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What are business rates

Non-domestic rates or business rates are the way that those who occupy commercial (non-domestic) property contribute towards the cost of local services. They are administered and collected by local authorities.

Under the business rates retention arrangements introduced in 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  is used to help pay for the services provided by the council.

For more information view our explanatory notes for business rates financial year 2020/2021

Who has to pay?

In most circumstances occupiers of properties that are entered in the Valuation Office Agency’s (VOA) business rates lists must pay. Business rates are charged on most commercial (non-domestic) properties such as shops, offices, pubs, warehouses, factories, holiday rental homes or guest houses.

If the property is empty there is still a charge in most cases, and the owner/leaseholder/freeholder must pay this.

How are business rates calculated?

The rateable value of your business premises is set by the Valuation Office Agency (VOA). This is based on their assessment of the open market rental value. The VOA provide a facility to check the rateable value of your property online.

The amount of business rates payable is calculated by multiplying the rateable value by the correct ‘multiplier’ (an amount set by the government) and then awarding any relevant reliefs & reductions. The current multipliers are shown on the front of your bill.

Before the start of each financial year the government sets two multipliers for the whole of England; the standard rating multiplier and the small business multiplier.