Originally written by Sophie Attwood on Small Business
What are business rates?
Business rates are one of the UK’s oldest taxes; its origins can be traced back to the Poor Law of 1601. Business rates can be roughly defined as the tax paid for the occupation of a non-domestic property. They approximately correspond to 50 per cent of the annual rent of the property. Business rates are based on a specific value, known as “rateable value” and all commercial properties are valued on the same day.
Non-domestic rates or business rates are the way that those who occupy commercial (non-domestic) property contribute towards the cost of local authority services. They are administered and collected by local authorities. Under the business rates retention arrangements introduced in April 2013, authorities keep a proportion of the business rates paid locally. However, business rates are a controversial tax as they represent one of the biggest overheads for business.
Who sets non-domestic rates?
Business rates are set by central government more specifically the Valuation Office, an agency of Her Majesty’s Revenue and Customs (HMRC). The VOA calculates your business rates based on “rateable value” (RV). It compiles and maintains a full list of all rateable values. The rateable value of