How are business rates calculated?

Overview

Your annual business bates bill is calculated and collected by the council.

The council multiples the rateable value of an individual property, which is set by the Valuation Office Agency with a 'multiplier' (the national non-domestic multiplier) set by the government.

It is set for the whole of England and is effective from 1 April each year. The multiplier represents the number of pence in each pound of the rateable value that will be payable in business rates before any relief or discounts are applied. The calculation gives the amount of rates payable for the year.

The government reviews the multiplier each year to reflect changes in inflation (using the retail price index). The chancellor recently announced that the government intends to cease use of the retail price index figure (RPI) and use the Consumer Price Index (CPI) instead.

By law, the multiplier cannot increase or decrease by more than the rate of inflation, except in the year of a revaluation. In that year it is set at a level which will keep the total amount raised in rates after the revaluation the same as before, plus inflation for that year. Usually, revaluation takes place every five years, the last one was in April 2010, the next is in 2017.

Rateable value and multipliers

The amount of business rates you have to pay are largely determined by two factors:

  1. The rateable value of your property
  2. The business rates multiplier

Contents

Rateable value

Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is normally set by the Valuation Office Agency (VOA). The VOA draws up and maintains a searchable list of all rateable values.

The rateable value of your property will be shown on the front of your bill. The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date.

Appealing your valuation

You can click, find and review your rateable value on the VOA’s website.  If you have reason to believe that your 2017 rateable value is not correct, follow the instructions provided on the site.  You will need to do the following (not available until 1 April 2017):

  • Check- review and confirm the facts about your property held by the VOA once the facts are established, explain why you believe your valuation is wrong.
  • Challenge-An appeal on your 2017 rateable value is not possible, and may not be necessary, until you have completed Check and Challenge.

 

Payments whilst on appeal

If you have made an appeal, you need to continue paying your business rates according to the latest bill you have been sent. If you withhold payment we will take recovery action to collect any unpaid amounts, which may result in you incurring court costs.

If your appeal is successful and the amount to pay is reduced, we will issue a revised bill and refund any overpayment, which may include interest.

Interest will not be payable if a liability order has been obtained at the Magistrates' Court to recover any unpaid amount shown on the bill based on the original rateable value.

The effect of successful appeals against values shown in the rating list that came into force on 1 April 2010 will normally be backdated to the beginning of the financial year in which the appeal was made, although there are exceptions to this.

Rating advisers

Ratepayers do not have to be represented in discussions about their rateable value or their rates bill - appeals against rateable values can be made free of charge. However, if ratepayers who do wish to be represented they should be aware that members of the Royal Institution of Chartered Surveyors (RICS - www.rics.org.uk) and the Institute of Revenues Rating and Valuation (IRRV - www.irrv.org.uk) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
 
Before you employ a rating adviser, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.
 
If your appeal to the Valuation Officer is not resolved within three months, it will automatically be referred to a Valuation Tribunal to decide. The Valuation Tribunal is independent of both the Valuation Officer and Brent Council and will contact you to arrange a hearing, sending you a leaflet to explain how the process works.

Business rates multiplier

We work out your business rates bill by multiplying the rateable value of your property by the multiplier which the Government sets from 1 April each year for the whole of England.

The Government normally changes the multiplier every year to move in line with inflation. For more information about the multiplier and and to make a calculation for your business visit the rates calculation section on www.gov.uk.