Who has to pay Business Rates?

The occupier of a non-domestic property normally pays the business rates - usually this is the owner-occupier or leaseholder. If a property is empty, the owner or leaseholder may be liable to pay business rates on the property after the appropriate exemption period has expired.

What is a non-domestic property?

Non-domestic properties - often referred to as "hereditaments" - are business properties such as shops, offices, warehouses and factories and any other property that is not classed as domestic, such as that occupied by charities and voluntary organisations. In some cases, properties may be used for both domestic and non-domestic use (for example, a shop with a flat above it), in which case both council tax and business rates will be charged on the relevant portion of the property.

Are any non-domestic properties exempt from business rates?

Some types of property are exempt from business rates. This means that no business rates are charged for them. Exempt properties include:

Agricultural land and buildings
Fish farms
Some churches and other places of public religious worship
Sewers
Public parks
Certain property used for the disabled
Swinging moorings for boats

What is a hereditament?

Reference is made in application forms, regulations etc., to a 'hereditament'. Section 115(1) of the General Rate Act 1967 defines a hereditament as being 'A property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list'.

What if I work from home?

Unless you plan to let your holiday home for at least 140 days a year, you will not have to pay business rates on the property. You will have to pay council tax instead.

If you offer bed-and-breakfast accommodation in your own home, to six people (or fewer), you will not have to pay business rates as long as you are living in the property. Instead, you will have to pay council tax on the whole property.

If you let your holiday home for 140 days a year or more, or you provide bed-and-breakfast for more than six people at any one time, you will have to pay business rates on the whole or part of your property. You will still have to pay council tax on the part of your property you use as your home.

How do I find the rateable value of a property?

Click this link to find the rateable value on the BUSINESS LINK website at http://www.2010.voa.gov.uk/rli

Here you can:

look up the rateable value of your property,
look up the rateable value of any property in the rating list,
view your summary valuation, if available, and compare it to others,
make a proposal to alter the rating list entry of your property (make and appeal)
How is my rateable value calculated?

The rateable value reflects the maximum rent which a tenant would be prepared to pay to rent a property under perfect market conditions. Usually, this is determined by analysing rental evidence from properties of a similar size and nature in the locality. The Valuation Office Agency is responsible for assessing the rateable value.

When and why do the multipliers change?

The government normally changes the multipliers every year to move in line with inflation and, in the case of the non-domestic rating multiplier, to take account of the cost of funding small business rate relief. This is so that the value of the money raised through business rates to fund local services each year stays the same.

I have appealed against my rateable value - do I still have to pay?

Yes. Business Rates are payable based on the rateable value which appears in the current Rating List and if you do not pay as shown on your bill, further action will have to be taken, even though an appeal may be outstanding. If your appeal is successful and your rates are reduced, interest is usually payable on any overpayment.

What is a Valuation Tribunal?

You will be notified by the Valuation Officer if your appeal is referred to a Valuation Tribunal. Valuation Tribunals are wholly independent of the local Council and the Valuation Office; however the members of the Tribunal are experienced in hearing Business Rates appeals. The Tribunal will contact you in order to arrange a date for the hearing. A Tribunal hearing will not cost you anything unless you choose to employ someone to present your case.

The Tribunal will take into consideration the case put forward by both parties before deciding the outcome of the appeal. If both parties agree, your case can be dealt with by written representation, without you having to attend a hearing.

If the Tribunal upholds your appeal, the Valuation Officer will have to alter the Valuation List and the Council will issue you with a revised bill.

The Valuation Tribunal's decision is normally final; however an appeal may be made to the High Court, but only on a point of law.

What is revaluation?

A revaluation of the rateable values of non-domestic properties is undertaken by the Valuation Office Agency every five years. The purpose of a revaluation is to update the rateable value in line with changes in the property market.

The valuation date for the 2005 revaluation is 1 April 2003. The new rateable values came in to effect on 1 April 2005.

The valuation date for the 2010 revaluation is 1 April 2008. The new rateable values came in to effect on 1 April 2010.

