Project Description

Business rates in London

I-  What is a business rate?

In simple words, business rate is exactly like council tax but for commercial properties.

When an owner-occupier or leaseholder has a non-domestic property he has to pay a tax that is called: business rate. This goes towards paying the services that the local authority provides.

These taxes are mainly applied to shops, factories, offices, and pub. However if your property is a church, a public park, a farmland and building, moorings or sewers you don’t need to pay this tax.

II-  How business rate is calculated?

  1. You have to calculate the rateable value of your property that is fixed by the Valuation Office Agency.

You have to be careful: if your rateable value is more than £55,000, you must pay a business rate supplement of £0.02

  1. When your rateable value is done you just have to multiply by a “multiplier”

The multiplier depends on where your offices are located. Multipliers vary from place to place – if you live in Scotland, in Northern Ireland or in England your multiplier won’t be the same. The multiplier may also vary depending upon the size of your business.

III-  How to reduce business rate liability?

If your business tax is too expensive, there are businesses rate reliefs. To benefit from this advantage you need to be registered as one of the following:

  • Small business
  • Charities and nonprofits organisation
  • Retail
  • Partially occupied properties
  • New build empty property
  • Re-occupation relief

In this blog we will focus on small businesses and on retail relief, but if you want more information you can visit the website that will provide you all the detail that you need.

As far as small business relief is concerned, you must satisfy two requirements:

  • You use just one property
  • The rateable value of the property is less than £12,000

If these requirements are satisfied you will benefit from some tax relief..

Retail relief is different.  A relief of £1000 can apply if your property is used as a shop, a restaurant or a drinking establishment and if this property has a rateable value of £50,000 or less.

IV-  How to pay?

The business rate needs to be paid by February of each year. You are allowed to pay by direct debit, standing order or by cheque.

If you forget to pay you will receive a reminder that will give you 7 days to pay. If you fail to pay after that you will receive a summons to appear in the Magistrates Court for non-payment.