How to Calculate Business Rates: Step-by-Step Guide

The quickest way to calculate business rates is by multiplying your property’s rateable value by the business rates multiplier.

This gives you an estimate of how much you’ll need to pay. You can easily find your rateable value by using a business rates checker or the Valuation Office Agency’s website.

For a step-by-step guide on how to calculate check business rates, keep reading. We’ll explain how to find your rateable value, how to use a business rates calculator, and how to check if your rateable value is correct.

By the end of this guide, you’ll be able to confidently calculate your check business rates and make sure you’re paying the right amount.

What Are Business Rates and How Do They Work?

Business rates are a type of tax that businesses in the UK pay if they operate from a non-domestic property like shops, offices, or warehouses.

These rates are used by local councils to help fund important services such as waste collection and road maintenance.

To calculate your business rates, the first step is knowing your property’s rateable value. This value is set by the Valuation Office Agency (VOA) and is based on the estimated rental value of your property.

In simple terms, the higher your rateable value, the more business rates you’ll have to pay.

Once you know your rateable value, you multiply it by the check business rates multiplier, which is a number set by the government each year.

This will give you your estimated business rates. If you want a quick answer, you can use a business rates calculator or a business value calculator to work it all out in seconds.

Understanding what are business rates and how they work is essential for every business owner. It helps you plan your expenses and ensures you’re paying the right amount.

Step-by-Step Guide to Calculating Business Rates

Calculating your business rates might seem tricky, but with a simple process, it becomes easy to understand. Let’s break it down into three steps:

Find Your Rateable Value

The first thing you need to do is find your rateable value. This is the amount your property would rent for per year on the open market.

You can use the business rates checker on the Valuation Office Agency (VOA) website to get this value. This is an important step because the rateable value directly affects how much check business rates you’ll pay.

Use the Business Rates Multiplier

Once you know your rateable value, the next step is to apply the business rates multiplier. This multiplier is set by the government and is different for small businesses and larger companies.

Simply multiply the rateable value by the multiplier to get your basic check business rates amount.

3. Check for Any Discounts or Reliefs

Some businesses may qualify for reliefs or discounts, which can lower the total amount you have to pay. For example, small businesses can often apply for small business rate relief. Make sure to check if you’re eligible to reduce your business rates further.

Understanding the Rating List and Rateable Value

To get an accurate understanding of your business rates, you need to know about the rating list and how your rateable value is determined. These two key components are essential in calculating your business rates correctly.

What is the Rating List?

The rating list is a record that contains the rateable value of all non-domestic properties in the UK. The Valuation Office Agency (VOA) updates this list every few years to reflect changes in the property market.

This means your business’s rateable value can go up or down, depending on factors like location or the general economic environment.

You can check the business rates for your property by searching the rating list through the VOA’s business rates checker. This tool allows you to see your property’s current rateable value and other relevant details.

What is Rateable Value?

Your property’s rateable value is the estimated amount it would rent for each year on the open market. This value is not something you decide—it’s assessed by the VOA based on factors like the size of the property, its location, and how it’s used.

The rateable value is the key figure in the calculation of your business rates. The higher the rateable value, the higher your business rates UK will be.

If you think your rateable value is too high, you can challenge it by contacting the VOA and asking for a reassessment.

To ensure you’re being charged fairly, it’s essential to understand the rating list and how to find your rateable value through the Valuation Office Agency’s resources.

Revaluation: What It Means for Your Business Rates

Every few years, the Valuation Office Agency (VOA) reviews and updates the rateable values of properties through a process called revaluation.

This ensures that the valuation office business rates you pay reflect the current rental value of your property. If you’re unsure about changes in your rates, you can easily find business rates online to check if any adjustments have been made.

While revaluation can sometimes lead to higher rates, it could also result in lower rates if property values in your area have decreased.

Why Does Revaluation Happen?

Revaluation helps keep the business rates system fair. Over time, property values change, and the VOA conducts revaluations to ensure businesses aren’t paying too much or too little based on outdated figures.

For example, a thriving business district might see an increase in rental values, which would cause an increase in business rates, while areas that have seen a decline might get lower rates.

How Revaluation Affects Your Business

After a revaluation, your rateable value might change, which will impact how much you pay in business rates. It’s important to keep an eye on these updates because they directly affect your costs.

If your rateable value goes up significantly, you might want to plan for the increased business expenses. On the other hand, if your rateable value decreases, it could be a relief for your budget.

If you’re concerned about how revaluation affects your rates, or if you think your rateable value is incorrect after revaluation, you can contact the VOA for help.

Also read Business Property Relief: Reduce Inheritance Tax

What to Do If You Think Your Rateable Value is Too High

If you believe that your rateable value is higher than it should be, don’t worry—there are steps you can take to correct it. A higher-than-expected rateable value can lead to higher business rates, which may strain your budget.

Fortunately, the process to challenge or appeal your rateable value is straightforward.

Step 1: Check the Details of Your Property

Start by reviewing the details of your property as listed by the Valuation Office Agency (VOA). Use the business rates checker to ensure the property size, usage, and other information are correct.

