Non-domestic rates are a means by which businesses and other occupiers of non-domestic property indirectly contribute towards the costs of the services provided by local authorities.
The follwing information provides an introduction to some of the issues that may affect you if you occupy non-domestic (business) premises. This includes properties occupied by organisations who do not operate in order to make a profit. The income from all non-domestic rates is paid into a national pool and redistributed between local authorities in proportion to their adult population. Domestic properties are subject to council tax.
There are four key organisations involved in local government finance and each has a separate responsibility. These are:
Communities and Local Government (CLG) / Welsh Assembly Government : responsible for setting the overall government policy on local taxation
Valuation Office Agency : an executive agency of HM Revenue & Customs responsible for assessing rateable values that are the basis for working out rates bills
Valuation Tribunal Service : an independent, judicial body that has the power to deal with appeals relating to non-domestic rating (and council tax).
Local (billing) Authorities : who are responsible for working out your rates bill, giving any reliefs that may be due and for collecting the money.
Rates are normally payable by the occupiers of business premises. These will usually be either the owner if he/she is the occupier of the property or the leaseholder.
If a property is empty, the owner or leaseholder will usually still pay rates after a period of exemption has elapsed. The period of exemption covers the first three months that the property is empty. For warehouses and industrial property, the exemption period is extended to six months.
Apart from those properties which are exempt from rates, each non-domestic property has a rateable value. The rateable value broadly represents the annual rent the property could have been let for on the open market on a particular date, on full repairing and insuring terms. For the current rating list, this date was set as 1 April 2003.
The rateable value is the VOA assessment of rental value on a fixed valuation date and subject to certain valuation assumptions laid down by Parliament. It may be different from the rent you actually pay for a number of reasons, for example your own rent was agreed at a different time.
The valuation date is fixed so that all properties are valued at the same point in time. This helps to ensure fairness for everyone.
No. Rateable values are a key factor in the calculation of business rates but they are not the rates bill. Local authorities are responsible for calculating actual rates bills and for collecting rates and will use the rateable value in working out how much you have to pay. The local authority will apply the multiplier, (a rate in the pound) to the rateable value and then deduct any reliefs that are applicable. In England the multiplier is set by the Communities and Local Government and in Wales the multiplier is set by the Welsh Assembly Government . In simple terms your rates bill is worked out as follows: (rateable value x multiplier) less any reliefs = rates bill.
The business multiplier for 2009/2010 is:
England - 48.5p in the pound
Small businesses in England* - 48.1p in the pound
All businesses in Wales – 48.9p in the pound
(*For England a small business = is one where the total rateable value is under £15,000 [under £21,500 in London.] Some businesses may be eligible for small business relief, which can affect the amount of rates that you pay.)
Example:
A property with a rateable value of £22,000 would be:
£22,000 x 0.485 = £10,670 less any reliefs that are applicable
In Wales this would be £22,000 x 0.489 = £10,758 less any reliefs that are applicable .
The local authority will also work out any transitional adjustment. The transitional adjustment limits the amount by which your rates bill changes following a revaluation. There is no transitional relief in Wales
I am interested in moving to new premises - can I find out what the rates bill is likely to be before I move in?
You can find out the rateable value of any business premises in a local authority area from the VOA's rating list. This is a public document and can also be viewed in the VOA offices, local authority offices and libraries. The property you intend to occupy may be in receipt of transitional or other reliefs. You can establish your rate liability by contacting the finance department of the local authority or by asking your solicitor to make enquiries.
If the property you are going to occupy is still under construction or is newly built it may not have been assessed yet for rating purposes and there will be no entry in the rating list. You can write to your local Valuation Office and request an estimate of the rateable value. You should give details of the address, the type of property, the internal measurements and any information concerning the rent which you have agreed to pay. The Valuation Officer will then endeavour to provide you with an estimate. Alternatively, you may wish to consult an independent adviser.
You may be liable to business rates on the proportion of your property used for business purposes.
You can make an appeal against your rateable value once you become the owner or occupier of the premises - this is known as making a ‘proposal’ to alter the rating list.’ You can obtain a proposal form from your local Valuation Office or you can make an appeal online either yourself or via an agent. If you decide to make a proposal the VOA will write to you or your agent to tell you when the VOA expect to begin discussions about your appeal. If the VOA cannot agree the matter between you or your agent your appeal can be heard by an independent Valuation Tribunal.
It is important to note that you have to pay rates on the basis of the rateable value shown in the rating list even if you have appealed against it.
BBC News - Home
The latest stories from the Home section of the BBC News web site.
