Business rate changes as rateable value update takes effect

rateable value update

Business rate changes as rateable value update takes effect

The Valuation Office Agency (VOA) has published the official rateable values for non-domestic properties and all businesses in England and Wales. 

Local authorities use the reevaluation list to determine business rates to levy offices, shops, pubs, and warehouses. Most non-domestic properties will attract business rates, even if only part of the building operates for non-domestic purposes. 

Now in place is a business rates support package worth around £13.6 billion for the next five years, including measures to freeze the business rates multipliers at 49.9p and 51.2p in 2023-24, seeing bills 6% lower than without the freeze. 

Changes to business rates in 2023:

  • The multiplier represents the number of pence in each pound of the rateable value that will be payable in business rates before any relief or discounts are applied.
  • A transitional relief scheme will cap bill increases caused by changes in rateable values at the 2023 revaluation.
  • For retail, hospitality, and leisure business rates relief will be increased from 50% to 75% (up to £110,000 per business) in 2023-24.
  • The increases are capped at £600 per year from April 2023 if businesses lose their eligibility for small business rates relief due to the revaluation.

The updated values reflect the property market as of 1 April 2021. While some sectors benefit, others have been hit hard by the Business Rates Revaluation 2023. 

How are business rates calculated?

The rates are calculated on the property’s ‘rateable value’, the estimated value on the open market.

The rateable value for your property is not what you pay in business rates or rent. Your council uses the rateable value to calculate your business rates bill.

What is the Small Business Rates Relief?

The Small Business Rate Relief applies if the property has a rateable value of less than £15,000 and generally, if the business only uses one property:

  • Full relief is available on properties with a rateable value of £12,000 or less
  • For those between £12,001 and £15,000, relief goes down gradually from 100% to 0%

If your company does not qualify for small business rate relief your bill is calculated using the lower multiplier (for properties with a rateable value below £15,000).

Need help with understanding business rates or what the rateable value update means for your company? Contact us today