Anyone running a business needs to take business rates into
account when planning their finances. Here's our guide to
everything you need to know.

What are business tax rates?

Business tax rates are simply are simply a tax on properties
that are used for commercial purposes, and are used to pay for the
local borough's services such as fire brigades and police.

Who is responsible for paying business tax
rates?

Typically, the owner of the property will be held responsible
for paying the rates, and they will also be the ones who the bill
is sent to.

On some occasions it's possible that you may be responsible for
paying business rates even if you're renting: some landlords will
include it in the total cost of rent.  Needless to say, you'll
need to check this in advance!

If you're the person responsible for paying, you'll need to
notify the council if you move, or if you're going to start a new
business elsewhere.

How are business rates paid?

Bills for business rates will usually arrive in March or
April.  Typically, they will be paid in ten equal monthly
instalments, much the same as the way residential council tax is
paid.

If you miss a payment for any reason, you'll receive a reminder
giving you a week to pay off the debt.  If you then continue
to be negligent, you'll usually receive a request to pay the whole
year's worth of business rates at once.  Again, this is not
dissimilar to the way council tax is managed.

How are they calculated?

Luckily for anyone who's less strong on calculations, your local
authority is responsible for working the exact amount out, and
it'll be shown on your business rates bill.  However, it's
usually worth knowing it yourself in advance anyway: it'll make it
easier for you to plan your finances.

Here's how to work it out

Your local council will work out your business rates by
multiplying the rateable value of your property by a multiplier
known in this context as 'poundage'.

The rateable value of your property is calculated by the
Valuation Office Agency (VOA), a government-owned body.  (You
can actually find out your rateable value by putting your post code
into the VOA's rating list).  The rating list is updated once
every five years, and the multiplier is decided by the Government
at the start of April each year.

Small business rate relief

If your rateable value is less than £15,000, you'll likely
qualify for Small Business Rate Relief (SBRR), as long as you:

Only occupy one business property in the UK

Own two but the rateable value of the second is less than
£2,200

The total value of all your properties is less than
£15,000.

How to apply

You'll need to apply to your local authority if you want to
obtain SBRR.  If accepted, your application will remain in
effect until the rating list (again, updated every five years) is
renewed.  You'll then need to re-apply.  You can apply
for relief as soon as you move into the property.

If your property has a rateable value of less than £5,000 you'll
qualify for 50 per cent relief.  If it's between £5,000 and
£9,999, relief decreases on a sliding scale at a rate of 1 per cent
relief for each £100 increase in rateable value.

Again, if you're uncertain about any of this, you can obtain
more information from your local council.

Do I need to pay business rates if I work from
home?

It's possible that in certain cases you may need to pay business
rates if you have an area of the house that's specifically used for
business purposes.  Again, check with your local
authority.

Are business rates applicable to empty
properties?

If the rateable value is less than £15,000 and the property is
empty, you are usually exempt.  These rates can change
however, so do check.  Empty properties do not qualify for
SBRR however.

What if I have multiple businesses?

If you run multiple businesses, SBRR will depend on your
individual circumstances.

What if I can't afford to pay the bill?

Contact your local council.  Depending on your
circumstances, they may be able to change the dates and amounts of
your payment plan.

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