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How business rates are calculated

How business rates are calculated

What are business rates?

National Non-Domestic Rates (NNDR), or Business Rates, are collected by local councils.

  • They are the means by which businesses and others who occupy non-domestic property contribute towards local services. 
  • The council is responsible for the collection of the rates but must pay some of the forecasted revenue amount to central Government.

This money, together with revenue from council taxpayers, revenue support grant provided by the Government and certain other sums, is used to pay for the services provided by your local council and other local authorities in your area.

If you have a query about business rates please use our online form:

Enquire about business rates

More information on Business Rates

For an overview read our NNDR (Business Rates) Completion Notice Rules [PDF, 30Kb] document.

More information on each specific item is shown below.

Apart from properties that are exempt from Business Rates, each non-domestic property has a rateable value which is normally set by the Valuation Officers of the Valuation Office Agency (VOA), an agency of the Inland Revenue.

The Valuation Office Agency draws up and maintains a full list of all rateable values, available on their website.

  • The rateable value of your property will be shown on the front of your bill.
  • The rateable value broadly represents the yearly rent the property could have been let for, on the open market, on a particular date.
  • This yearly rent has been re-evaluated from 1 April 2017, and the particular date chosen for the market value evaluation was set as at 1 April 2015.
  • The Valuation Officer may alter the value if circumstances change. 
  • The ratepayer (and certain others who have an interest in the property) can appeal against the value shown in the list if they believe it is wrong.

Further information about the grounds on which appeals may be made and the process for doing so can be found on the VOA website, or from the Valuation Office. Their address is: Non-domestic Rates North East, Valuation Office Agency, Earle House, Colonial Street, Hull, HU2 8JN. Telephone 03000 501501.

Please note: If you submit an appeal against your rateable value, you cannot withhold payment, or any part of the payment, until your appeal has been settled.

The local council works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers:

  • the standard non-domestic rating multiplier  
  • the small business non-domestic rating multiplier

The standard multiplier is higher, to pay for small business rate relief.

The Government sets the multipliers for each financial year, according to formulae set by legislation. Between revaluations, the multipliers change each year in line with inflation, and take account of the cost of small business rate relief.

In the year of revaluation the multipliers are rebated to account for overall changes to total rateable value and to ensure that the revaluation does not raise extra money for Government. The current multipliers are shown on the front of your bill.

All rateable values are reassessed every five years at a general revaluation. The current rating list is based on the 2017 revaluation. 

  • Revaluations are every five years to make sure each ratepayer pays their fair contribution and no more. The revaluation due in 2015 has been delayed until 2017. 
  • They ensure that the share of the national rates bill paid by any one ratepayer reflects changes over time in the value of their property relative to others.    

The 2017 revaluation will not increase the amount of rates collected nationally. 

The Government believes it is important to provide the greatest support to small and medium businesses seeing increases and to also allow those small and medium businesses seeing reductions to gain quickly from the revaluation.

The scheme must be revenue neutral and, in order to continue to support small and medium businesses, the Government has decided to provide less relief for large businesses than in 2010.

Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier). If there were changes to the property after 1 April 2017, transitional arrangements did not normally apply to the part of a bill that related to any increase in rateable value due to those changes. Changes to the bill as a result of other reasons (such as because of changes to the amount of small business rate relief) are not covered by the transitional arrangements.

The transitional arrangements were applied automatically and shown on the front of the bill. Further information about transitional arrangements and other reliefs may be obtained from North Lincolnshire Council or the Government's business link website.

More information on revaluation 2010 can be found at the Valuation Office Agency's website

Full details on exemptions can be obtained from North Lincolnshire Council. If the unoccupied property rate for the financial year has been reduced by order, it will be shown on the front of your bill.

Business Rates are not be payable in the first three months that a property is empty. This is extended to six months in the case of certain industrial properties. After this period rates are payable in full, unless the unoccupied property rate has been reduced by the Government, by order.

In most cases the unoccupied property rate is zero for properties owned by charities and community amateur sports clubs.

In addition there are a number of exemptions from the unoccupied property rate. 

Ratepayers do not have to be represented in discussions about the rateable value of their rates bill. Appeals against rateable values can be made free of charge.

However, ratepayers who do wish to be represented should be aware that members of the Royal Institute of Chartered Surveyors (RICS) and the Institute of Revenues and Rating (IRRV) are qualified and are regulated by rules of professional conduct, designed to protect the public from misconduct.

Before you employ a rating advisor, you should check that they have the necessary knowledge and expertise, as well as appropriate indemnity insurance.

Take great care and, if necessary, seek further advice before entering into any contract.

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Fax: 01724 296104

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Friday: 8.30am to 4.30pm

Last updated: 03/04/2017
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