Business rates explained

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), an agency of the Inland Revenue.

It draws up and maintains a full list of all rateable values, available on their website at http://www.voa.gov.uk/. The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation that came into effect on 1st April 2005, this date was set as 1st April 2003.

The Valuation Officer may alter the value if he believes that the circumstances of the property have changed. The ratepayer (and certain others who have an interest in the property) can also appeal against the value shown in the list if they believe it is wrong.

Appeals and queries regarding rateable values should be made direct to: The District Valuer and Valuation Officer, Palting House, Trinity Road, Folkestone, Kent CT20 2TP. Alternatively, telephone 01303 852900. Further information about making appeals can be found on the VOA website or at your local valuation office.

Even if you have lodged an appeal or you intend to, you must still pay rates based on the rating assessment set by the Valuation Officer until such time as it is amended. If the rateable value is reduced or increased by the Valuation Officer, the amount you have to pay will be amended accordingly.

Successful appeals against values shown in the rating list that came into force on 1st April 2005 will normally be backdated to that date, although there are exceptions to this. Further information about these arrangements may be found on the VOA website.

The national non-domestic rating multiplier

The local authority works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier.  From 1 April 2005 there are two multipliers; the standard non-domestic rating multiplier and the small business non-domestic rating multiplier.  The former is higher, to pay for small business rate relief.  The government sets the multipliers for each financial year for the whole of England.  The government normally changes both the multipliers every year in line with inflation.  By law, the multipliers cannot go up by more than the rate of inflation apart from some minor adjustments to counteract losses from appeals and, in relation to the standard multiplier, to pay for small business rate relief.  In the year of a revaluation 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.  The current and previous years multipliers are shown below.

 Transitional Arrangements

Property values normally change between each revaluation.  Transitional arrangements help phase in the effects of these changes by limiting increases in bills.  To help pay the limits on increases in bills, there also have to be limits on reductions in bills.  Under the transitional scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier).

The scheme applies only to the bill based on a property at the time of the revaluation.  If there are any changes to the property after 1 April 2005, transitional arrangements will not normally apply to the part of the bill that relates to any increase in rateable value to those changes.  Any transitional adjustments are shown on the front of the bill.

Further information may be obtained from the Business Rates Team or the website http://www.businesslink.gov.uk

Rating advisors

Ratepayers do not have to be represented in discussions about their rateable value of their rate bills.  Appeals against rateable values can be made free of charge.  However, ratepayers who do wish to be represented should be aware that members of the Royal Rating and Valuation (IRRV -website http://www.irrv.net) 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.