Business rates in the UK are a longstanding form of taxation, originating from the Poor Law of 1601. These rates represent a tax levied on the occupation of non-domestic properties, amounting to around 50% of the property’s annual rent. The rates are based on a “rateable value,” which reflects what the property could rent for in the open market on a designated evaluation date set by law. The current rating list is based on valuations as of April 3, 2023.
Business rates contribute to local authority services and are administered by local councils. Since the implementation of business rates retention in April 2013, councils retain a portion of the rates collected. While intended to support local services, business rates are often criticized for being one of the largest overhead costs for businesses.
The Valuation Office Agency (VOA) is responsible for setting these rates, maintaining a list of rateable values, and managing appeals. Business operators can challenge their property valuations through a streamlined process known as Check, Challenge, Appeal (CCA), which places the onus on them to verify their assessments before moving forward with disputes.
Occupiers, whether landlords or tenants, are typically responsible for paying business rates. However, if a property is vacant, the landlord is liable after a grace period. Certain reliefs may apply, especially for businesses in sectors like retail and hospitality, reflecting government adjustments following the impact of Covid-19.
Navigating the complexities of business rates can be daunting, making it advisable for businesses to seek expert assistance when needed.
Why this story matters: Understanding business rates is crucial for financial planning and local economic contribution.
Key takeaway: Business rates represent a significant overhead for businesses and can be contested through a formal process.
Opposing viewpoint: Critics argue that business rates impose undue financial strain on businesses, particularly in challenging economic climates.
