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Why Do We Pay Business Rates?

20th February 2018

Why Do We Pay Business Rates?

This article will discuss the entire nature of business rates and just why do we pay business rates and any business rates advice that you need.

Firstly we will go on to talk about an overview of business rates. They tend to be charged on non-domestic properties such as shops, pubs, offices, warehouses, factories and holiday rental homes. This may also apply to you if you are using a part of a building for non domestic purposes as well. Although business rates are managed in a different manner in Scotland and Northern Ireland so be sure to read up on these in your own time.

Each year your local council will send you your business rates bill, usually in February or March. When you are given this is always for the following tax year. There are relief schemes in place that you try and get from the local council in order to reduce your bill. Sometimes this is automatic but you may need to apply for it yourself. If you're not sure on whether you're eligible for these tax breaks then be sure to contact your local council to find out. This process will vary depending on whether you're based in England or Wales.

Certain properties will be exempt from business rates, this could include farm buildings or buildings which are used for the welfare of disabled citizens. Plus if you own a stable then you will usually need to pay your business rates for the stables unless you are using your horses for farming purposes then you could be exempt from paying.

business rates calculator

How Are Your Business Rates Calculated?

So next we will move on to how are the rates calculated for the next tax year? Well, here at Rory Mack Associates we are here to give you a more in depth idea. Firstly your business rates are decided on your properties value which will be set by the valuation office agency and then by a 'multiplier' which is set by the government. The multiplier relates to the number of pence in each pound of the rateable value that will need to be paid in business rates before any relief or discounts are applied. This calculation gives you the number of rates payable for the year.

The government reviews the multiplier each year in order to reflect the changes that have been caused by inflation of the previous year. Although by law, this multiplier is not allowed to change more or less than the rate of inflation, except in the year of a revaluation. In that year it is set at a level which will keep the total amount raised in rates after the revaluation, the same as they were before, then plus inflation for that year.

If you look at your rateable value and think "My rateable value is wrong" then be sure to ask for it to be corrected by your local council and the valuation office agency so you can make sure that you're not spending too much on your bills.

Business Rates Revaluation

At the point of revaluation, you will find that the valuation office agency will adjust the rateable value of company properties to reflect changes in the property market. A revaluation will usually happen once every 5 years. The most recent time this happened was on 1 April 2017, based on rateable values from 1 April 2015. Business rates are handled differently in both Scotland and Northern Ireland so if you're viewing this article from one of these nations then be sure to check your regulations on the business rates. What happens at revaluation is all properties are then given a new rateable value and the multipliers from the government are revised. This helps to give you a more accurate payable bill but however, this doesn't always mean that your bill will change.

Business Rates Advice

You could be able to get a discount from your home local council on your business rates, but you will have to be eligible for one or more of the business rates relief schemes. If you're looking for help with the property's rateable value then make sure that you contact the valuation office agency. Get your professional company rates advice from Rory Mack associates today. We will help you every step of the way to make sure that you receive the specialist knowledge and insight required to make sure you're paying the correct amounts for your business rates. We are based in Stoke on Trent, Staffordshire, close to Cheshire and Shropshire and provide expert advice on business rates for you as we like to make sure that our customers are both 100% satisfied with our service and completely understand the business rates procedure then we have a team with years of expertise in the field on hand at all times to support you every step of the way.

business rates rory mack

If Your Business/Premises Change

Your business rates could change for your company if one of the following occurs in your environment:

The move or make changes to your premises. This will have an impact of the rates payable you will have to pay for as the value of your property will now have to be recalculated as you may have moved into a more valuable or less valuable property so you will need to ensure that you're spending the right amount of money when it comes to sorting out your finances.

If the nature of your business has changed then it is paramount to declare this to the local council as you will need to change all the details that you pay for to the council. So if you decide to downsize your company then you will need to declare this otherwise you may be paying too much which is what no company owner wants no matter who you are. So if you would like some help on talking through the payables that your paying in your company then be sure to give us a call here at Rory Mack Associates. We have a team here who have years and years worth of experience of working in this field and can give you an expert advice on making sure your affairs are in order.

If you sublet a part of your company premises to someone else then you will need to use the valuation office agency who will be able to make sure that your changes to how much you will need to pay on your property. If you don't make someone aware of your changes then you risk being faced with a backdated increase in your bill which may cause financial issues later on down the line.

If you merge two properties into 1 then again as mentioned this is something that will affect how much you need to pay as you will have moved the business into 1 bigger building rather than having 2 smaller properties listed under the company name.