It is the responsibility of the occupant of a non-domestic (or commercial) property – whether they are the owner or the tenant – to pay a tax on their occupation of that property. This tax is known as business rates.
You will likely need to pay if you use some or all of a property to run a business, or for any other commercial purpose. How much you have to pay is dependent upon your property’s value and where your property is located:
- England and Wales: The amount you have to pay is your property’s rateable value multiplied by the business rates multiplier (or small business rates multiplier).
- Scotland: The amount you have to pay is your property’s rateable value multiplied by the current poundage rate.
- Northern Ireland: The amount you have to pay is your property’s net annual value (NAV) multiplied by the sum of the non-domestic regional rate poundage and the non-domestic district rate poundage.
If you know these figures, you can estimate what your rates bill will be.
When do I need to pay?
Rather like with council tax, you will receive your business rates bill just before the beginning of the tax year (typically sometime in February or March) and will pay it in 10 instalments throughout the year.
If you would prefer to pay it in 12 instalments, or wish to discuss any other aspect of your bill, you should contact your local council.
Relocations and start-ups
If your premises or the type of your business change, you will need to notify the relevant authority, as your business rates bill might also change.
- In England and Wales, you will need to contact the VOA (Valuation Office Agency)
- In Scotland, you will need to contact your local assessor
- In Northern Ireland, you will need to contact LPS (Land & Property Services)
If you have started a new business, you will need to contact your local council. They will then send you a rates bill for the period that you have owned or rented your commercial premises.
Home businesses
If you work from home, you may need to pay rates on the part of your home that you work from; council tax will be payable on the rest. It is more likely that you’ll need to pay business rates if you’ve modified your home somehow, such as by turning a room into a workshop.
To see if you need to pay business rates, contact:
- The VOA (England and Wales)
- Your local assessor (Scotland)
- LPS (Northern Ireland)
Relief and exemptions
Not all businesses need to pay the full rates amount at all times, and some are exempt from paying rates altogether.
Whether you qualify for a full exemption depends on where you live and what type of business you run; contact your local council to see if you might be exempt.
Relief schemes in England
- Small business rates relief
- Transitional rates relief
- Rural rate relief
- Charitable rate relief
- Enterprise zone relief
- Exempted and empty buildings relief
- Retail relief
Relief schemes in Scotland
- Small Business Bonus Scheme
- Empty buildings relief, Fresh Start and New Start
- Rural rate relief
- Charitable rate relief
- Disabled persons relief
- Enterprise area relief
- Renewable energy generation relief
Relief schemes in Wales
- Small business relief
- Charitable rate relief (see above link)
- Empty property relief (see above link)
- Open for Business scheme
- New Developments scheme
- Hardship relief (contact your local council if your business is struggling to see if you might be eligible for this discretionary relief)
Relief schemes in Northern Ireland
- Small business rate relief
- Small business rate relief for small post offices
- Empty premises relief
- Charitable exemption
- Sports and recreation rate relief
- Residential homes rate relief
- Industrial derating
- Non-domestic vacant rating
- Hardship relief
- ATMs in rural areas
Written by Ben Gosling for Commercial Trust Limited.