Be prepared for business rate changes as rateable value update takes effect

The Valuation Office Agency (VOA) has updated the rateable values of all businesses, and other non-domestic, properties in England and Wales from 1 April 2023.

The Government levies the charge on offices, shops, pubs, and warehouses. In fact, most non-domestic properties will attract business rates. They may also be charged where only part of a building is used for non-domestic purposes.

A Government business rates support package has been put in place worth around £13.6 billion over the next five years.

It includes measures to freeze the business rates multipliers at 49.9p and 51.2p in 2023-24, which, it is claimed, will see bills six per cent lower than they would have been without the freeze.

Changes to business rates in 2023:

  • The multiplier represents the number of pence in each pound of the rateable value that will be payable in business rates before any relief or discounts are applied.
  • A transitional relief scheme will cap bill increases caused by changes in rateable values at the 2023 revaluation.
  • For retail, hospitality, and leisure business rates relief will be increased from 50 per cent to 75 per cent (up to £110,000 per business) in 2023-24.
  • The increases are capped at £600 per year from April 2023 if businesses lose their eligibility for small business rates relief as a result of the revaluation.

The updated values reflect the property market as of 1 April 2021 and, while some sectors benefit, others have been hit hard by the Business Rates Revaluation 2023.

How are business rates calculated?

They will be based on the property’s ‘rateable value’, the estimated value on the open market.

The rateable value for your property is not what you pay in business rates or rent. Your council uses the rateable value to calculate your business rates bill.

What is the Small Business Rates Relief?

This applies if the property has a rateable value of less than £15,000, and generally if the business only uses one property:

  • Full relief is available on properties with a rateable value of £12,000 or less
  • For those between £12,001 and £15,000, relief goes down gradually from 100 per cent to zero per cent

If you’re a small business but you don’t qualify for small business rate relief, your bill will still be worked out using the lower small business multiplier (for properties with a rateable value below £15,000).

Need help with understanding business rates? Contact us today.