business rates
Commercial, Guide, Investment

Calculate your Business Rates

Calculate your Business Rates

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Before launching your new business, you have to budget your finance and also consider the business rates you are going to pay on your commercial property. These taxes are collected by the Council to finance many useful services, including police and fire brigade.

The main occupier of the property is responsible for paying the business rates. Usually the occupier or the leaseholder of the non-domestic Premises.

If you are running your business from home, adopting a spare room in your house as a beauty salon, for example, you are likely to pay business rates as well. The taxes will be, in this case, calculated not on the whole house, but only on the areas dedicated to the business.

How do you calculate your business rates?

When it is the time to pay the business rates. Then the bill will be sent to the Business Premises.  And it will be addressed to the person responsible for the payment.

Knowing the amount you are supposed to pay in advance is extremely useful and there are several tools available to understand the amount you will likely to pay.

Business rates are worked out based on your property’s ‘rateable value’. The Valuation Office Agency (VOA) is in charge of estimating the rental value. So based on the information gathered from the open rental market.

It is possible to estimate your business rates by multiplying the rateable value by the correct ‘multiplier’ (an amount set by the central government). A multiplier is the number of pence per pound of rateable value. So that you’ll have to pay in business rates before any relief or discounts are deducted.

Multipliers reviews every year in line with inflation.

 

To easily calculate your business rates, the government made available also an easy tool to calculate the amount you are due.

  1. Search by postcode to find the rateable value of your business.
  2. Find the correct multiplier for your size of business and location. Contact your local council to see if you qualify for the small business multiplier.
  3. Multiply your rateable value by the correct multiplier. This shows you how much you will have to pay in business rates (before any relief is deducted).
  4. Take away any business rate relief that you’re entitled to.

 Any Rate Relief entitles me?

Certain buildings are exempt from business rates, such as farm buildings and land, fish farms, buildings used for training or welfare of disabled people and places of public religious worship. If your business is empty for the first three months you become exempt from business rates, warehouse and industrial properties are exempt for six months.

 For small businesses are some relief.

When your business rate is below £15,000 your business may qualify for small business relief rate (SBRR). If you occupy only one business property. And the second property value is less than £2,200 you can still claim SBRR.

If this applies to your business you can apply to your local authority. So if your business rateable value is less than £5,000 you can qualify for up to 50% relief. Talk to your local council for more information.

Visit these pages for more useful resources:

http://www.voa.gov.uk/

www.gov.uk/calculate-your-business-rates

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