Business rates - how rates are calculated

Who has to pay Business Rates?

The occupier of a commercial property normally pays the Business Rates. Usually this is the owner-occupier or leaseholder and may be in the name of the sole trader, partnership or company responsible.

Business Rate-inclusive rental agreements are not binding upon the Council. The occupier is legally responsible for payment of business rates.

If a property is empty, the person entitled to possession will have to pay an Empty Property Rate.

How much will I have to pay?

Your Business Rates bill is worked out by multiplying your rateable value by the multiplier or 'poundage' which the government sets from April 1 each year for the whole of England. For example, in 2015/16 the multiplier is set at 49.3p, so if your rateable value was £100,000 the local authority would multiply this by 49.3p and your bill for the year would be £49,300.

The amount you pay could be reduced or increased if subject to transition (please see transitional arrangements below) or other reductions or reliefs.

What is a rateable value?

All non-domestic properties have a rateable value set by the Valuation Office Agency who are part of HM Revenues and Customs. The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date. This date, for example, was set at 1st April 2008 for the current revaluation of 1st April 2010.

The next revaluation was due in 2015, however in 2012 the government announced its intention to postpone the next business rates revaluation in England to 2017.

Can the council alter my rateable value?

No. It is the Valuation Office Agency that assesses rateable values, which are used for working out Business Rates.

The Valuation Office is an Executive Agency of HM Revenues and Customs and not part of Bristol City Council.

On what day of the month are Business Rate installments due?

The due date is the 1st of the month.

What are transitional arrangements?

If there has been a large rise or drop in the rateable value of your property from 1 April 2010, it will probably be affected by transitional arrangements.  The transitional schemes introduced in England following the revaluations in 2005 and 2010 ensure that each Business Rate bill did not change beyond certain limits because of the revaluation.  Different transitional arrangements will apply, depending on whether your bill has increased or decreased and whether your business is classed as small or large.  A small business is defined as a property with a rateable value of up to £17,999 outside London and under £25,499 within London.  The transition scheme operates over a five-year period ending 31 March 2015.

For both 2015/16 and 2016/17 the government has given the local authority discretionary relief powers to continue to award transitional relief for properties with a rateable value up to and including £50,000, for those ratepayers who do not exceed the state aid limits.

How are increases limited?

Transitional limits apply if the amount due after revaluation has increased by more than the amounts shown in real terms and after any inflationary/retail price index effect.

Year Small Property (rateable value less than £18,000) Large Property (£18,000 and over)
2010/11 5% 12.5%
2011/12 7.5% 17.5%
2012/13 10% 20%
2013/14 15% 25%
2014/15 15% 25%

How are decreases limited?

Transitional limits apply if the amount you would have to pay is lower than the previous year by more than the amounts shown below:

Year Small Property (rateable value less than £18,000) Large Property (£18,000 and over)
2010/11 20% 4.6%
2011/12 30% 6.7%
2012/13 35% 7%
2013/14 55% 13%
2014/15 55% 13%

Other reductions, exemptions and changes may be available to you.

Can I appeal against a rateable value?

You can appeal to the Valuation Office Agency if you think any of the following applies:

1. The rateable value shown in the Rating List (either following a general revaluation or when the property is first valued) is wrong.

2. There has been a material change of circumstances which has affected the value of your property. Material changes include:

  • a physical change to the building
  • a physical change to the local area
  • a change in the use of the building
  • a change in the use of a neighbouring property

3. A Valuation Officer's change in value is wrong.

4. There is another sort of error in the list entry, for example the address is wrong.

5. A decision by a valuation tribunal, lands tribunal or higher court has affected your own valuation.

6. The property should be exempt from valuation or part of it should be considered as a domestic property.

7. The property should be considered for rating as more than one property, or several properties should be considered as one property.

How will my appeal affect the amount of Business Rates I have to pay?

If you have made an appeal you must continue to keep up your payments as shown on your original bill. If you don't, the council will take recovery action against you.

When the appeal is settled, the council will refund, with interest, any difference between the amount you have already paid and any reduction resulting from the appeal. Interest will not be paid if a Magistrates Court liability order has been issued against you.

What are the limits on backdating?

In general, you can appeal against your valuation at any time while a rating list is in force.  However, the rateable value will be changed from either the date of the change or from the start of the current valuation list.  Further information is available on the Valuation Office Agency website.

How do I make an appeal?

It costs nothing to appeal. If you decide to appeal you can:

1. Ask the Valuation Office Agency for a form,

2. You can get a form from the VOA's website.

You should provide as much information as you can to support your appeal.

Business Rate multipliers

For details on the current and previous year Uniform Business Rate and Small Business Rate multipliers please refer to the Valuation Office Agency current multipliers.

Should I use a rating adviser?

Ratepayers do not have to be represented in discussions about their rateable value or rates bill. Appeals against rateable values can be made free of charge. However, ratepayers who do wish to be represented should be aware that members of the Royal Institute of Chartered Surveyors and the Institute of Revenues Rating and Valuation are qualified and regulated by rules of professional conduct designed to protect the public from misconduct. Before you employ a rating advisor, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Information on Trading Standards can be found on the business rates reduction scams warning pages.