Non-Domestic Rates, or business rates, collected by local authorities are the way that those who occupy non-domestic property contribute towards the cost of local services.
Under the business rates retention arrangements introduced from 1 April 2013, authorities keep a proportion of the business rates paid locally.
The money, together with revenue from council taxpayers, locally generated income and grants from central government, is used to pay for the services provided by local authorities in your area.
For more information on the business rates system may be obtained at Introduction to business rates or Business rates.
Payment of business rates bills is automatically set on a 10-monthly cycle.
However, the Government has put in place regulations that allow ratepayers to require their local authority to enable payments to be made through 12 monthly instalments. If you wish to take up this offer, you should contact Rugby Borough Council as soon as possible.
The local authority works out the business rates bill for a property by multiplying the rateable value of the property by the appropriate non-domestic multiplier. There are two multipliers: the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The Government sets the multipliers for each financial year, except in the City of London where special arrangements apply.
From 2024-25, the Government now has the discretion to treat the multipliers differently – that is, to index one by CPI, whilst freezing, or under-indexing the other; or to under-index them both, but by different amounts.
From 1 April 2024, the small business multiplier’s eligibility will be extended to properties below the threshold for the national multiplier at £51,000 which are vacant, on the central list or occupied by charities. The current multipliers are shown on the front of the bill.
Apart from properties that are exempt from business rates, each non-domestic property has a rateable value which is set by the Valuation Office Agency (VOA), an agency of Her Majesty’s Revenue and Customs.
They compile and maintain a full list of all rateable values, available at www.gov.uk/voa.
The rateable value of your property is shown on the front of your bill. This broadly represents the yearly rent the property could have been let for on the open market on a particular date specified in legislation. The next revaluation will come into effect on 1 April 2023, based on rental values from 1 April 2021. The VOA may alter the valuation if circumstances change.
Further information about the grounds on which challenges may be made and the process for doing so can be obtained by contacting the VOA, or by consulting the VOA website.
All non-domestic property rateable values are reassessed at revaluations.
At revaluation, the Valuation Office Agency (VOA) adjusts the rateable value of business properties to reflect changes in the property market. As indicates, the most recent revaluation is referred to above. The next revaluation will come into effect on 1 April 2026, based on rental values from 1 April 2024.
Frequent revaluations ensure the system continues to be responsive to changing economic conditions.
Details of permanent rates reliefs (reductions to your business rates bill) have been published on the following website page, but the Government often introduces temporary reliefs at budgets.
Further details on current temporary reliefs available can be found on the Government's website: www.gov.uk/apply-for-business-rate-relief.
You should contact Rugby Borough Council for details on the latest availability of business rates reliefs and advice on whether you may qualify.
If a ratepayer’s sole or main property has a rateable value which does not exceed a set threshold, the ratepayer may receive a percentage reduction in their rates bill for the property of up to a maximum of 100 per cent.
The level of reduction will depend on the rateable value of the property. For example, eligible properties with a rateable value below a specified lower threshold will receive 100 per cent relief. Eligible properties between that threshold and a specified upper threshold may receive partial, tapered relief.
The relevant thresholds for relief are set by the Government by order and can be obtained from Rugby Borough Council or at www.gov.uk/introduction-to-businessrates.
Generally, these percentage reductions (reliefs) are only available to ratepayers who occupy either:
(a) one property, or
(b) one main property and other additional properties providing those additional properties each have a rateable value which does not exceed the limit set by order.
The aggregate rateable value of all the properties mentioned in (b), must also not exceed an amount set by order. For those businesses that take on an additional property which would normally have meant the loss of small business rate relief, they will be allowed to keep that relief for a fixed additional period.
Full details on the relevant limits in relation to second properties and the current period for which a ratepayer may continue to receive relief after taking on an additional property can be obtained from Rugby Borough Council or at www.gov.uk/introduction-to-business-rates.
Certain changes in circumstances will need to be notified to the local authority by the ratepayer who is in receipt of relief (other changes will be picked up by the local authority). The changes which should be notified are:
(a) the property falling vacant,
(b) the ratepayer taking up occupation of an additional property, or
(c) an increase in the rateable value of a property occupied by the ratepayer in an area other than the area of the local authority which granted the relief.
Charities and registered community amateur sports clubs are entitled to 80 per cent relief where the property is occupied by the charity or the club and is wholly or mainly used for the charitable purposes of the charity (or of that and other charities), or for the purposes of the club (or of that and other clubs).
Rugby Borough Council has discretion to give further relief on the remaining bill. Full details can be obtained from the council.
At a revaluation, some ratepayers will see reductions or no change in their bill, whereas some ratepayers will see increases.
Transitional relief schemes are introduced at each revaluation to help those facing increases.
Transitional relief is applied automatically to bills. Further information about transitional arrangements and other reliefs may be obtained from Rugby Borough Council or www.gov.uk/introduction-tobusiness-rates.
Local authorities have a general power to grant discretionary local discounts and give hardship relief in specific circumstances.
Full details can be obtained from Rugby Borough Council.
You can get heat networks relief if your property is only used or mainly used as a ‘heat network’.
A heat network supplies heating or cooling to other properties from a central source. To be eligible, the heat network must:
The heat network must not supply heat or cooling for industrial use - for example, to create products in factories.
You will not pay business rates if your property is eligible for heat networks relief.
Contact the Valuation Office Agency (VOA) to check if your property is eligible for heat networks relief.
Report changes to make sure you’re paying the right amount and do not get a backdated increase in your bill or overpay your bill.
Contact the VOA if the property is no longer only or mainly used as a heat network.
Business rates are generally payable in respect of unoccupied non-domestic property.
However, they are generally not payable for the first three months that a property is empty. This is extended to six months in the case of certain industrial premises, whilst certain other properties such as vacant listed buildings are not liable for business rates until they are reoccupied.
Full details on exemptions can be obtained from Rugby Borough Council or at www.gov.uk/apply-for-business-rate-relief.
The new UK subsidy control regime launched on 4 January 2023.
The new regime enables public authorities, including devolved administrations and local authorities, to deliver subsidies that are tailored for local needs.
Public authorities giving subsidies must comply with the UK's international subsidy control commitments. The subsidy control legislation provides the framework for a new, UK-wide subsidy control regime.
Further information about subsidy control can be found on the Government website.
Visit the Government website for more information on the Subsidy Control Regime
Ratepayers do not have to be represented in discussions about the rateable value of their property or their rates bill.
However, ratepayers who do wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors (RICS - www.rics.org) and the Institute of Revenues, Rating and Valuation (IRRV - www.irrv.org.uk) are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct.
Before you employ a rating adviser or company 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.
Information relating to the relevant and previous financial years in regard to the gross expenditure of the local authority is available on the council's website.
A hard copy is available by contacting Rugby Borough Council. See the back of your bill for contact details.