ACCA - The global body for professional accountants

If your business uses a building, or part of one, it will probably be liable for business rates.

Local authorities charge these rates on most commercial properties such as shops, offices, pubs, warehouses and factories, and use the money raised to pay for services such as the police and fire brigade.

Business rates depend on:

  • The rateable value of the property (which is set by the Valuation Office Agency)
  • What multiplier is set by central government
  • The eligible rate relief schemes your business is eligible for.

Businesses need to apply for some rate reliefs, but others are given automatically. Local authorities have the general power to fund their own business rate discounts and there are a number of general rate relief schemes. These include:

  • Small business rate relief - relief for businesses that are liable for business rates on one property that has a rateable value of less than £18,000 a year (or £25,500 in Greater London).
  • Transitional rate relief - relief to reduce the impact of a large change (either up or down) in the rateable value of the property, which will be automatically included by the local authority when it calculates the bill.
  • Rate relief on empty properties - empty properties are exempt from paying business rates for three months after they become vacant.
  • Rural rate relief - up to 50% relief if the property is the sole village shop, post office, petrol station or public house.
  • Charitable relief - relief of up to 80% for charities and community amateur sports clubs.

Some types of property such as agricultural land and buildings and church land are exempt from business rates altogether.

In addition, if your business has incurred a significant and unexpected backdated business rate liability, you may be entitled to have it waived.

 

How your accountant can help

Speak to your accountant about your business rate liability on your commercial premises. They will be able to advise you if you are entitled to any reliefs that you are currently not claiming.

Find an ACCA accountant

Last updated: 13 Jan 2014