How your business rates are calculated

Business rates is a local tax that is paid by the occupiers of all non-domestic / business property, in the same way that council tax is a tax on domestic property.

This money, together with revenue from council taxpayers, revenue support grants provided by the government and certain other sums, is used to pay for the services provided by your local council and other local authorities in your area.

Business rates are charged on most business properties such as shops, offices, pubs, warehouses and factories. However, the property doesn’t have to be used for a business – if it is used for purposes which are not domestic it is likely to be rateable. We will send you a business rates bill each year.

The VOA sets the rateable value of business premises by using property details such as rental information.

We use the rateable value and the business rates multiplier (set by central government) to calculate your business rates bill.

To find out more, read our non-domestic rate (business rates) completion notice rules, found in the related documents section of this page.

Understanding your rateable value

Business rates are based on your property’s rateable value. The Valuation Office Agency (VOA) maintains the Non-Domestic Rating List. This includes setting the rateable values of business properties. To understand why your property has a certain rateable value, please go the following link: ‘How business rates are calculated’.

If you submit an appeal against your rateable value, you cannot withhold payment, or any part of the payment, pending settlement of your appeal.

National non-domestic rating multiplier

The local council works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers:

the standard non-domestic rating multiplier and
the small business non-domestic rating multiplier

The former is higher, to pay for small business rate relief.

The government sets the multipliers for each financial year, according to formulae set by legislation. Between revaluations, the multipliers change each year, in line with inflation and to take account of the cost of small business rate relief.

In the year of revaluation, the multipliers are rebated to account for overall changes to total rateable value and to ensure that the revaluation does not raise extra money for the government. The current multipliers are shown on the front of your bill.

Multiply your rateable value by your multiplier. This shows you how much you will have to pay in business rates (before any relief is deducted).

Tax Year	Small business multiplier (RV 0 to £50,999)	Standard multiplier (RV £51,000 and over)
2023/24	49.9 pence	51.2 pence
2024/25	49.9 pence	54.6 pence

The small business multiplier will be added if a business with a rateable value between £0 and £50,999, is unoccupied, on the central list or occupied by charities under the

Transitional relief limits how much your bill changes each year as a result of the business rates revaluation.

You will receive transitional relief if your rates go up or down by a certain amount. The changes to your bill will be phased in gradually. You don’t need to do anything if you are eligible, we will automatically adjust your bill.

Rateable value	2023/24	2024/25	2025/26
Up to £20,000	5%	10% plus inflation	25% plus inflation
£20,001 to £100,000	15%	25% plus inflation	40% plus inflation
Over £100,000	30%	40% plus inflation	55% plus inflation

If your bill has increased because of the most recent revaluation, or you’ve seen a reduction in your Small Business Rate Relief (SBRR) or Rural Rate Relief (RRR). You could be eligible for the Supporting Small Business Scheme (SSB). This means your bills will not increase more than £600 per year or £50 a month from April 2023.

Revaluation and other relief

The Valuation Office Agency (VOA) updates the rateable value of business properties to reflect changes in the property market.

The most recent revaluation came into effect on 1 April 2023, based on rateable values from 1 April 2021.

GOV.UK – Find a business rates valuation.

A package of targeted support worth £13.5 billion over the next five years will support businesses as they transition to their new bills, protect businesses from the impact of inflation, and support our high streets.

Rating advisors

Ratepayers do not have to be represented in discussions about the rateable value of their rates bill. Appeals against rateable values can be made free of charge.

However, ratepayers who do wish to be represented should be aware that;

Members of the Royal Institute of Chartered Surveyors (RICS) and the Institute of Revenues and Rating (IRRV) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct
Before you employ a rating advisor, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance
Take great care and, if necessary, seek further advice before entering into any contract.

Self-Catering Accommodation

New rules in relation to self-catering accommodation has come into force from 1 April 2023. All new self-catering accommodation from 11 November 2022 onwards will fall under the new rules. Whether it be a brand-new dwelling/complex or an existing property in the domestic list which is now being rented out commercially as self-catering accommodation, it will remain in the domestic list or enter the domestic list until the following criteria is met:

The whole of the building or self-contained part of the building must have been available to let commercially, as self-catering accommodation, for short periods totalling 140 days or more and actually let out for a total of at least 70 days.
A short-term let is considered to be 28 days or less.

Until the criteria are met, council tax will be payable. Once the property meets the criteria to enter the non-domestic rating list, the owner must submit a “Form of Return” to the Valuation Office Agency. This can be found in the Request for rental information for specific business types on GOV.UK.

The Valuation Office Agency will then make the final decision and notify the council.