How to calculate business rates
As a first time business owner, you are likely wondering how to calculate your business rates. Business rates are a tax on non-domestic properties, such as shops, offices, and factories. They are calculated based on the rateable value of your property, which is an estimate of its annual rental value.
The amount you pay will depend on a number of factors, including the size and location of your property, the type of business you operate, and whether you are eligible for any relief. This can seem overwhelming, but we’ve put together a step-by-step guide to help you calculate your business rates and understand your bill.
Find your rateable value
The first step is to find your rateable value. This can be done by contacting the Valuation Office Agency (VOA). The VOA is a government agency that is responsible for valuing non-domestic properties for business rates purposes.
Determine your multiplier
Once you have your rateable value, you need to determine your multiplier. The multiplier, also known as the UBR, represents the percentage of the rateable value used to calculate business rates. The government sets the UBR annually, and it differs depending on the region and property type. The standard multiplier is 49.9p for England and 51.2p for Wales. However, if your rateable value is below £51,000, you may be eligible for the small business multiplier, which is lower.
Multiply your rateable value by your multiplier
Once you have your rateable value and your multiplier, you can multiply them together to get your estimated business rates bill.
Business rate relief
You may be able to get a discount from your local council if you’re eligible for one or more business rates relief schemes. There are a number of reliefs that you may be eligible for, such as small business rate relief, rural rate relief, and charity rate relief. You can check what you may be eligible for at https://www.gov.uk/.
The VOA updates the rateable value of business properties to reflect changes in the property market. The most recent revaluation came into effect on 1 April 2023, you can read more about the 2023 business rate revaluation here.
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