Business Rates

Non-Domestic Business Rates

Non-Domestic Business Rates (NDR), also known simply as business rates, apply to all properties consisting of land or buildings that are not classified as residential. These include shops, offices, factories, and less conventional properties such as beach huts and village halls. Properties with mixed-use, such as flats above shops, may have both a non-domestic assessment for business rates and a council tax band.

How Business Rates Are Calculated

The Valuation Office Agency (VOA) is responsible for assigning rateable values to properties. These values are used by local councils to calculate business rates bills. The calculation involves:

• Rateable Value: This is based on the rental value of the property as of a specific valuation date, assuming the property is vacant and in reasonable repair. Properties like schools and hospitals may be valued using a “contractor’s test,” while those linked to turnover, such as pubs, use the “receipts and expenditure” method.
• Valuation Methods: Retail properties are typically valued using the Net Internal Area (NIA) combined with zoning, while warehouses and industrial units are measured using the Gross Internal Area (GIA). The VOA adjusts values for specific property features, such as air conditioning or renewable energy systems.
• Valuation Lists: New valuation lists, which determine rateable values, are prepared every five years. The latest list came into effect on 1 April 2023, reflecting updated property values.

Business Rates Relief and Exemptions

Certain properties may qualify for business rates relief or exemptions, such as:

• Exempted Buildings: Agricultural land, fish farms, public parks, and places of worship.
• Empty Properties: Properties empty for up to three months are exempt, with extended relief for industrial premises, listed buildings, and those with a rateable value under £2,900.
• Charities and Sports Clubs: Properties used for charitable purposes or as amateur sports clubs may receive additional relief.

These measures aim to support businesses while encouraging the reuse of vacant properties.

Recent Updates and Legislation

The Non-Domestic Rating Act 2023 introduced reforms to improve the fairness of business rates, including more frequent revaluations (every three years) and enhanced transparency in valuations. The government is also exploring digitalisation initiatives to streamline processes for businesses.

Useful Links

• Valuation Office Agency (VOA) Business Rates Information Provides detailed guidance on how business rates are calculated and applied, including links to the latest valuation lists.
• Non-Domestic Rating Act 2023 Overview Offers a comprehensive explanation of the latest legislative changes affecting non-domestic rates.
• Business Rates Relief and Exemptions Guidance Explains the reliefs and exemptions available to businesses, including eligibility criteria and application processes.

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