Who has to pay Business Rates?
How is the business rate calculated?
What are the transitional arrangements?
Do I qualify for Small Business Rate Relief?
What will happen if I don't pay?
What should I do if I move?
What is the rateable value and how can I find out what mine is?
How can I appeal against my rateable value?
What happens if my rateable value changes?
I have appealed against my rateable value. Must I continue paying whilst my appeal is being investigated?
The description of my property says "Shop and premises". What does "...and Premises" refer to?
Do I have to employ a rating adviser to appeal against my rateable value?
Are all businesses rateable?
What happens if my property is left unoccupied?
Working from Home
Frequently Asked Questions about Business Rates
Who has to pay Business Rates?
Occupied Properties: The person or company that occupies the premises needs to pay the business rates. Sometimes the landlord of the property may charge the occupier a rent that also includes an amount for the business rates. However it remains a private matter between the landlord and the occupier to decide who is going to make payment, however the bill will remain in the name of the occupier, and if it is not paid, action will be taken against the occupier, not the landlord, to recover the amount due.
Unoccupied Properties: The person or company that has the right to occupy the property needs to pay any charge that is due (e.g. the leaseholder, tenant or the freeholder). If a tenant moves out of a property but still holds the lease, the tenant remains liable to pay any unoccupied rate charge that becomes due until the expiry of the lease. If however the tenant’s lease ends, the landlord will be liable for the charge.
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How is the business rate calculated?
We work out your bill by multiplying the rateable value of your property by the rate poundage, which the Government sets each April. The rate poundage figure applies to every property in England.
For example, the rate poundage for 2008/2009 is 46.2. If your rateable value was £10,000 we would multipy this by 46.2 and the amount you would have to pay for the year would be £4,620.00.
The amount quoted in the example could be reduced or increased if transitional arrangements apply to your property.
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What are the transitional arrangements?
Following the introduction of business rates on 1st April 1990, many ratepayers faced large increases in the amount they would have to pay, whilst others anticipated considerably reduced bills.
To cushion the blow for businesses facing large increases, the Government introduced legislation to limit the amount the business rate could go up. This scheme, known as transitional relief, is financed by also placing a limit on the amount that rates can go down.
This phasing scheme recommences with each 5 yearly revaluation of business properties.
The current revaluation came into effect on 1 April 2005 and ends on 31 March 2010. However the transitional arrangements will only apply for the period 1 April 2005 to 31 March 2009. For the final year of the current revaluation 1 April 2009 t0 31 March 2010 rate bills will not be subject to these arrangements.
The scheme applies only to the bill based on a property at the time of revaluation. If there are any changes to the property after the revaluation date, transitional arrangements will not normally apply to the part of a bill that applies to any increase in rateable value due to these changes. Special rules apply when rateable values change or existing properties are merged or split. Further information about transitional arrangements may be obtained from the Council or on the My Business Rates Website.
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Do I qualify for Small Business Rate Relief?
This relief came into effect on 1 April 2005.
Eligible businesses with rateable values of below £5,000 will get 50% rate relief on their liability. This relief decreases on a sliding scale until it is 0% at £10,000.
The relief is available to ratepayers with either:
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one property, or
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one main property and other additional properties, providing the additional properties do not have individual rateable values of more than £2,200, and the combined rateable value of all the properties is under £15,000. The threshold for the combined rateable value is dependent on the location of the main property. The main property is the only one that will have the relief applied to it. The additional properties will have their charges calculated using the standard multiplier.
In addition to this relief on liability, eligible businesses with rateable values of between £10,000 and £14,999, will have their liability calculated using the small business multiplier.
The Small Business Rate Relief scheme is funded by a supplement on the rate bill of those businesses not eligible for the relief. This supplement is built into the standard multiplier.
From 1 April 2007, eligible ratepayers need only apply once during the revaluation period for relief, including those with rateable values between £10,000 and £14,999. A new application will have to be made from 1 April 2010. If your business ceases to be eligible on a day during the financial year, the relief will cease on that day. You must submit your application for the relief to your local authority within six months of the end of the financial year to which it relates. For the 2006/07 financial year, the last date for applications was 30 September 2007. For the 2007/08 financial year onwards the last date for applications will be 30 September 2010.
