National non-domestic rates
Non-Domestic Rates, or 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). It is collected by local authorities and is the way that non-domestic ratepayers contribute towards the cost of local services.
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.
Under the business rates retention arrangements introduced from 1 April 2013, authorities keep a proportion of the business rates paid locally. This provides a direct financial incentive for authorities to work with local businesses to create a favourable local environment for growth since authorities will benefit from growth in business rates revenues.
The money, together with revenue from council tax payers, revenue support grant provided by the Government and certain other sums, is used to pay for the services provided by your local authority and other local authorities in your area. Further information about the business rates system, including transitional and other reliefs, may be obtained at on the GOV.UK website.
The scheme allows local authorities to keep 50% of business rates income including growth. This will rise to 100% from 2020.
You can find out more about these changes in the Plain English Guide to Business Rates Retention.
Apart from properties that are exempt from business rates, each non-domestic property has a rateable value, which is set by the valuation officers of the Valuation Office Agency (VOA), an agency of Her Majesty's Revenue and Customs.
It draws up and maintains a full list of all rateable values. The rateable value of your property will be shown on the front of your bill. You can check your rateable value by visiting the GOV.UK website.
The VOA sets the rateable value of business premises by using property details such as rental information. The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date. This date is set as April 1st two years prior to a new Rating List coming into force.
Please also refer to the paragraph about Revaluations below.
- Until 31 March 2017, the rateable values are based on a valuation date of 1 April 2008.
- After 1 April 2017, the rateable values are based on the valuation date of 1 April 2015.
The valuation officer has to maintain the list and may alter the value if he or she believes that the circumstances of the property have changed. The ratepayer (and certain others who have an interest in the property) can also appeal against the value shown in the list if they believe it is wrong. Further information on the grounds for making an appeal, and on how to make one, can be found on the GOV.UK website.
If your rateable value changes as the result of your appeal, and the amount you have to pay is altered because of this, you will be sent a revised bill.
In the meantime you must keep up your payments as shown on your original bill. If you don't, we will take recovery action against any arrears that build up. We will refund, with interest, any difference between the amount you have already paid and any reduction resulting from a successful appeal, but we will not pay interest if a liability order has been issued against you.
National Non-Domestic Rating Multiplier
The local authority 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.
Except in the City of London where special arrangements apply, the Government sets the multipliers for each financial year for the whole of England 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 rebased 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.
All rateable values are generally reassessed every five years at a general revaluation to ensure bills paid by any one ratepayer reflect changes over time in the value of their property relative to others. 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 revenues overall.
The last Revaluation was 1 April 2010. The Government postponed the next Revaluation until 2017 with the intention of providing greater stability for businesses to encourage economic growth.
From 2017 there will be a revaluation every three years.
- For more information on the 2017 Revaluation, rateable values, and business rates go to the GOV.UK website.
- You can also estimate your business rates bill, including any small business rate relief that may apply to you (see the Reductions & Reliefs page for more information).
For those ratepayers who would otherwise see significant increases in their rates liability, there is a transitional relief scheme to limit and phase in changes in rate bills as a result of Revaluations.
To help pay for the limits on increases in bills, there are also limits on reductions in bills. Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier).
The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1st April then transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to your 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 are applied automatically and are shown on the front of this bill.
More information on Revaluation 2017 can be found on the GOV.UK website.
If regular periods of short term occupation at a property exist we may need further verification of occupation before we can re-award the void exemption. This may involve a visit to the premises by one of our Officers and provision of documentation and photographs in support of your claim, because it is not always possible to grant relief retrospectively.
Equally it is important that if you intend to occupy a property for a short period of time that you contact us immediately. If you are the landlord of a property and assign a short term lease it is advisable to forward a copy of the tenancy agreement/ documentation and photographs to our office to verify your entitlement to any subsequent exemptions.