Business Rates

Definition

Business Rates are a form of local tax paid by business owners in the United Kingdom. They are calculated based on the value of the property that the business occupies, as determined by a local valuation. The Uniform Business Rate (UBR), set annually by the central government, is applied to the property’s rateable value to determine the amount of tax payable by the business.

Examples

1. Retail Store

   • A retail store in London has a rateable value of £50,000. If the Uniform Business Rate (UBR) set by the government is 0.493, the business rates payable would be £50,000 x 0.493 = £24,650 annually.

2. Office Building

   • An office building in Manchester with a rateable value of £100,000 would have its business rates calculated similarly. With a UBR of 0.493, the business rates payable would be £100,000 x 0.493 = £49,300 annually.

3. Small Workshop

   • A small workshop in Birmingham has a lower rateable value of £20,000. Using the same UBR, the business rates would be £20,000 x 0.493 = £9,860 annually.

Frequently Asked Questions (FAQs)

What are business rates?

Business rates are a local tax on businesses based on the value of the property they occupy. The tax helps fund local services.

How are business rates calculated?

They are calculated using the rateable value of the property, which is assessed by the local authority, and multiplied by the Uniform Business Rate (UBR) set by the central government.

What is the Uniform Business Rate (UBR)?

The Uniform Business Rate is a multiplier set by the central government used in the calculation of business rates.

Can business rates be appealed?

Yes, businesses can appeal their rateable value if they believe it is incorrect, through their local authority or the Valuation Office Agency (VOA).

Are all businesses required to pay business rates?

Most businesses occupying non-domestic properties will have to pay business rates, though there are some exemptions and reliefs available.

Related Terms

Council Tax

A local tax levied on residential properties, used to fund local services such as education, waste collection, and libraries.

Rateable Value

The value assigned to a property by the local valuation office, used as a basis for calculating business rates.

Valuation Office Agency (VOA)

An executive agency of HM Revenue & Customs in the UK responsible for valuing properties for business rates and council tax purposes.

Non-Domestic Property

A term used to describe properties used for business or commercial purposes, as opposed to residential properties.

Small Business Rates Relief

A relief scheme for small businesses in the UK which reduces the amount of business rates payable under certain conditions.

Online References

1. Gov.uk - Introduction to Business Rates
2. Valuation Office Agency (VOA)
3. Citizens Advice - Business Rates

Suggested Books for Further Studies

1. “Business Rates: Your Guide to Rates and Relief—The Essential Handbook” by Philip Ryde
2. “Local Taxation: Law and Practice” by Alan Jeffery
3. “A Practical Guide to Business Rates” by Gerald Eve
4. “The Complete Guide to Business Rates” by Clive Moore

Accounting Basics: “Business Rates” Fundamentals Quiz

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