Assuming a business meets the eligibility criteria, the relief can only be granted if the property the business occupies is In the rating list from 1 April of the year to which the application refers. The date of occupation of the property is irrelevant, the key date is the effective date given to the property in the rating list. If the property has an effective date after 1 April, then the relief can only be applied for from 1 April of the following year.
Full details on how to apply are available from the local authority.
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What will happen if I don’t pay?
If you miss an instalment you will get a reminder notice giving you 7 days to bring your payments up to date.
If you do not bring your payments up to date or fall behind again later, you will have to pay the full outstanding balance on your account.
If you do not pay the outstanding balance, a summons will be sent to you which means that costs will be added to your account.
After sending a summons, we will ask the Magistrates Court to issue a liability order which can be sent to a bailiff if you do not make a payment arrangement with us or you fail to make the payments you have promised. If your case is passed to a bailiff, more costs will be added to your account.
If you are having difficulties in paying your business rates, please contact us as soon as you can so that we can discuss payment options with you.
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What Should I do if I Move?
Broadly, the Council require the following information:
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The address of the property that you have vacated, with the account number,
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The date that you vacated the property,
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The details of the owner of the property,
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Your forwarding address,
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The date you will move goods into the new property (if within Bournemouth area),
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The date of any subsequent property transfer e.g. freehold or leasehold transfer,
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The use for which the property is next intended.
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Any other information that may relate to your liability for Business Rates.
The information will be used to determine the extent of your liability and, possibly, any exemptions or reliefs that you may be entitled to.
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What is the rateable value and how can I find out what mine is?
All business properties have a rateable value, which is determined by the Valuation Officer of HM Revenues and Customs.
The office that deals with the Bournemouth area is at:
Holland House
Oxford Road
Bournemouth
BH8 8EF
Tel (01202) 702000.
It draws up and monitors a full list of all rateable values which are available on the Valuation Office Agency website.
Following the 2005 property revaluation, the rateable value is representative of the annual rent the property could have been let for on the open market as at 1st April 2003. Further revaluation’s will take place every five years to ensure that values are kept up to date and make sure that each bill is fair.
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How can I appeal against my rateable value?
All business properties have a rateable value, which is determined by the Valuation Officer of HM Revenues and Customs and are available on the Valuation Office Agency Website.
The Valuation Officer may change the rateable value of a property if he feels that circumstances have changed since the last valuation. The business ratepayer (and other parties who have an interest in a specific property) may also propose changes to the assessment.
In cases where the Valuation Officer and a business ratepayer are unable to reach agreement about a change in rateable value, the matter can be referred as an appeal to a Valuation Tribunal.
Information about the circumstances, which may require a change of rateable value, and how to apply may be obtained from:
The Valuation Officer
HM Revenues and Customs
Holland House
Oxford Road
Bournemouth
BH8 8EF
Telephone: (01202) 702000
Website www.voa.gov.uk
If you submit a request for a change in rateable value, your existing bill must be paid as detailed on your account. Any necessary adjustments will be made when we are notified of the Valuation Officer’s decision.
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What happens if my rateable value changes?
If the Valuation Officer amends your rateable value, they will notify you of the change in writing. We will recalculate your bill and work out the new amount you have to pay. If your bill is subject to transitional arrangements you may find that a change in the rateable value of your property following an appeal makes no difference to the amount you pay.
If you submit a request to the Valuation Officer for your rateable value to be changed, you must continue to pay the instalments shown on your bill until a new value is agreed. Any amounts, which have been overpaid, will be refunded to you and will be subject to interest providing the Council has not obtained a liability order at the Magistrates Court for non-payment of the business rate.
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The description of my property says "Shop and Premises". What does "Shop…. and Premises" refer to?
The vast majority of business properties have "…. and Premises" after the main description of the property, i.e. "Shop and Premises" or "Office and Premises". The "…. and Premises" refers to perhaps a storage area or a cloakroom facility used in connection with the business property and does not refer to any part of the property used for domestic living accommodation.
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Do I have to employ a rating adviser to appeal against my rateable value?
