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 grant 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 government. The current multipliers are shown on the front of your bill.

Revaluation 2017 and transitional arrangements

The VOA regularly reassesses and updates the rateable values of all business properties, usually every five years. This is called a revaluation. This is done to maintain fairness in the system by redistributing the total amount payable in business rates, reflecting changes in the property market. Revaluation does not raise extra revenue overall.

For more information on the 2017 revaluation, rateable values, and business rates please visit Gov.uk – Introduction to Business Rates .

Revaluation revenue

The 2017 revaluation will not increase the amount of rates collected nationally.

The Government believes it is important to provide the greatest support to small and medium businesses seeing increases and to also allow those small and medium businesses seeing reductions to gain quickly from the revaluation.

The scheme must be revenue neutral and, in order to continue to support small and medium businesses, the Government has decided to provide less relief for large businesses than in 2010.

Under the transition scheme, limits continued to apply to yearly increases and decreases until the full amount was due (rateable value times the appropriate multiplier). If there were changes to the property after 1 April 2017, transitional arrangements did not normally apply to the part of a bill that related to any increase in rateable value due to those changes. Changes to the bill as a result of other reasons (such as because of changes to the amount of small business rate relief) are not covered by the transitional arrangements.

The transitional arrangements were applied automatically and shown on the front of the bill. Further information about transitional arrangements and other reliefs may be obtained from North East Lincolnshire Council or Gov.uk – Business Link .

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.