the reliefs available in England.

Who has to pay it?

Business rates have to be paid:

• by all owners and leaseholders of businesses that occupy commercial properties
• on the commercial premises that occupy only part of the building
• on a section of the house that is used for work purposes (relevant for those who work from home)

Help for small business

In England, if your business premises have a rateable value below £51,000, you are considered to be a small business and you are eligible for a number of exceptions and reliefs.

• Generally, business rates for small businesses are calculated with a lower businesses multiplier
• Small businesses with rateable values below £15,000 can apply for an additional rate relief.
• Small businesses with a rateable value up to £12,000 can claim for a 100% relief.
• Small businesses with rateable values between £12,001 and £15,000 can claim for reliefs from 100% to 0% for properties.

Your business is not eligible for small business relief if you have more than one business property. Exceptions are made to businesses that have more than one business but their rateable values are below £2,900 and the total rateable value of all the properties is below £20,000 (£28,000 in London).

Other reliefs

In England you can also apply for:

• transitional rate relief, which puts the ceiling to the amount by which the business rates can increase when the rateable value significantly changes
• empty property relief, which exempts empty properties from business rates for the first three months (or longer, depending on the type of the building) after they become vacant
• rural rate relief, which is aimed to help rural businesses (eg. local shops)
• a relief up to 100% to charities or amateur community sports clubs

Also, these buildings are exempt from business rates:

• farm buildings and land (excluding building used as offices or for business activities)
• buildings used for training or welfare of disabled people
• fish farms
• places of public religious worship

Be smart

Don‘t take business rates for granted. You can think of other ways to ease your tax burden. For example, if you have an empty commercial building, you could rent it to a tenant for a short period of time and when the tenant moves out – claim empty property relief.

If you are having financial problems, you can contact the local council and ask to change the amounts and dates of your payments.

Also, don‘t forget that you can make an appeal:

• if you think the rateable value has been wrongly assessed
• if there have been changes to your premises.

More information

If you need more information or help applying for the reliefs, do not hesitate to contact Right Accounts. We are ready to help!

You can check rateable value of your property by the postcode here.

You can find the correct ‘multiplier’ for the size of your business and location here.

You can estimate your business rates here.

You can read more about the appeals here.