Business rates are a tax on the occupation of non-domestic property, such as shops, offices, warehouses, factories, etc. Business rates are charged by local councils and are based on the property’s rateable value, which is its open market rental value estimated by the Valuation Office Agency (VOA).
Business rates are usually paid by the occupier or tenant of the property but sometimes by the owner or landlord.
The monies earned from the collection of business rates are generally used to fund local services, such as roads, street lighting, waste collection, etc.
There are several reliefs and exemptions from business rates available. These include relief for small businesses, charities, and businesses that occupy certain property types.
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As of April 2023, the UK government declared the removal of business rates for all retail, hospitality, and leisure properties in England. This will be a significant relief for businesses in these sectors and help support the recovery of the UK economy.
Here are some of the critical things to know about business rates in the UK:
- Business rates are a tax on non-domestic properties. This means businesses that occupy property in the UK for their trade, profession, or vocation are liable to pay business rates.
- The amount of business rates a business pays is based on the rateable value of the property they occupy. The rateable value measures the property’s annual rental value and is determined by the Valuation Office Agency (VOA).
- Business rates are payable in arrears. This means that businesses pay their business rates for the previous year in the current year. Business rates are due on the 1st of April each year, but businesses can pay them in installments.
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- There are several reliefs and exemptions from business rates available. These include relief for small businesses, charities, and businesses that occupy certain property types.
If you are a business owner in the UK, it is essential to understand how business rates work. You can find more information about business rates on the government website.