You do not have to be represented in discussions about your rateable value. Appeals against rateable values can be made free of charge. However, if you do wish to be represented you should be aware that the members of the Royal Institution of Chartered Surveyors and the Institute of Revenues Rating and Valuation are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser, 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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I have appealed against my rateable value. Must I continue paying whilst my appeal is being investigated?
Yes your existing bill must be paid as detailed on your account. Any necessary adjustments will be made when we are notified of the Valuation Officer’s decision.
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Are all businesses rateable?
Generally, business rates are payable on most commercial properties like shops, offices and hotels. Self-catering accommodation such as holiday homes are also liable for business rates where they are available for use by short stay guests for 140 days or more per year.
There is no liability to pay business rates on the following properties:
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Churches
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Public parks
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Farm Land and Buildings
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Moorings
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Sewers
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What happens if my property is left unoccupied?
From 1 April 2008 the law regarding empty property rate has changed. Previously an empty property that did not qualify for an exemption benefited from being charged at a zero rate for the first three months followed by a 50% charge. From 1 April 2008 the full business rate will be payable to all properties that have been empty for three months or more, or six months in the case of industrial and warehouse property.
The new limited exemption period will run from the date the property became empty and not the date the law changes so properties that have already had the benefit of the exemption period do not benefit from a further exemption from the 1 April 2008.
The Government has announced that it has reformed empty property relief in order to provide a strong incentive to bring empty property back into use. The Government hopes this will help to increase the supply of premises to let, and so reduce business rents and improve the competitiveness of the UK, as well as bringing forward brown field sites for re-development and so reduce the need for new development on environmentally valuable greenfield land.
Please be aware that these changes to empty property rates are due to Government legislation and the Council has no discretion in relation to the new charges.
So what will this mean for my rates liability?
As of 1 April 2008, most property that has been empty for more than three months – or, in the case of industrial property, for more than six months – will no longer receive relief from rates. After the initial three or six month rate-free period expires, empty property will be liable for 100% of the basic occupied business rate.
The new limited exemption period will run from the date the property became empty and not the date the law changes so properties that have already had the benefit of the exemption period do not benefit from a further exemption period from the 1 April 2008.
Are there any exemptions to this charge?
After the initial three or six month rate free period expires, empty property will be liable for 100% of the basic occupied business rate unless:
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It is held by a charity and appears likely to be next used for charitable purposes.
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It is held by a community amateur sports club and appears to be next used for the purpose of the club.
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The rateable value of the property is less than £2200.
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The owner is prohibited by law from occupying the property.
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The owner is prohibited by action taken by the Crown, or any other local or public authority from occupying the premises.
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The owner is entitled to possession only in his capacity as the personal representative of a deceased person.
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The property is included in the schedule of monuments compiled under s.1 to the Ancient Monuments and Archaeological Areas Act 1979.
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The building is the subject of a building preservation notice, or which is included in a list of buildings of special architectural or historic interest.
If the following insolvency or debt administration situation exists:
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A bankruptcy order within parts 8 to 11 of the Insolvency Act 1986.
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The owner is a trustee under a deed of arrangement to which the Deeds of Arrangement Act 1914 applies.
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The owner is a company subject to a winding up order made under the Insolvency Act 1986.
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The owner is entitled to possession of the property in his capacity as liquidator under s112 or s145 of the Insolvency Act 1986.
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The owner entitled to possession of the property is a company in administration.
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Working from Home
If you work from home it is possible that the part of your property used for work should be assessed for business rates, while the rest of your property remains assessed for Council Tax.
The Valuation Officer of HM Revenues and Customs is responsible and not the Council to decide if your property should be assessed for business rates for the home working part of your property. The Valuation Officer will consider the following:
the extent and frequency of the business use within your home, i.e. how many rooms are involved and how much space is used for business working in comparison with the amount of living accommodation.
Any alterations made to the property to facilitate the business use from your home.
Whether of not any staff are employed at your property in running the business.
If you want to find out if your property should be assessed for business rates please contact the Valuation Officer of HM Revenues and Customs at:
Holland House
Oxford Road
Bournemouth
BH8 8EF
Tel (01202) 702000
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