TL;DR
Business rates are a property tax on non-domestic premises in England. This guide explains how they are calculated, what the 2023 revaluation means for bills, and which reliefs are available to reduce your liability.
UK Finance | Money Guides
Business rates, formally known as the National Non-Domestic Rate (NNDR), are a property tax levied on most non-domestic premises in England. They apply to shops, offices, warehouses, factories, and most other commercial properties. The tax is administered by local authorities but collected under a framework set by central government, with receipts pooled nationally.
How Business Rates Are Calculated
A business rates bill is calculated by multiplying the rateable value of a property by the appropriate multiplier. The rateable value is an estimate of the annual rental value of the property on the open market at a specified antecedent valuation date. The Valuation Office Agency (VOA) is responsible for setting and maintaining rateable values.
The standard multiplier for 2025 to 2026 is 54.6 pence in the pound. The small business multiplier is 49.9 pence in the pound, which applies to properties with a rateable value below 51,000 pounds where the occupier does not occupy any other properties. These multipliers are set annually by the government and since 2017 have been uprated in line with CPI inflation.
The 2023 Revaluation
The Valuation Office Agency completed a revaluation of all non-domestic properties in England with effect from 1 April 2023, using rental values as at 1 April 2021 as the antecedent valuation date. This was the first revaluation since 2017. The revaluation resulted in significant shifts in rateable values between property types and locations, with distribution warehouses seeing substantial increases reflecting the rise in logistics rents during 2020 and 2021, while some town centre retail properties saw reductions.
Transitional relief arrangements are in place to phase in large increases or decreases in bills following the revaluation. Properties facing large upward movements are subject to caps on annual bill increases until the full revalued amount is reached.
Small Business Rate Relief
Small Business Rate Relief (SBRR) provides 100 percent relief from business rates for properties with a rateable value of 12,000 pounds or less where the occupier occupies only one property. Relief tapers from 100 percent to zero between 12,001 pounds and 15,000 pounds rateable value. Eligible businesses do not pay any business rates at the lower threshold.
Other Reliefs
Retail, Hospitality and Leisure Relief has been provided since 2020 and gives eligible properties in those sectors a percentage discount on their rates liability. The discount has varied by year and is subject to a cash cap per business. Charitable relief provides an 80 percent mandatory reduction for registered charities and can be topped up to 100 percent at local authority discretion. Rural Rate Relief applies to certain businesses in settlements with a population below 3,000.
Appealing Your Rateable Value
Businesses that believe their rateable value is incorrect can challenge it through the Check, Challenge, Appeal (CCA) process administered by the VOA. The process requires first checking the property details held by the VOA, then challenging the rateable value if there is a valid reason for disagreement, and finally appealing to the Valuation Tribunal for England if the challenge is unsuccessful.
Frequently Asked Questions
How are business rates calculated?
Business rates are calculated by multiplying the rateable value of the property by the multiplier. For 2025 to 2026, the standard multiplier is 54.6 pence per pound of rateable value.
What is Small Business Rate Relief?
Small Business Rate Relief provides 100 percent relief for properties with a rateable value of 12,000 pounds or less where the occupier has only one property. Relief tapers to zero at 15,000 pounds.
How do I challenge my rateable value?
Use the Check, Challenge, Appeal process on the Valuation Office Agency website. Start by checking that your property details are correct, then submit a challenge if you believe the rateable value is wrong.
