What are business rates?
Business rates in the UK are a tax on the right to occupy commercial property and typically equate to approximately 50% of annual rent. They represent one of the largest overheads for businesses and substantially impact on profitability.
Who must pay business rates?
If you occupy a building, or part of one, that you use for commercial purposes, then you'll be required to pay business rates. Sometimes the landlord of the property charges the occupier a rent that also includes an amount for the Business Rates.
Using the business rate calculator
This calculator gives an estimate of your Business Rates bill based on the information you enter. To use the calculator, you'll need to:
- Enter the full address of your business premises.
- Select the location from the dropdown.
- Enter the 2023 rateable value.
How are business rates calculated?
Business rates are calculated in a two-step process. Firstly, the Valuation Office Agency (VOA) are tasked with estimating the annual rent the property is likely to let for as at a statutorily fixed valuation date. This is called a Rateable Value (RV) and is placed in the rating list alongside the address of the property to form the assessment. These can be found on the VOA website.
The second step is this RV is then used to create the liability by multiplying it by the Uniform Business Rate (UBR) factor which is set every year. This is typically around 50p in the £ and therefore the charge is approximately 50% of the annual rent. The UBR is usually adjusted every year for inflation by applying the Consumer Price Index (CPI).
Example
An example calculation
The Standard Multiplier for 2024-25 in England for any property with a Rateable Value (RV) under £51,000 is £0.499P, for any property with RV £51,000 or above or above is £0.546p.
If you became liable on a commercial assessment with an RV of £60,000 for example, to calculate your liability you would multiply the 'multiplier' by the RV: £0.546p x £60,000 = £32,760. Your estimated Business Rate charge for the full financial year before any reliefs (including transition), discounts or exemptions are applied would be £32,760.
Unoccupied assessments with RV £2,900 and below are exempt from any rate liability.
Current Business Rates Multiplier 2023-2026
England
|
ENGLAND RATE YEAR
|
Small RV <£51,000
|
Standard
|
|
2023-24
|
49.9p
|
51.2p
|
|
2024-25
|
49.9p
|
54.6p
|
|
2025-26*
|
50.1p
|
54.7p
|
City of London apply a supplement of £0.014p onto the standard multiplier, with effect from 1st April 2024, this will increase to £0.016 for properties with an RV <50,999 and £0.018p for properties with an RV 51,000>.
All assessments over RV £75,000 within Greater London (including the City of London) have an additional Business Rates Supplement of £0.02p added to their charge for Crossrail.
Scotland
|
RATE YEAR
|
Small RV <£51,000
|
Medium RV £51,000 - £100,000
|
Large RV >£100,000
|
|
2023-24
|
49.8p
|
51.1p
|
52.4p
|
|
2024-25
|
49.8p
|
54.5p
|
55.9p
|
|
2025-26*
|
50.0p
|
54.8p
|
56.2p
|
Wales
|
RATE YEAR
|
ALL PROPERTIES
|
|
2023-24
|
53.5p
|
|
2024-25
|
56.2p
|
|
2025-26*
|
56.5p
|
* Increase is based on the estimated CPI of 0.6% in September 2024
Ask the business rates team.
As one of the leading specialist teams in this sector, we offer a full rates management service which will ensure that this costly overhead is mitigated at every stage.
Our business rates advisory services include:
- Account management.
- Valuations, challenges, and appeals.
- Compliance & auditing.
- Rate mitigation for empty properties.