What are “Business Rates”?

This Guide is for Small Business Rates

The business rate is a tax on property that is used for business purposes. It is important to understand the business rates and what you must pay if your business is located in a commercial building.

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Why do I need to have Business Insurance?

Taxes called business rates are used Purdue Owl to fund local services. Businesses are charged business rates by the government on commercial properties such as offices, shops and pubs. Most non-domestic properties will attract these rates.

The ‘rateable value of a property is used to calculate business rates. Rateable value refers to a property’s open-market value. Valuations as at 1 April 2015 refer to the last Valuation Office Agency (VOA), which was conducted on April 2017. Revaluation is usually done every five years.

You can estimate your business rates business plural simply by multiplying the rateable value of your property by the appropriate number. More information is available at the end.

  • Use the VOA Business Rates Checker
  • Holiday rates for businesses in 2021-22

To help businesses in the retail, leisure, and hospitality industries through disruptions caused by Covid-19, the government created a holiday on business rates for 2020-21.

After being asked to extend the holiday on for 2021-22, Rishi Sunak, the Chancellor, stated in the most recent Budget that it would last until June.

What relief is Available for Small Businesses?

There are reliefs available for certain properties, but the best for small businesses is the small business rate reduction. This relief is available if your property’s rateable value is less than PS15,000 and if you only use one property.

Full relief is available for properties with a rateable worth of PS12,000 and less

For those who have PS12,001 to PS15,000, the relief gradually drops from 100 percent to zero

Working from home and Business Rates

If you only use a portion of your home to conduct business, you won’t usually have to pay (e.g. if you use a bedroom as an office).

In certain circumstances, however, you may have to pay business taxes on top of Council Tax.

Your property can be divided into business and domestic parts, such as a flat above a store.

You can sell items to those who visit the property

You can hire anyone to your property

You’ve made some changes in your home to make it more conducive to running your business, such as converting your garage.

The VOA can help you determine if you should pay.

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