Understanding Business Rates

Do you find your business rates demands confusing?  We’ll try to make it understandable.

What are business rates?

Business rates (or national non-domestic rates) are charged to occupiers of commercial premises by their local authority. The funds collected are used to finance local authorities’ activities and services.

Business rates should not be confused with water rates demanded by water authorities.

Who pays business rates?

Unless your tenancy states that business rates will be included within your rent, demands will be issued to and be payable by the occupier.

The occupier is responsible for notifying the local authority when they move to new business premises and is advised to notify them again when leaving  at lease expiry.

What is the rateable value?

Business premises are valued periodically and are given a rateable value. The last valuation was 1 April 2010 and the next revaluation is scheduled for 1 April 2017 in England, Scotland and Wales.

The rateable value is a hypothetical valuation, based upon the rental value of the building at a specific date.

In England and Wales you can find your premises’ rateable value by searching on the Valuation Office Agency’s web site https://www.gov.uk/correct-your-business-rates and in Scotland by searching the SAA’s website http://www.saa.gov.uk/

If you suspect your rvalue is too high, it can be appealed. Be sure to liaise with your landlord or a ‘reputable’ business rates consultant before submitting your appeal, as rateable values can increase at appeal as well as go down. Remember to  be wary of rogue rating consultants who submit appeal applications on a widespread basis without actually representing you in negotiations with the valuation agency.

How are business rates calculated?

Business rates are calculated by multiplying the ‘rateable value’ of your property by a multiplier.

In England and Wales the multiplier is called the Uniform Business Rate (UBR) and in Scotland, the multiplier is called the Poundage Rate.

The multiplier is the number of pence in the pound of the rateable value that you’ll have to pay as business rates, before any relief or discounts are deducted. The multiplier is set annually by central government in line with inflation and will vary depending on location and size of premises.

Multipliers for the 2015/2016 period are set out below.


 How are business rates demanded?

Your business rates demand will usually be issued by the local authority in March or April.

Most lauthorities will ask for business rates to be paid in ten equal monthly instalments.

Rates relief

Certain premises or businesses may be eligible for discounts on their business rates.  Check to see if your business or premises qualify for business rates relief.

In England and Wales visit https://www.gov.uk/apply-for-business-rate-relief/overview

In Scotland visit https://www.mygov.scot/business-rates-relief/

You are always advised to contact your local authority for further advice on business rates.

Applications for rates relief generally need to be resubmitted after each revaluation of the rateable value so make sure you are not missing out.

The Sterling Industrial team would be happy to assist existing or prospective tenants with business rate queries.