Non-domestic rates, more commonly known as business rates, are taxes levied on the occupation of most non-domestic property.
If you use some or all of a building for non-domestic purposes, such as the running of a business, you will likely have to pay business rates.
How business rates are calculated
Business rates are set according to the rateable value of your commercial property. This rateable value is multiplied by a certain figure, depending on where your property is located:
- In England and Wales, this figure is the ‘business rates multiplier’
- In Scotland, this figure is the ‘poundage rate’
- In Northern Ireland, the figure is the sum of the ‘non-domestic regional rate’ and the ‘non-domestic district rate’
Estimating your business rates bill
If you know both the rateable value of your property and either the business rates multiplier or poundage value, you can estimate your business rates bill.
- England and Wales: The Valuation Office Agency (VOA) records the standard and small business rate multipliers for England, Wales and the City of London. You can also use the VOA website to check your property’s rateable value.
- Scotland: The Scottish Assessors Association (SAA) records the poundage rate used in business rate calculations. The SAA also have a search tool that enables you to check your rateable value.
- Northern Ireland: The Department of Finance and Personnel (DFPNI) records the non-domestic district and regional rates, which combine to give the total poundage payable. DFPNI also record the rateable net annual value (NAV) of all business properties. On April 1 2015, NAVs were brought up to date as part of a country-wide revaluation conducted by Northern Ireland Land & Property Services (LPS); you can check both your old and new rateable value by using DFPNI’s valuation list search tool.
When you need to pay business rates
Business rates are usually payable in 10 monthly instalments throughout the tax year, much like council tax. Your council will send you a bill in advance of the commencement of the tax year, usually in February or March.
What if I’ve started a new business?
If you have started a new business, you should tell your local council, who will send you an adjusted business rates bill reflecting the period of time that you have owned your property.
What if my business premises change?
If you move premises, make changes to your existing premises or the nature of your business changes, the business rates you need to pay could also change. Whom you need to report changes to depends on where you live:
- England and Wales: the Valuation Office Agency (VOA)
- Scotland: your local assessor
- Northern Ireland: Land & Property Services (LPS)
What if I work from home?
You might have to pay business rates if you work from home, but only on the part of your home that you work in; for the rest of your home, ordinary council tax or domestic rates will still be payable.
If a whole room is used exclusively for work, or if you have modified a room (e.g. into an office or workshop), it is more likely that you will need to pay business rates.
To find out if you need to pay rates on your home business, contact:
- The Valuation Office Agency (VOA) (for England and Wales)
- Your local assessor (for Scotland)
- Northern Ireland: Land & Property Services (LPS) (for Northern Ireland)
Business rates relief
Some business owners are eligible for discounts on their business rates, called business rates relief. The types of relief available depend on where you live:
- Business rates relief in England
- Business rates relief in Northern Ireland
- Business rates relief in Scotland
- Business rates relief in Wales
Some properties are exempt from business rates altogether. Once again, what properties are exempt depend on where in the UK you live; for instance, places of worship are exempt in England, Northern Ireland and Wales, but in Scotland, you must apply for a discount instead.
Contact your local council to find out more about business rates exemptions.