How are Business Rate bills calculated?
Calculating the amount of Business Rates you should pay can be complicated! This page sets out to explain the principles and signposts you to more detailed information should you need it.
The basic calculation involves multiplying the rateable value of your property (set by the Inland Revenue Valuation Office Agency) by the multiplier (set by the government).
But there are other factors which may affect the amount you actually have to pay, including schemes covering transitional relief, small businesses, some rural businesses, charities, and empty properties.
If you need more detailed information, please contact us |
Rateable values
Rateable values (RV) are used as the basis for deciding how much Business Rates you have to pay. The Valuation Office Agency (VOA) is responsible for determining RVs for all commercial properties. Values are based on rental values (although licensed properties and holiday accommodation may be valued differently) and are reassessed every 5 years. For an explanation of why there are revaluations, go to Why a Revaluation?.
The most recent revaluation took effect on 1st April 2010 and was based on the rental value of properties in 2008. For full details of the revaluation, including your current RV, please go to the VOA website at www.2010.voa.gov.uk/rli.
Multiplier
The multiplier is set each year by the government and cannot, by law, rise by more than the amount of the increase in the retail price index (except immediately following a revaluation). There are different multipliers for different sized properties. The multipliers for 2010/11 are:
- 40.7p if your property has an RV under £18,000 (subject to some conditions if you occupy more than one business property - see Small business rate relief)
- 41.4p if your property has an RV of £18,000 or over
From the 1st April 2011 the proposed new figures are:
- 42.6p if your property has an RV under £18,000 (again subject to some conditions as above)
- 43.3p if your property has an RV of £18,000 or over
Transitional relief
The government recognises that revaluations can cause sharp rises in the level of Business Rates payable for some businesses and the Transitional Relief scheme was introduced to help smooth out any large increases or large reductions, although there aren’t many of those in the South Hams! Broadly speaking the scheme compares how much you were paying (or would have been paying but for any reliefs) in 2009/10 with your liability for 2010/11 (again ignoring any reliefs), and limits any increase to:
- 5% if your property had an RV under £18,000 on 1st April 2010
- 12.5% if your property had an RV of £18,000 or over on 1st April 2010
Paying less
There are a number of ways your bill may be reduced. Go to Can I pay less?.
