Introduction to Business Rates

Business rates, also known as non-domestic rates, are a property tax paid by businesses and other organizations that occupy non-domestic properties, such as shops, offices, and factories. In this explanation, we will cover key terms and vocabulary related to business rates that you will encounter in the Professional Certificate Course in Business Rates.

Assessment: The process of determining the rateable value of a non-domestic property, which is used to calculate the business rates payable.

Bill: A document that sets out the amount of business rates payable by a ratepayer for a particular property.

Check, Challenge, Appeal: A process introduced in England and Wales in 2017 that allows ratepayers to challenge the rateable value of their property if they believe it is incorrect.

Empty property rate: A rate payable by the owners of unoccupied non-domestic properties.

Material change of circumstances: A change in the property or its locality that could affect the rateable value, such as a new road being built nearby.

Non-domestic property: A property that is not used as a dwelling, such as a shop, office, or factory.

Rateable value: The value assigned to a non-domestic property for the purpose of calculating business rates. It is based on the annual rent that the property could reasonably be expected to let for, excluding any rates payable.

Ratepayer: The person or organization responsible for paying business rates for a particular property.

Relief: A reduction in the amount of business rates payable, available to certain ratepayers under specific circumstances, such as small businesses, charities, and those in rural areas.

Revaluation: The process of reassessing the rateable values of all non-domestic properties in England and Wales, typically taking place every five years.

Transitional relief: A scheme introduced in England and Wales in 2017 to limit the impact of the revaluation on ratepayers by phasing in changes to the rateable value over a period of time.

Uniform business rate: The uniform rate of business rates set by central government, applied to the rateable value of a property to calculate the amount of business rates payable.

Assessment:

The assessment of a non-domestic property involves determining its rateable value, which is used to calculate the business rates payable. The Valuation Office Agency (VOA) is responsible for assessing the rateable value of all non-domestic properties in England and Wales. The assessment is based on the property's rental value, and takes into account factors such as location, size, and condition.

Bill:

A business rates bill is a document that sets out the amount of business rates payable by a ratepayer for a particular property. The bill will include the rateable value of the property, the uniform business rate, any reliefs or exemptions, and the amount payable.

Check, Challenge, Appeal:

The Check, Challenge, Appeal process was introduced in England and Wales in 2017 to allow ratepayers to challenge the rateable value of their property if they believe it is incorrect. The process involves three stages - checking the information held by the VOA, challenging the rateable value if it is incorrect, and appealing to the Valuation Tribunal if necessary.

Empty property rate:

An empty property rate is a rate payable by the owners of unoccupied non-domestic properties. The rate is set at 100% of the business rates payable for the property, although there are some exemptions and reliefs available.

Material change of circumstances:

A material change of circumstances is a change in the property or its locality that could affect the rateable value. Examples include the construction of a new road or the opening of a new shopping center nearby. Ratepayers can apply to the VOA for a review of their rateable value if they believe a material change of circumstances has occurred.

Non-domestic property:

A non-domestic property is a property that is not used as a dwelling, such as a shop, office, or factory. Non-domestic properties are used for business purposes and are subject to business rates.

Rateable value:

The rateable value is the value assigned to a non-domestic property for the purpose of calculating business rates. The rateable value is based on the annual rent that the property could reasonably be expected to let for, excluding any rates payable. The rateable value is used to calculate the amount of business rates payable.

Ratepayer:

The ratepayer is the person or organization responsible for paying business rates for a particular property. The ratepayer may be the occupier of the property or the owner, depending on the circumstances.

Relief:

Relief is a reduction in the amount of business rates payable, available to certain ratepayers under specific circumstances. Examples of relief include small business relief, rural rate relief, and charity relief.

Revaluation:

A revaluation is the process of reassessing the rateable values of all non-domestic properties in England and Wales. Revaluations typically take place every five years, with the most recent revaluation taking place in 2017.

Transitional relief:

Transitional relief is a scheme introduced in England and Wales in 2017 to limit the impact of the revaluation on ratepayers by phasing in changes to the rateable value over a period of time. The scheme applies to ratepayers who would otherwise see a significant increase or decrease in their business rates as a result of the revaluation.

Uniform business rate:

The uniform business rate is the rate of business rates set by central government, applied to the rateable value of a property to calculate the amount of business rates payable. The uniform business rate is the same for all non-domestic properties in a particular area.

In conclusion, this explanation has covered key terms and vocabulary related to business rates that you will encounter in the Professional Certificate Course in Business Rates. Understanding these terms is essential for anyone involved in the management or occupation of non-domestic properties, as they affect the amount of business rates payable. It is important to stay up-to-date with changes to business rates policy and to engage with the assessment and appeal process where necessary to ensure that rateable values are fair and accurate.