What are business rates?
When you start in business you will probably have to pay business rates for your premises – sometimes even if you work from home.
Normally, the occupier of a non-domestic property has to pay business rates, either as an owner-occupier or a leaseholder. Shops, offices, warehouses, factories nursing homes, childcare nurseries, hotels, restaurants and guesthouses are all non-domestic properties and all have to pay business rates. Not many properties are exempt, but those that are include places of religious worship, agricultural land and buildings, fish farms, public parks and some property used for disabled people.
When you start your business, notify the council, so you pay the correct rate. You may get up to 50% reduced liability if your rateable value is less than £15,000.
What happens if I work from home?
If you work from home the council may charge business rates for the part of the property you use for work and you will pay council tax in the normal way for the remainder of the property. Each case is different, so check with the Valuation Office Agency for advice. Tel: 0845 602 1507 or use the website www.voa.gov.co.uk .
How are rates calculated?
The rateable value is a professional view of the annual rent for a property if it were available vacant and to let on the open market. The rateable values are re-valued every five years, and the next revaluation is April 2010. There are some business rate reliefs. Different rates and rules apply in Scotland, Wales and Northern Ireland.
How do I pay business rates?
Normally, the occupier of the property has to pay the business rates. This is usually the owner or leaseholder of the property, and if you rent this may already be included. If it is, then the landlord is responsible for the payments. Rates bills are sent in March or April and you normally pay in ten equal monthly instalments. If you miss your deadline to pay after being sent a reminder, you will have to pay the whole outstanding balance for the year. If you still do not pay you will be taken to court to recover the debt. If the premises are vacant there are no rates to pay for the first three months and after that it is 50% of the normal rate. Some premises, such as factories and listed buildings do not pay if the building is empty.
Which businesses get rates relief?
Charities and community amateur sports clubs get a reduction of 80%, and some other non-profit organisations can apply for up to 100%. Certain rural businesses, such as village shops and petrol stations may also be able to claim as well as some non-farming businesses. If your rateable value is below £10,000 you can get small business rate relief on a decreasing sliding scale. Look at the www.mybusinessrates.gov.uk website for specific details. There is also transitional relief when the rates go up, and this should be automatically included in your bill.
Can I challenge my rate?
Yes. If you think it is inaccurate, or there is a change in use or any other change in circumstance. Contact the Valuation Office Agency Helpline: 0845 602 1507 in the first instance, and you can appeal if you are not satisfied. If you do appeal you must pay full rates until a decision is reached.
