Quick Answer: Business rates are a tax on most non-domestic premises in England and Wales. Your local council sends the bill, the Valuation Office Agency works out the value, and a range of reliefs can shrink what you owe if you know where to look.
Running a shop, office, or pub in Britain means a yearly property tax lands on your desk. The rules feel dense, but they reward attention. Miss a refill and you overpay. Learn the system and you keep more cash in the business.
- Business rates fund local services, much like Council Tax does for homes.
- Your bill equals the rateable value multiplied by the correct multiplier, minus any relief.
- The latest revaluation took effect on 1 April 2026, based on 2024 rents.
- Small business, rural, charity, and pub reliefs can cut bills sharply.
- You can challenge a rateable value if you think it is too high.
What are Business Rates and Who Pays?
Business rates, also called non-domestic rates, apply to premises used for non-domestic purposes. Government guidance on GOV UK lists shops, offices, pubs, warehouses, factories, and holiday lets as typical examples. If you use a building, or part of one, for business, you will most likely pay.
Whether you rent or own, the occupier usually foots the bill. The money helps pay for local services such as policing, waste collection, and roads. Cumberland Council frames rates as the way occupiers of non-domestic property contribute to local costs, in the same spirit as council tax on homes.
Rules differ in Scotland and Northern Ireland, so check your nation’s scheme.
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Working From Home
Run your business from the kitchen table and you usually pay nothing extra. SumUp explains that a small home office, or selling goods by post, rarely triggers a charge.
But if part of your home is used only for business or customers and staff visit, rates may apply on top of the council tax. Contact the Valuation Office Agency (VOA) to check.
How Your Rates are Calculated
Every property has a rateable value. This is its open market rental value on 1 April 2024, as estimated by the VOA. Your council then multiplies that figure by a “multiplier” to reach the bill.
From 1 April 2026, England moved from two multipliers to five, reflecting both property use and value.
| Multiplier (2026/27) | Applies to | Rate |
|---|---|---|
| Small business RHL | Retail, hospitality, leisure under £51,000 | 38.2p |
| Small business | Other properties under £51,000 | 43.2p |
| Standard RHL | Retail, hospitality, leisure £51,000–£499,999 | 43.0p |
| Standard | Other properties: £51,000–£499,999 | 48.0p |
| High value | All properties £500,000 and above | 50.8p |
A small business/shop with a rateable value of £10,000 would use 43.2p, giving £4,320 before relief. Unbiased points out that a change in rateable value does not always mean a change in your bill, because multipliers shift too.
Could Your Business Rates Be Too High? Here’s How to Check
Errors happen, and they can cost you for years. Sign in to your business rates valuation account to see how your figure was worked out. Compare it with similar local premises on the VOA’s online list.
If the floor area, parking, or use looks wrong, submit a “check” case with evidence. Disagree with the value itself? Lodge a “challenge”. If the VOA still won’t budge, you can appeal to an independent valuation tribunal. Report any extension, subletting, or merger too, or you risk a backdated rise.
Reliefs That Cut Your Bill
Reliefs are where the real savings sit. Many apply automatically, but some you must claim.
- Small business rate relief: In England, premises with a rateable value of £12,000 or less pay no rates. Between £12,001 and £15,000, relief tapers from 100% to 0%.
- Rural rate relief: In a settlement of under 3,000 people, the only shop, post office, or food store under £8,500 pays no rates. The same applies to the sole pub or petrol station under £12,500.
- Charitable relief: Charities and community amateur sports clubs get 80% off, with up to 20% more at the council’s discretion.
- Transitional relief: This phases in big increases after a revaluation, and the council applies it for you.
- Pub and live music venue relief: From 2026/27, eligible pubs and live music venues receive 15% off.
Empty premises usually get three months rate-free, extended to six for industrial units.
Pubs, Holiday Lets and Other Special Cases
Pubs are valued on “fair maintainable turnover”—the annual trade, excluding VAT, that a pub should achieve if run efficiently. The VOA applies percentages agreed upon with industry bodies, including the British Beer and Pub Association.
Self-catering holiday homes in England are rated for business rates if, over the past 12 months, they were available to let for at least 140 nights and were actually let for at least 70 nights. In Wales the thresholds are tougher: available for 252 nights and let for 182.
Getting Professional Help
You can handle rates yourself. If you would rather not, a rating surveyor can help. Agents must follow the VOA’s standards. The Royal Institution of Chartered Surveyors (RICS) and the Institute of Revenues, Rating and Valuation (IRRV) both regulate qualified members.
Rating history detailed on Wikipedia shows this is a centuries-old tax, so expert eyes often pay for themselves.
Frequently Asked Questions
Are business rates paid monthly?
Ans: Usually yes. Bills are split into 10 instalments, but you can ask your council for 12.
When does the bill arrive?
Ans: Your council sends it in February or March, covering the next tax year from April.
Can I avoid business rates by working from home?
Ans: Often yes, if you use only a small part of your home and no customers visit.
What is a rateable value?
Ans: It is the estimated yearly rent for your property on 1 April 2024, set by the VOA.
Do empty properties pay rates?
Ans: Not for the first three months, or six months for industrial premises.
Who sets the multiplier?
Ans: The central government sets it each year, except in the City of London.
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