Business rates, your limited company, and small business rate relief

While council tax is charged on residential properties, most non-residential properties have a non-domestic equivalent levied on them.

This tax is known as “business rates”, and while the central government in Westminster has some influence over the rates, your local authority administers the system.

If you use part of a building or a whole building for a purpose other than to live in it, it’s quite likely that you’ll have to pay business rates.

Read the official non-exhaustive list of the types of properties liable to pay business rates, which includes offices, shops, warehouses, pubs, and more.

The tax is also levied on holiday homes, so if you rent a property out, you’ll still have to pay, even though your guests are using it domestically. Farm buildings are not included, nor are buildings used to help people with disabilities.

The key time for business rates is around February or March, when the bill gets sent to you following a lengthy calculation process on the part of the local authority. The bill will cover the following tax year, so be prepared to pay ahead.

How are business rates calculated?

In England and Wales, the government follows a specific process for calculating business rates.

Each property—no matter its function or location—has a “rateable value.” This is calculated by taking its rental value on the open market on 1 April 2015: an estimate for this is calculated by a government body known as the Valuation Office Agency (VOA).

To get a rough estimate of your business rates for the year, take the rateable value and then find the correct “multiplier”.

2024/25 tax year: the standard multiplier is 54.6p. The small business multiplier is 49.9p.

The multiplier is an amount set by the central government in Westminster rather than the local authority. It gives you the closest possible estimate to your business rates bill.

There are a couple of possible hitches that may arise during the business rates calculation process.

Firstly, the Valuation Office Agency might ask you to provide some extra information about the property your business operates from if they need more knowledge before determining its rateable value.

It can sometimes take a while to gather all of this information, so if you’re concerned that you’ll run out of time, contact the Valuation Office Agency to request more time.

It’s also possible that once your rates have been calculated, you’ll conclude that there’s been an error in the calculation process.

If you think this may have happened to you, contact your local authority to find out how to ask for your property’s rateable value to be re-assessed.

Find out your business rates valuation

Find out what the rateable value of your business premises is here. 

This is a sample output of some office space we used to occupy in London. You can find the rateable value of any address in the UK using the search tool.

As the rateable value is low, it qualifies for rate relief explicitly aimed at smaller businesses, as detailed below.

What is the small business rate relief scheme?

Certain types of businesses are eligible for tax relief on their business rates, and it’s a good idea to find this out so that you can take full advantage of any discounts you can secure.

If you’re a small business, you may be able to claim what is known as “small business rate relief.”

The details below are correct as of October 2024

The rules differ slightly in each of the United Kingdom’s constituent countries, so it’s good to check with an accountant or adviser if you’re based outside of England.

In England, small businesses can claim this if their property’s rateable value (see above for a definition) is under the £15,000 threshold.

If your property’s overall rateable value is under £12,000, you’ll be completely exempt from paying business rates. If it’s between £12,001 and £15,000, as the exact figure goes up, the relief will decrease proportionately from 100% to 0%.

Your business may also need to use only one property to qualify for relief, but if you are using more than one, you may still be eligible.

In this case, you’ll be able to get relief on your main property provided that the total rateable value of every property associated with your business is below £20,000 (or £28,000 if your properties are in London), and also that none of your business’ other properties have a rateable value above £2,899. You’ll also continue to receive relief on your main property for a year.