Sometimes, simple errors like incorrect measurements or property descriptions can lead to a higher rateable value.

Step 2: Request a Reassessment

If everything seems accurate but you still think your rateable value is too high, you can contact the VOA and request a reassessment. This process involves providing evidence to show that your property’s rateable value should be lower.

For example, if similar properties nearby have lower rateable values, you can present that as part of your appeal.

Step 3: Appeal the Decision

If your reassessment request is denied or you’re not happy with the result, you can formally appeal the decision. This can take some time, but if successful, it can lead to reduced business rates and some financial relief.

How to Appeal Your Rateable Value

If you’re unhappy with your rateable value, appealing it might be the best way to ensure you’re paying the right amount in business rates.

This process allows you to formally challenge the value set by the Valuation Office Agency (VOA) if you think it’s too high. Here’s how to go about it.

Step 1: Gather Evidence

Before you appeal, it’s essential to gather solid evidence that supports your case. This can include information about similar properties in your area that have lower rateable values, changes in the property market, or any errors in the VOA’s assessment of your property. Having the right data strengthens your appeal.

Step 2: Submit a Check

The first stage of the process is known as the Check stage. Here, you’ll review the details the VOA has about your property and highlight any inaccuracies.

You can do this by logging into the VOA’s online system and using their business rates checker to compare your property’s details with others. If you find anything wrong, you can submit corrections during this stage.

Step 3: Submit a Challenge

If the Check stage doesn’t resolve your concerns, the next step is to move on to the Challenge stage. This is where you formally challenge your rateable value by submitting your evidence to the VOA.

Be clear about why you believe the value is incorrect and provide all the supporting documents.

Step 4: Appeal

If the Challenge stage still doesn’t lead to a satisfactory outcome, you can take it a step further by appealing to an independent tribunal. This is the final option if you feel your case hasn’t been fairly handled.

Keep in mind that the tribunal’s decision is binding, so it’s important to be fully prepared before taking this step.

Contacting the Valuation Office Agency (VOA)

At any point during your journey to understand or appeal your business rates, you might need to reach out to the Valuation Office Agency (VOA).

The VOA is responsible for assessing and setting the rateable value of properties, and they can help answer any questions or resolve issues regarding your property’s business rates.

When Should You Contact the VOA?

You should consider contacting the VOA if:

• You believe your rateable value is too high or incorrect.
• You notice errors in your property details listed in the business rates checker.
• You need to update your property information (for example, if you’ve made changes to the property).
• You want to appeal your rateable value or get advice on the process.

How to Contact the VOA

The VOA has several easy ways for you to get in touch. You can visit their website to submit queries, use their online tools to check your property details, or call their customer service team for direct assistance.

They are there to guide you through the process of understanding and potentially adjusting your business rates.

It’s always best to provide as much information as possible when contacting the VOA, whether it’s about a query or an appeal. This will help them assist you more efficiently and ensure you get accurate answers.

Stay Informed with VOA Updates

In addition to assisting with business rates, the VOA provides regular updates on changes to the system, such as upcoming revaluations or government relief measures. Keeping up to date with these can help you stay ahead and better manage your business costs.

Also read Corporate Strategy vs Business Strategy Explained

Conclusion:

Understanding how to calculate business rates is essential for managing your business expenses effectively. By knowing your property’s rateable value and using the business rates multiplier, you can easily estimate how much you’ll need to pay.

Tools like the business rates checker and business rates calculator make this process even simpler, helping you stay informed and up to date.

Whether you’re navigating the impact of revaluations, seeking relief due to COVID-19, or challenging a high rateable value, staying proactive with your business rates is crucial.

Don’t hesitate to contact the Valuation Office Agency for help or to appeal your rateable value if necessary. With the right knowledge and tools, you can ensure your business is being charged fairly, leaving you free to focus on what matters most—growing your business.

FAQs:

Business Rates Calculator

A business rates calculator is an online tool that helps you quickly calculate your business rates by using your rateable value and the business rates multiplier.

Simply input your property’s details, and the calculator will provide an estimate of your business rates, saving you time and effort.

How to Calculate Business Rates Formula

The formula to calculate business rates is simple:

$$\text{Business Rates}=\text{Rateable Value}\times \text{Business Rates Multiplier}$$

Once you know your rateable value, multiply it by the business rates multiplier, which is set by the government annually. This gives you an estimate of how much you’ll need to pay.

Small Business Rates Relief

If you run a small business, you may qualify for small business rates relief. This relief can significantly reduce the amount you pay in business rates, or in some cases, exempt you from paying them altogether.

To qualify, your property must have a rateable value below a certain threshold, and you must be the only business occupying the property.

Business Rates UK

In the UK, business rates apply to non-domestic properties such as shops, offices, and warehouses.

Each property has a rateable value assigned by the Valuation Office Agency (VOA), which is used to calculate the business rates you need to pay. Business rates are a key part of funding local services across the country.