What are business rates and how are they set?
What are business rates?
Business rates or non-domestic rates are collected by the council and are the way that those who occupy a non-domestic property contribute towards the cost of local services.
Under the business rates retention arrangements introduced from 1st April 2013, the council keeps a proportion of the business rates paid locally. This provides a direct financial incentive for us to work with local businesses to create a favourable local environment for growth since we will benefit from growth in business rates revenues. The money, together with revenue from council tax payers, revenue support provided by the Government and certain other sums, is used to pay for the services provided by the council across the borough.
Further information about the business rates system is available at www.gov.uk
How are business rates set?
The council 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 (usually higher, to pay for small business rate relief)
- The small business non-domestic rating multiplier.
The multipliers for each financial year for the whole of England are set by the Government according to formulae set by legislation.
Between revaluations, the multipliers generally change each year in line with the Retail Price Index in September of the previous year and to take account of the cost of small business rate relief.
Apart from exempt properties, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs. They draw up and maintain a full list of all rateable values.
The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation that came into effect on 1st April 2010, this date was set as 1st April 2008.
The VOA may alter the value if circumstances change. The ratepayer (and certain others who have an interest in the property) can appeal against the value shown in the list if they believe it is wrong.
Non-Domestic Rates Completion Notice
A completion notice is issued when a newly constructed building (or existing building that has been split or merged) is considered complete for non-domestic business rates.
The completion notice is a document that specifies the ‘completion date’ – this is the date on which a commercial premises becomes rateable and enters the rating list for business rates purposes.
There are 3 stages recognised by the construction industry:
- Shell and core – not complete
- Category A – 'Builders finish' – floors, ceilings and services – probably capable of completion in 3 months for small developments
- Category B – Partitioned ready for occupation – complete – meets the VOA Rating Manual’s definition of a hereditament and completion notice is probably not necessary – but 'complete' means 'complete' and not “very nearly complete”
If the premises are unoccupied and empty from this ‘completion date’ then the premises will be eligible for a three month exemption, whilst it remains so. If it is an industrial premises, then up to six months exemption can apply.
If you dispute this date, please give your reasons in writing to the local tax office. You have a further right to appeal within 28 days of the date of this notice, to the Valuation Tribunal, against the completion date specified in this notice.
Please use the link below to form to confirm that you agree the completion notice date for a property.
Non-Domestic Rates Explanatory Notes
The Non-Domestic Rates Explanatory Notes can be viewed below.
If you have an enquiry about council tax, send a message to the Local Tax Team.