Business rates is one of the largest outgoings for any company. The amount paid in rates is based on a properties open market rental value and is reassessed every 5 years in order to keep in line with changes within the rental market.
This reassessment of rental values takes place two years before the new rateable values come into effect, with the current values being based on rental data from 2015.
This value, known as the Rateable Value (RV) is then put with the multiplier which determines the percentage of the RV that will be billed on. The multiplier changes each year in line with Consumer Price Index (CPI) and is set by the Government. The multiplier for Wales is set by the Welsh Assembly and for England it is set by Government in Westminster. The City of London also has its own multiplier.
There are two multipliers set in England, one for small business classed as those with an RV below £51,000 and one for those properties with an RV over £51,000.
In England, the current multipliers are : Small business : 49.1 / Higher multiplier : 50.4
In Wales the current multipliers is 52.6
To determine your rates bill you take your RV and multiply it by the figure above depending on your RV and location ( e.g RV x 0.491/0.54 or 0.526) . This will give you the amount of rates payable over the rating year which runs 1st April- 31st March.
Many ratepayers feel that basing their current rates on data from two years ago is not a true reflection of their properties current value, in addition the multiplier being in-line with inflation means rates are more likely to increase year on year creating larger proportions of rates being due.
There was a business rates consultation in 2016, asking ratepayers and agents to put forward alternative suggestions for the rating system but a consensus on an alternative was not found.
There are ways of reducing the business rates that are payable , ratepayers can be eligible for certain reliefs and you can also appeal against your RV if you think it is incorrect and carry out an audit to look for errors in the billing of business rates.