Understanding Business Rates in the UK
Business rates, which are the tax paid for non-domestic property occupation, have a long history in the UK, dating back to the Poor Law of 1601. They represent approximately 50% of the annual rent of the property, based on a specific value known as the “rateable value.” These rates are set by central government, specifically the Valuation Office, an agency of Her Majesty’s Revenue and Customs (HMRC).
Setting Non-Domestic Rates
The Valuation Office calculates business rates based on the “rateable value” (RV), which is compiled and maintained in a full list of rateable values. The rateable value of the property is shown on the front of the bill.
It is important to note that business rates are handled differently in Scotland and Northern Ireland. Given the complex nature of business rates, it is advised for businesses to seek professional advice to determine the right rateable value.
How Business Rates Work
Non-domestic rates differ depending on the rateable value, which is used by councils to calculate rates bills. This is subject to a multiplier set by the VOA, and a large multiplier is applicable to larger businesses. Additionally, understanding the new appeals scheme known as Check, Challenge, Appeal (CCA) can be complex, and seeking expert advice in this area is recommended.
Who Pays Non-Domestic Rates: Landlord or Tenant?
Non-domestic rates are paid by the occupier of the premises, which can be the landlord or tenant. It is important to seek expert advice to determine the appropriate payment responsibility. Moreover, properties that are empty still require payment of the due bill, and certain properties can get extended empty property relief.
Understanding the Business Rates
The rateable value is not the actual payment amount but is used by councils to calculate your rates bill. It is advisable to seek professional advice to determine eligibility for rate relief. There are a range of available reliefs, particularly in the wake of Covid-19.
Registering for Business Rates
To register for business rates, contacting a reputable firm of rating surveyors is recommended, as business rates can be technical and confusing. Seeking advice from a qualified representative is advised.
For further information on business rates, this article is a useful resource.
Sophie Attwood is a director of rating at Colliers and head of rating in the Liverpool office.