Business rates are applicable to most commercial properties such as offices, shops, factories, pubs, and even holiday homes if they’re rentals. These rates are like the business equivalent of council tax on a home. Council’s report that business rates are necessary to help pay for local services in the area, such as keeping the community safe and a pleasant place to live. Most businesses will be required to pay these bills in ten equal instalments throughout the year.
To help you gain a better understanding of what business rates actually are, see below a simple guide:
How Are Business Rates Calculated?
Business rates depend on a number of different factors. This helps the council’s valuation team decide which business rates bracket your company will fall in. The following aspects will all be taken into consideration:
- The rateable value of the building
- The business rate multiplier (which can change from year to year)
- Any relief schemes you may qualify for
Each council has its own valuation process, which means that rates can fluctuate depending on where in country your business is based. The valuation officer is tasked with deciding the rateable value of your premises. This is essentially their opinion on what the property would be worth if it were vacant and on the market.
If You Run A Home Business
You’d be forgiven for thinking that you might not have to pay business rates on a home business, but unfortunately that isn’t always the case. If you work from home, you may need to pay business rates on the part of the house that you use for work. The rest of the property now used for business would still be liable for council tax. This is always judged on a case by case basis.
The valuation officer will take into account what kind of work you do and how much commercial work is done in the home. You’re more likely to pay business rates if you’ve got a separate area used specifically for your business, such as a converted home office or outbuilding. On the other hand, if you’re operating from a laptop on your sofa, then you may be exempt from business rates.
What Is The Small Business Rates Relief?
In some cases for small businesses, standard business rates may not apply. There are a range of reliefs available for certain properties. You may be able to get business rates relief from your local council to reduce your bill. This should be automatic but you might need to apply depending on your area.
The current rule is that if your property has a rateable value of less than £15,000, a relief is available. This is only applicable, however, if your business uses one property. Full relief is available on those properties with a rateable value of £12,000 or less.
If You Think You’re Paying The Wrong Rates
This process isn’t fool proof, and sometimes councils can get it wrong. If you believe that you’re paying incorrect business rates, then there are a couple of steps you can take. Firstly, you should refer to the valuation officer’s rateable value for tour property to check whether there are any issues. If this doesn’t show any problems, then you may want to compare it with similar properties in your area.
Should either of these options lead you to suspect you’re paying the wrong rates, then you may wish to contact the chartered surveyors Manchester residents often use to have an independent valuation. They can also help you if you believe you’re owed money because of overpaying in previous months.