With the end of another tax year fast approaching, we’re sharing areas to consider as part of your tax ...
are you paying too much for your business rates?
28 October 2020
Business Rates can be a headache for the majority of businesses who operate from commercial property in the UK. Making sure your business is being charged the correct amount can often be something that’s overlooked and can result in many businesses overpaying thousands of pounds for their premises.
What are they?
Business rates are a tax on property used for commercial purposes. They’re charged on properties like offices, warehouses, shops and restaurants. The majority of commercial properties in the UK will attract some form of business rates and they may even be charged on part of a building, if it’s being used for commercial purposes. Certain types are exempt like farm buildings or places used for the care of disabled people. However, there are strict requirements for these exemptions, so seeking professional advice is key in these situations.
Business rates are controlled by central government, as they set the annual multiplier – a pence in the pound value which is applied to a property’s Rateable Value (RV). The RV’s an estimate of the open market rental value a property could achieve on a specified date in England & Wales, and is set by the Valuation Office Agency (VOA) – an executive agency sponsored by HMRC. Property valuations are generally updated every 5 years and the most recent revaluation came into force in April 2017, which was based on property values in April 2015. The VOA sets your RV, which is then used by your local council to calculate your business rates bill.
For more information on how to find your business’ Rateable Value, click here.
What if I think my business rates are wrong?
It’s not uncommon for Business Rates payers to believe their rateable value’s incorrect. However, you must be able to demonstrate why you think the valuation’s wrong in order for any changes to be made. If you think your rateable value’s wrong, then you can:
- Request changes to property or valuation details if you think they’re wrong.
- View the valuation details of other properties.
- Challenge the rateable value if you believe it’s not accurate.
What reliefs are available?
A range of reliefs are available to businesses, as certain properties are eligible for discounts from their local council.
An important relief that many businesses will be eligible for is ‘Small Business Rates Relief’.
This applies if:
- The property’s rateable value’s less than £15,000.
- The business only uses one property (you may still be able to get the relief if you use more).
Businesses won’t pay business rates on a property with a rateable value of £12,000 or less. For properties with a rateable value of £12,001 to £15,000, the rate of relief’s tapered from 100% to 1%.
Other reliefs include:
- Rural rate relief.
- Charitable rate relief.
- Enterprise zone relief.
- Hardship relief.
- Retail discount.
- Local newspaper relief.