What are business rates?

‘Business rates’ – the commonly used term for non-domestic rates – are charged on most non-domestic properties including shops, offices, warehouses, factories and also leisure premises such as pubs and hotels. Business rates are another Tax but instead of being levied on the income your business generates, it is a tax against the property that you occupy, a Tax on occupation.

If you use a building or part of a building for business, you will be liable for business rates.

It is the Valuation Office Agency’s duty to revalue all commercial property in England and Wales on a five yearly cycle; this is the ‘Rating List’. For instance, the 2005 Rating List spanned the period of the 1st April 2005 –31st March 2010. The current 2010 Rating List will span the period of the

1st April 2010 – 31st March 2015. This means that the Rateable Values set effective from 1st April 2010 will be used as a basis on which your rate liability charges will be calculated, subject to alteration or appeal, for this five year period.

Your Local Authority, based on direction from Central Government, then use the Rateable Value which is then multiplied by a national rate multiplier in order to arrive at the level of rate liability for the particular year. The local authority are not involved in setting the rateable value and they are not party to the discussions on the level of value that has been set, they are just a collection agency.

Why might my Rateable Value be too high?

In short, the VOA is given a difficult task to do, arriving at a valuation which is based on the evidence that they have at the time, also meeting strict time constraints. It is our job to provide evidence which highlight where mistakes and proves that they have got it wrong. Not an easy task but this is what
we do!