How business rates are calculated
Non-domestic rates, or business rates, collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services.
Mazar's RULING – The effect on business ratepayers
In 2016 a supreme court case changed the way that the Valuation Office Agency (VOA) assessed the rateable value of premises where there is more than one occupier.
This may have resulted in some ratepayers being liable for multiple rating assessments and they may have lost any entitlement to small business rates relief.
The government have decided to introduce legislation that reverses this in a number of cases.
If you've been affected by this ruling, we suggest that you contacxt the VOA to discuss this matter.
How are business rates calculated?
The local authority works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers - the standard non-domestic rating multiplier and the small business non-domestic rating multiplier.
The government sets the multipliers for each financial year for the whole of England. The multipliers change each year in line with inflation.
From 1 April 2012 to the 31 March 2017, ALL occupied properties with a rateable value LESS than £18,000 will automatically be charged using the small business multiplier (unless in receipt of mandatory or rural relief.
From the 1s April 2017, ALL occupied properties with a rateable value of LESS than £51,000 will automatically be charged using the small business multiplier (unless in receipt of mandatory or rural relief).
|Year||Multiplier||Small business multiplier|
All rateable values are reassessed at a general revaluation to ensure bills paid by any one ratepayer reflect changes over time in the value of their property relative to others. This helps maintain fairness in the rating system by updating valuations in line with changes in the market.
The current rating system is based on the 2010 revaluation. The next revaluation will take place on the 1 April 2017, based on rental values at 1 April 2015. In the year of revaluation the multipliers are rebased to account for overall changes to rateable value and to ensure that revaluation does not raise extra money for government. This decision is made by Central Government not the local authority.
More information on revaluation 2017 can be found at: www.gov.uk/government/organisations/valuation-office-agency.
Extension of transitional relief
The Government announced in the Autumn Statement on 3 December 2014 that it would extend transitional relief for small and medium properties. This is known as extended transitional relief.
Properties that will benefit are those with a rateable value up to and including £50,000 who would have received transitional relief in 2015/16 or 2016/17, had the existing transitional relief scheme continued in its current format.
In line with the existing thresholds in the transitional relief scheme, the £50,000 rateable value threshold is based on the rateable value shown for 1/4/10 or the substituted day in the cases of splits and mergers. This relief will be applied automatically to your bill if you are a qualifying property.
Luton Borough Council, Town Hall, George Street, Luton, Bedfordshire, LU1 2BQ
Tel: 0300 7900349 or minicom 01582 414367
Fax: 01582 546977