Introduction
National Non-Domestic Rates (NNDR and also known as Business Rates) is a national tax, the proceeds of which go to fund local council’s spending plans.
Local councils collect the tax on behalf of the government and pay the proceeds into a national pool. Income from the pool is then redistributed to councils based on their population. There is no direct link between the amounts councils collect and what they ultimately receive.
The total amount of NNDR levied nationally cannot, by law, increase year on year by more than the rate of inflation.
Rateable values
Rateable values are used to apportion the share of the tax burden each business should pay. Broadly they are based on the rent businesses pay for their properties, although licensed properties and holiday accommodation may be valued differently.
Over time, economic conditions change and affect different parts of the country in different ways. There will be variations in the levels of prosperity experienced in different parts of the country which in turn may affect the rents that landlords can charge, and hence the rateable values.
In addition to changes nationally, and again over time, there will also be changes in demand (and therefore rent) for different types of properties. For example, the demand for industrial properties has fallen quite dramatically over the last 20 years whilst that for office space has substantially increased.
2010 revaluation
In order to reflect those changes, and to ensure that each business only pays its fair share of the tax burden, rateable values are regularly reviewed. This process is carried out by the Inland Revenue Valuation Office Agency (VOA) every 5 years. The last revaluation came into effect in April 2005 and the VOA is in the process of preparing a new Rating List for April 2010. The new list will reflect rental evidence collected from businesses, based on what they were paying in 2008.
To find out more
For full details of the revaluation, including your new rateable value, please go to the VOA website at www.2010.voa.gov.uk/rli/.
Business Rates Information Letter: 2010 Revaluation.
