Business rates explained
All businesses benefit from the services that local authorities provide. Some services directly benefit business, for instance roads, the police and fire brigade. Others, such as education and housing, are indirectly beneficial. Non-domestic rates or business rates are the way non-domestic property users contribute towards the cost of providing those services. Please note that business rates do not include other services for which a separate charge is made, such as commercial waste collection.
How we work out your bill
Business rates are calculated by multiplying the rateable value of the property by the national poundage (known as the multiplier), which is set by the government each year.
Rates are usually payable by the occupier of the non-domestic property. This will normally be either the owner/occupier or the leaseholder of the property.
Which properties have to pay business rates?
Most places used for business, like shops, offices, warehouses and factories have to pay business rates.
Holiday homes that you rent out for short stays also pay business rates if they are available for 140 days or more in a year. If you run a bed and breakfast in your own home to six people or less, you are exempt from business rates as long as your home is mainly for living in.
Timeshare homes also have to pay business rates.
Self-catering and holiday let accommodation - rules from 1 April 2023
If your property is in England, it will be rated as a self-catering property and valued for business rates if it is both:
- available to let for short periods for at least 140 days in total over the current and previous tax years
- actually let for at least 70 days in the last 12 months
The HMRC Valuation Office (VO) is responsible for maintaining the council tax and non-domestic rating (business rates) lists.
We use these lists to help decide if a property should pay council tax or business rates. The government sets the rules whether a self-catering property is eligible for business rates. The VO makes its decisions based on this policy. There are other policies that may affect how much you pay – for example, if the property is a second home, you will pay 100% premium on top of the standard amount.
There are several ways the VO maintains self-catering properties on the council tax and business rates lists:
- using information from customers, like when someone tells them their property meets the letting criteria for business rates
- three-yearly requests for information, to inform a revaluation of all business rates properties
You can find more details about the rules and if your property has met the criteria on GOV.UK
The VO has updated its guidance, making it easier to understand the criteria for a property to be valued for business rates (GOV.UK). It now includes:
- more information on the eligibility criteria
- what happens when a property is not available for letting (for example, when works are carried out)
- further information on areas where the VO has had customer questions
The VO has created a new form, to be used when a property is currently valued as domestic but now meets the criteria to be valued for business rates
Visit GOV.UK to find out more about business rates for a self-catering property
Further information about business rates is available on GOV.UK
Some businesses are not rateable, including:
Farm land and buildings, churches, sewers, public parks, certain property used for people with disabilities, property in an enterprise zone and moveable moorings.
More detailed information can be found on explanatory notes from the government
Change of address
The business rate is calculated on a daily basis. If you take over a shop, offiice or any other business property, you will be liable for business rates.
If you stop trading, leave the property or move to another property within our borough, the amount you pay will change. Please tell us you have moved using My Account so we can update your bill and make sure you pay the right amount. If you have overpaid your business rates you may be entitled to a refund.
We will ask for proof that you have left the property.