Business rates are charged on most non-domestic properties including shops, offices, warehouses, factories, pubs and holiday rental homes. They are essentially a form of tax collected by Councils and used to fund local services.
How are Business Rates Calculated?
Business rates are calculated using the property’s “rateable value” and a figure called the “multiplier.” The rateable value is the open market rental value of the property, which is based on an estimate by the Valuation Office Agency, and takes into account the size and usage of the property. The multiplier figure is a figure set by the government every year.
You can check the rateable value of your property on the following link: https://www.gov.uk/correct-your-business-rates
What is Revaluation?
Normally, every five years, there is a revaluation where all properties are given a new rateable value and the multiplier is revised. The figures are adjusted to reflect changes in the property market. The most recent revaluation came into effect on 1 April 2017 and is based on rateable values from 1 April 2015.
What does this mean for those occupying non-domestic properties?
In areas where property values have risen, there is more scope for the business rates to increase. Similarly, regions where property values have fallen may see a decrease in their business rates.
Needless to say, it is always worth reviewing and checking any revised business rates figures and ensuring that your budgets are flexible enough to accommodate any increase.
Certain properties are also eligible for business rates relief or are exempt. For further information on this, you may wish to speak to your local council or a rating surveyor.
If you would like to discuss any of the above, please do not hesitate to contact our Commercial Property team at Foskett Marr Gadsby & Head LLP (based in Epping and Loughton) on 01992 578 642 (https://www.foskettmarr.co.uk/index.php/our-team/commercial-property-solicitor-essex/.)