How your Business Rates are worked out
 
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How your Business Rates are worked out

Your annual Business Rates Bill is calculated and collected by the Council

The Council multiplies the rateable value of your property, which is set by the Valuation Office Agency, by a multiplier (the national non-domestic multiplier) which is set by central government. It is set for the whole of England and is effective from 1 April each year. The multiplier represents the number of pence in each pound of the rateable value that will be payable in Business Rates before any relief or discounts are applied. The calculation gives the amount of rates payable for the year.

The Government reviews the multiplier each year to reflect changes in inflation. By law, the multiplier cannot increase or decrease by more 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 before, plus inflation for that year. There is a revaluation every five years - the last one was in April 2010. The next one will be in April 2017.

Five yearly revaluations make sure each ratepayer pays their fair contribution and no more, by ensuring that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others.

The rateable value of a property broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the 2010 revaluation this date was set as 1 April 2008.

Since the introduction of Small Business Rate Relief in April 2005 there have been two multipliers for each year, the standard national Non-Domestic Multiplier and the Small Business Multiplier.

The multipliers from 2005 onwards are;

YearNon-Domestic MultiplierSmall Business Multiplier
2005/0642.2 pence41.5 pence
2006/0743.3 pence42.6 pence
2007/0844.4 pence44.1 pence
2008/0946.2 pence45.8 pence
2009/1048.5 pence48.1 pence
2010/1141.4 pence40.7 pence
2011/1243.3 pence42.6 pence
2012/1345.8 pence45.0 pence
2013/1447.1 pence46.2 pence
2014/1548.2 pence47.1 pence
2015/1649.3 pence48.0 pence

Transitional Relief

Transitional relief helps to reduce the impact of sudden and significant rises in rates bills following revaluations.

The changes to rateable values of the majority of properties following a revaluation will mean that ratepayers have to pay slightly more or slightly less for their business rates.
 
If, as a result of the most recent revaluation there is a large rise or drop in the rateable value of your property, the increase or decrease in your bill will be phased in over a number of years by adding or deducting a fixed percentage. The figure is then adjusted by the inflation rate for each financial year.

The current valuation came into effect from 1 April 2010 and was accompanied by a transition scheme which will operate over a five year period.

If the rateable value of your property has increased following the revaluation, the maximum amount your bill can increase by each year is:

YearSmallLarge
2010/115%12.5%
2011/127.5%17.5%
2012/1310%20%
2013/1415%25%
2014/1515%25%

If the rateable value of your property has decreased, following the revaluation the maximum amount your bill can decrease by each year is:

YearSmallLarge
2010/1120%4.6%
2011/1230%6.7%
2012/1335%7%
2013/1455%13%
2014/1555%13%

Transitional relief only applies to the rateable value that was effective from 01 April 2010. If your rateable value is increased with an effective date of after 01 April 2010, the increase in rates will not be subject to transitional phasing and will be payable at the full amount (Rateable Value multiplied by the rate in the pound).

For further information please contact the Business Rates team.