Glossary · UK
What is Business Rates?
A property tax paid by occupiers of most non-domestic properties in England, Scotland and Wales, calculated from a property's rateable value multiplied by a government-set multiplier.
Full Definition
Business rates (formally National Non-Domestic Rates) are a property tax charged on most non-residential properties, such as shops, offices, warehouses, pubs and factories, paid by the person or business occupying the property rather than the landlord. The Valuation Office Agency assesses each property's "rateable value" -- broadly, an estimate of its open-market annual rental value at a fixed valuation date -- and the annual bill is calculated by multiplying the rateable value by a government-set "multiplier" (expressed in pence per pound), which is reviewed and typically uprated each year, with a separate, lower multiplier for smaller properties. Many businesses qualify for reliefs that reduce or eliminate the bill: Small Business Rate Relief gives 100% relief for properties with a rateable value below a set threshold (tapering up to a higher threshold), and other reliefs exist for retail, hospitality and leisure properties, charities, and properties left empty for a limited period. Rateable values are periodically revalued (most recently with effect from 1 April 2023, based on rental values at 1 April 2021) to keep bills broadly in line with current property market rents, with transitional relief schemes sometimes phasing in large increases or decreases gradually. Ratepayers who believe their rateable value is wrong can challenge it through the Valuation Office Agency's "Check, Challenge, Appeal" process.