2 - Homs reporters' deaths condemned
3 - Comic Frank Carson dies aged 85
4 - Probe into gender abortion claims
5 - MP held over Parliament 'assault'
6 - Degree courses 'cut by a quarter'
7 - Cost-price drink plan criticised
8 - Attacks on business snobbish - PM
9 - Gillard calls leadership ballot
10 - Strauss-Kahn released by police
11 - Man due in court over two murders
12 - Slow broadband 'hits many homes'
13 - Rare US comic books fetch $3.5m
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17 - NHS 'will be Cameron's poll tax'
18 - Cherie Blair starts hacking case
19 - Time link to sudden cardiac death
20 - Skin cancer drug hopes from study
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22 - 'John Lewis' model for schools
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28 - Bonham Carter honoured at Palace
29 - 7 questions on fashion faux pas
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31 - Man City 4-0 FC Porto (6-1 agg)
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33 - Celtic 2-0 Dunfermline
34 - GB claim World Cup diving bronze
35 - Hamilton praises new car's speed
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38 - Report queries oil fund benefits
39 - Rangers ex-chief questions Whyte
40 - Phoenix Supply to cut gas prices
41 - Man dies after caravan incident
42 - 35 years for pregnant teen killer
43 - Peacocks sold but 3,100 jobs lost
44 - South Sudan expels oil firm boss
45 - Nigeria rig 'may burn for months'
46 - Karzai urges calm over Koran row
47 - Arroyo pleads not guilty to fraud
48 - Putin supporters plan mass rally
49 - More bodies from Concordia found
50 - Buenos Aires train crash kills 49
51 - Mexico arrests riot prison guards
52 - US dismay at IAEA Iranian visit
53 - Car bomb kills eight in Baghdad
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64 - VIDEO: House of Commons
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79 - Tributes to killed Syria reporter
African and Western leaders are to discuss the future of Somalia, including the threat from terrorism and piracy, at a major conference in London.
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Friends and former colleagues pay tribute to "one-off" comedian Frank Carson, whose catch phrases included "It's a cracker", after his death aged 85.
The Department of Health launches an inquiry into claims that doctors agreed to carry out abortions on the grounds of the sex of unborn babies.
A man, understood to be Falkirk's Labour MP Eric Joyce, is arrested on suspicion of assault following a disturbance at the Houses of Parliament.
The number of full-time undergraduate degree courses offered at UK universities has fallen by 27% over the past six years, data shows.
A ban on the sale of below-cost alcohol will have a "limited impact" on overall alcohol pricing, research suggests.
David Cameron is to praise business for its 'vital role' in society later and say attacks on wealth creators are motivated by "snobbery".
Australian Prime Minister Julia Gillard calls a ballot for the leadership of the Labor Party on Monday to end a tussle with Kevin Rudd.
Former IMF head Dominique Strauss-Kahn is released after two days of questioning over an alleged prostitution ring but will be quizzed again next month.
A 47-year-old man is due in court charged with the murders of a retired teacher and a vicar.
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A collection of early comic books - including those featuring the debuts of Batman and Superman - is sold for $3.5m (£2.2m) at auction in New York.
A new study comparing chromosomes in humans and rhesus monkeys suggests genetic decay of the male sex chromosome has all but ended.
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Carlos Tevez could be playing for Manchester City within "two to three weeks" after manager Roberto Mancini accepted his apology to the club.
Celtic ease to victory over bottom side Dunfermline to go 20 points clear of Rangers at the top of the SPL.
Divers Tonia Couch and Sarah Barrow win Britain's first medal at London's Aquatics Centre.
Lewis Hamilton pronounces himself impressed with the speed of his "well-behaved" new McLaren after day two of the second pre-season test in Spain.
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Former Philippine President Gloria Arroyo pleads not guilty to electoral fraud before a court in Manila.
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A commuter train crash at a station in the Argentine capital Buenos Aires kills at least 49 people and leaves more than 600 injured, officials say.
The director of a Mexican prison and 28 guards are arrested on suspicion of helping a mass breakout and the murder of 44 other inmates.
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24 hours of news photos: 22 February
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24 hours of news photos: 21 February
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Mumbai in the 1970s and 80s
Photos from around the world
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Rosemarie Colvin, mother of the killed journalist Marie Colvin, has said her daughter was totally committed to what she did.
James Corden told Radio 5 live how he had to interrupt Adele as she was giving her speech so that Blur could begin their set.
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At least 49 people have been killed in a train accident in Buenos Aires.
A man has been charged with murdering a vicar in South Gloucestershire and a retired teacher in Worcestershire.
Researchers at the University of Bedfordshire believe they have found a way of harvesting power from radio waves.
To mark America's Black History Month, a blues concert called 'Red White And Blues' was held at the Whitehouse, featuring Mick Jagger and B.B. King.
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How much Christianity is hidden in British society?
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'Heroic face of journalism': Papers mourn Marie Colvin
