The amount a company pays in business rates is based on the Rateable Value (RV) assigned to a property. A RV is determined by a properties open market rental value and is reassessed every 5 years in order to keep in line with changes within the rental market. The RV will stay the same for the duration of the rating list which lasts 5 years, unless it is appealed and can then either decrease, increase or stay the same.
While the RV will change every 5 years business rates are billed annually with a bill calculated using the RV which is then put with the multiplier. This determines the amount of 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.
As the multiplier tends to increase each year business rates will generally increase year on year for the life of the list.
If your RV is reduced either via an appeal or due to a new rating list coming into effect, while your rates will decrease due to the lower RV they will then increase from this new level, or remain the same, depending on the multiplier each year.