When do I have to pay my Business Rates?

Your Business Rates are payable in monthly instalments (unless you have chosen to pay in a lump sum or half-yearly). Those instalments are due on the 1st of the month, which means that payments should be on your Business Rate account by that date.

If you pay at a bank or Post Office, you should make your payment at least 6 working days before the due date to ensure that it will be on your account by that date.

If you post your payment, you should post it before the due date so that it will be processed and on your account in time. If using 2nd class mail, you should post it at least 3 working days before the due date.

The best method of payment is by Direct debit. The Council offers two payments dates of the 1st and 15th of each month.

What services do I receive in return for paying my Business Rates?

Your rates are not a payment for specific services but are a contribution from businesses towards all of the services provided by the Council for the community, such as local transport, education and housing, all of which indirectly benefit businesses in the area.

Councils do not have a statutory duty to collect commercial refuse; however we are required to make suitable arrangements to have such waste collected if this service is required.

I have moved out of my business property - will I still have rates to pay?

For the first 3 months there will be no rates payable but, if the property remains vacant after this period and you are still the owner or leaseholder, you will be liable for payment of the business rates in full, unless the property is exempt from Empty Rates. If the property is considered to be industrial the initial exemption period is 6 months.

The government amended the legislation for the financial year 1 April 2009 to 31 March 2010. Business rates are not payable on all empty properties with a rateable value of less than £15,000.

For the financial year 1 April 2010 to 31 March 2011 business rates are not payable on all empty properties with a rateable value of less than £18,000.

With effect from 1 April 2011 business rates will be payable on empty properties that are not exempt after the 3 or 6 month period has elapsed. The new rateable value for exempt properties will no longer be £18,000 but £2,600.

What will happen if you don't pay your Business Rates bill?

The Council acts as the collection agent for the Government and all sums collected by the Council are paid into the Central Pool. Billing, collection and recovery has to be carried out in accordance with the regulations made the Government. If you fail to pay your instalments by the date given on your bill, recovery action will commence in accordance with the statutory regulations.

A reminder will be sent approximately 14 days after the instalment became due.

If you fail to pay the amount shown on the reminder within seven days or any subsequent instalment as it becomes due, a summons will be issued for you to appear in the Magistrates Court. Unless payment is received the Council will apply to the Court for a Liability Order which allows the Council to use external bailiffs or if appropriate to instigate bankruptcy or liquidation proceedings.

Why have you sent me a Reminder/Summons?

By law, the Council must send a Reminder if your instalments are not up-to-date. If you do not bring them up-to-date within 7 days and then keep them up to date, you lose the right to pay by instalments. If you do not comply with the Reminder, you will be sent a Summons and will have to pay court costs as well as your Business Rates.

If you receive a Summons and do not pay in full before the hearing, the Council will apply for a 'Liability Order' which gives the Council the right to use bailiffs to obtain payment, to start Bankruptcy/Liquidation proceedings in certain circumstances, or to ask the Magistrates Court to commit a person to prison.

What if I can't pay the amount on the Reminder / Summons?

If you are having difficulty paying, please contact us at the Business Rate office and we will try to come to an arrangement for payment with you.

You have sent me a Summons and I want to make an arrangement to pay it off, why do I still have to pay the costs?

By law, costs are payable when a Liability Order is obtained. Once a Summons has been issued, the only way to stop the Council from asking for a Liability Order is to pay the full amount before the hearing. Even when an arrangement is made, the Council still has to obtain a Liability Order, but we will not take any of the actions which it allows us to take as long as you keep to the arrangement we have made with you.

Why have you sent me a bill when I already pay rent inclusive of rates to my landlord?

Under rating law, we must issue a bill to the occupier of a property regardless of any agreement, which may exist between the occupier and the Landlord. You may wish to contact your landlord either to arrange that he or she will pay on your behalf, or to renegotiate your rent agreement to remove the rate element. If the account is not kept up to date, action will have to be taken against you, not your landlord, because you are the person who is liable.