How to Calculate Business Rates in the UK?

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How to Calculate Business Rates in the UK

Valuation office agencies determine the business rates that apply to non-domestic property in the United Kingdom. VOA prescribes multipliers that you can use to calculate the business rate of your business property.

There are plenty of websites where you can calculate the business rates, but certainly, calculating the business rates is not a complex process, and you can do it on your own. To help you with that, we bring you this article in which we have mentioned how you can calculate business rates in the UK.

Basics of Business Rates

Basics of Business Rates

For jumping onto the calculation part of the business rates, let’s understand how it is determined and how it works. As the name suggests, this rate applies to the properties that are used for business purposes.

The entire control of the business rates and the business rates relief lies with VOA, which works along with the area’s local council. The business rates are determined by the property’s rateable value prescribed by the valuation office agency from a particular date.

Business Rates Relief

Business Rates Relief

You can apply for business rates relief that will decrease the amount you will have to pay to the local council.  Business rates relief is not simply granted to everybody. A proper evaluation and assessment happen by the local council and valuation of his agency. If you are considered eligible, you get the rate relief on a property.

Calculation of Business Rates in the UK

Calculation of Business Rates in the UK

For calculating your business rate, you must be aware of the rateable value of your property. To know the property’s rateable value, you should see the market value of your place as of 1st April 2015. The valuation of his agency prescribes this date, and the market value of a property after this date is only eligible. So when you know the rateable value of your property, the calculation of business rate becomes extremely easy.

The valuation office agency has determined a multiplier that you have to use to calculate a business property’s business rate. To know the business rate of your property, all you have to do is multiply the rateable value of your property with the multiplier determined by the agency. For a better and more precise understanding of this calculation process, let’s take an example. Let’s consider you have a business property that has a rateable value of £12,000.

So to know the business rate of your property, you have to multiply £12,000 from the multiplier of the VOA. The multiplier is 0.491p. After the multiplication of the rateable value with the multiplier, you get £5892. This is the amount you have to pay to the local council as the business rate of the business property.

Multiplier Used For Calculating Business Rates

The valuation office agency prescribes two multipliers. The first one is the standard multiplier, and the second one is the small business multiplier.

If the rateable value of your property is £51,000 or more than that, then you will have to use the standard multiplier for calculating the business rate. But if the rateable value of your business property is less than £51,000, then you will have to use this small business multiplier.

Year    Standard multiplier    Small business

2021 to 2022    51.2p                  49.9

2020 to 2021    51.2p                  49.9p

2019 to 2020    50.4p                  49.1p

2018 to 2019    49.3p                  48.0p

2017 to 2018    47.9p                  46.6p

2016 to 2017    49.7p                  48.4p

You can refer to the multiplier that we have mentioned above as per the year to calculate the business rate for the rateable value of your business property development. The calculation of business happened differently in Northern Ireland and Scotland.

How To Take Care of Wrong Business Rates?

How To Take Care of Wrong Business Rates

Often there are chances that the business rates evaluated by the valuation office agency might be wrong. If you feel that the business rate of your property is incorrect, you can send an appeal to VOA business rates on different grounds.

Grounds to Make an Appeal

  • The valuation of the property was wrong when the list was created.
  • Change in the property or the surrounding area that is not mentioned in the rateable value. It can be roadworks as well.
  • The change that VOA has made in the property valuation is wrong, or in some cases, they have not made any changes.
  • The date of valuation in the document is wrong.
  • The property should be divided into multiple numbers.
  • The property details mentioned in the rating list are incomplete or wrong.

There are many do’s and don’ts that you need to keep in mind when it comes to your business rates.

You must take every step carefully because if you don’t, it would be a massive loss for you. You can apply for the business rates relief and get a discount on the value of your property.

Summing It Up

This article discusses how you can calculate the business days in the United Kingdom. We hope that the way this article explained the entire process was simple and understandable for you. Before applying for the business rates reduction or doing anything related to the business rates, you must acquire sufficient knowledge. For that, you can refer to plenty of government websites that contain knowledge related to business rates. Every year after the revaluation, the multiplier you have to use to calculate the business rate changes by the valuation office agency, so you must keep an eye on the multiplier.

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