Business rates explained

Cripling business rates for SMEs must be tackled, Adams Moore explains.A new campaign launched just this week calling for a halt on crippling business rate rises has been launched by London newspaper Evening Standard, bringing this issue back under the spotlight.

The chancellor George Osborne announced a cut in business rates for small businesses in this year’s budget, but some, including business secretary Sajid Javid, have said his permanent rate relief promise didn’t go far enough – particularly in light of the new dividend tax.

Whilst this is something said to be affecting businesses in London the most, it is an issue across the county and we are often asked about business rates by our clients. Below are some facts about business rates.

What are business rates?

Business rates are a tax made on the occupancy of a non-domestic property – those such as pubs, offices, shops, warehouses or factories – and fall onto the occupier of the property, not the landlord. For those working from home, business rates may be applicable if the portion of the home used for business is used solely for that purpose, or has been adapted for business purposes.

What is the business tax rate?

 It has to be calculated for each individual business based on the rateable value, which takes into account size and usage, therefore not all of the property might fall into the same rate bracket if different areas are used for different things. In a standard case, to find the business rate go to the Valuation Office Agency website which offers a postcode finder to ascertain the property valuation, and also the multiplier to use based on this. Then it is simply a case of multiplying the property valuation by the given multiplier. For more complicated cases involving a property with multiple uses, it would be wise to seek professional help.

Paying business rates

Rate bills are issued by the local council, usually in March or April. In most cases, they are payable in monthly instalments. Sometimes the landlord may include rates within the rent, in which case it is their responsibility to make the payment to the council.

Who pays?

Charities and rural based businesses get a high rate relief, but there are also relief schemes available to small businesses. It is worth checking with the local council to find out more about this as not all relief will be applied automatically.

If any of our clients have any queries or concerns about business rates or require any other help with their business, they should get in touch with Tessa on 01827 54944 or email