Rates are cited by many of our clients as the third highest overhead behind staff costs and rent.
The 2010 Revaluation came into effect in April 2010 and property occupiers should understand how this affects them.
Rateable Values are set independently by the Valuation Office Agency. Revaluation usually takes place every 5 years to reflect changes in the property market. The most recent revaluation in England and Wales was 1 April 2010. Rateable Values were updated based on rental levels on the previous statutory valuation date of 1 April 2008. The revaluation previously scheduled for 1 April 2015 will be postponed to 1 April 2017 in England and Wales.
Rateable Values can be appealed by businesses who feel they are unfair.
Uniform Business Rate 2014/15
The Uniform Business Rate is set each year by the government. At a revaluation, the Uniform Business Rate is adjusted to ensure that in broad terms no more is raised in real terms from business rates from List to List.
The multiplier is used by your local council when calculating your business rates bill. It indicates the percentage, or pence in the pound, of the rateable value that you will pay in business rates. The business rate multiplier for England in 2014/15 is 48.2p. The small business rate multiplier for England in 2014/15 is 47.1p.
Rates Liabilities 1 April 2014
Rates liabilities can be calculated by multiplying the 2010 List Rateable Value by the Uniform Business Rate for 2014/15.
The resulting liabilities may then be adjusted for any qualifying reliefs or adjustments under the government’s transitional arrangements.
Business rates reliefs
You can get small business rate relief if:
- you only use one property
- its rateable value is less than £12,000
What you get
Until 31 March 2015 you will get 100% relief (doubled from the usual rate of 50%) for properties with a rateable value of £6,000 or less. This means you will not pay business rates on properties with a rateable value of £6,000 or less.
The rate of relief will gradually decrease from 100% to 0% for properties with a rateable value between £6,001 and £12,000.
You have more than one property
You could get small business rate relief if the rateable value of each of your other properties is less than £2,600.
The rateable values of the properties are added together and the relief applied to the main property.
You’re a small business but don’t qualify for relief
If your property has a rateable value below £18,000 (£25,500 in Greater London) you are considered a small business.
Even if you do not qualify for small business rate relief, your business rates will be calculated using the small business multiplier instead of the standard one. This is the case even if you have multiple properties.
The multiplier shows the percentage (pence in the pound) of the rateable value that you pay in business rates.
Retail Premises Discount
A discount of £1,000 for certain retail premises with an RV of £50,000 or less has been introduced for 2014/2015 and 2015/2016, subject to state aid limits.
A temporary relief for premises adversely affected by flooding between 1 December 2013 and 31 March 2014 has been introduced subject to state aid limits.
You do not have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates.
Some properties can get extended empty property relief:
- industrial and warehouse premises are exempt for a further 3 months
- listed buildings - until they are reoccupied
- buildings with a rateable value under £2,600 - until they are reoccupied
- properties owned by charities (only if the property’s next use will be mostly for charitable purposes)
- community amateur sports clubs buildings (only if the next use will be mostly as a sports club).
You need to contact your local council to let them know when your property becomes vacant.