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How business rates are calculated and Explanatory Notes

Business rates reductions and explanatory notes

Business rates for 2021/2022

We are sending out business rates (NNDR) bills from 15 March 2021.

  • If you pay by Direct Debit you do not need to contact us to make any changes.
  • If you pay by standing order or bank payments the new amounts will be detailed on the bill.

If you are responsible for paying business rates, there are certain situations where you may not have to pay the full amount, or may be exempt completely. You can apply for relief, reduction or exemption, but before you do please read this page and our Register for business rates page.

If you are applying for any discretionary relief or have any queries regarding reductions, exemptions or relief, please contact us for details of the specific application process you will need to follow.

Changes to Business Rates from 1 April 2021

Following the Chancellor's announcement on 3 March 2021, additional business rates measures will apply from 1 April 2021:

  • Retail discount – Retail discount will remain at 100% from 1 April 2021 to 30 June 2021. From 1 July 2021 to 31 March 2022, the amount of relief will be reduced to 66% of your annual charge. A revised account will be issued to you no later than 15 June 2021, with instalments to clear the remaining balance commencing on 1 July 2021.
  • Nursery discount - Nursery discount will remain at 100% from 1 April 2021 to 30 June 2021. From 1 July 2021 to 31 March 2022, the amount of relief will be reduced to 66% of your annual charge. A revised account will be issued to you no later than 15 June 2021, with instalments to clear the remaining balance commencing on 1 July 2021.

Supporting Small Business Relief

This scheme, which will run for five years, is intended to support local businesses following the 2017 revaluation and does not replace any other relief.

The relief will help those ratepayers who, as a result of the change in their rateable value at the revaluation, are losing some or all of their small business rate relief, and as a result are facing large increases in their bills.

To support these ratepayers, the relief will ensure that the increase per year is limited to the greater of:

  • A percentage increase of 5% in 2017/18 (7.5% 18/19, 10% 19/20, 15% 20/21 and 15% 21/22) plus inflation.
  • A cash value of £600 per year (£50 month).

In the first year of the scheme, this means all ratepayers losing some or all of their small business rate relief will see the increase in their bill capped at £600. This is increased by the same figure each year thereafter so that in year five, a ratepayer who paid nothing prior to 01.04.17 because of 100% small business rate relief, (ie moving from £6,000 rateable value or less to more than £15,000) would then, under this scheme be paying £3,000.

Explanatory Notes 2021-22

Non-Domestic Rates

Non-Domestic Rates, or business rates, collected by local councils are the way those who occupy non-domestic property contribute towards the cost of local services. Under the business rates retention arrangements, councils keep some of the business rates paid locally. Further information about the business rates system, including transitional and other reliefs, can be found on gov.uk

Rateable Value

Apart from properties exempt from business rates, each non-domestic property has a rateable value set by the valuation officers of the Valuation Office Agency (VOA). They draw up and maintain a full list of all rateable values.

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. For the revaluation that came into effect on 1 April 2017, this date was set as 1 April 2015.

Can I appeal against my property’s valuation?

The Valuation Office Agency (VOA) values all business properties for business rates.  The valuation is based on information the VOA holds about your property. You can view and update this information at gov.uk/voa/valuation

You can contact the VOA at gov.uk/contact-voa. If you are unable to use the online service you can also contact the VOA on 03000 501 501.

The valuation officer may alter the value if circumstances change. The ratepayer and others who have an interest in the property can appeal against the value shown in the list if they believe it is wrong. 

Your billing authority can only backdate any business rates rebate to the date from which any change to the list is to have effect.

The VOA is contacting businesses to request rental information to support the next revaluation of business rates in England and Wales – Revaluation 2023.

If you receive a request, please complete and submit your up-to-date details. It is important to provide this information to ensure business rates are fair and accurate. You can find more information at gov.uk/voa/revaluation2023

 

National Non-Domestic Rating Multiplier

The local council works out the business rates bill by multiplying the rateable value of the property by the appropriate multiplier. There are two multipliers: the standard non-domestic rating multiplier and the small business non-domestic rating multiplier. The former is higher to pay for small business rate relief. The government sets the multipliers for each financial year according to formulae set by legislation. The current multipliers are shown on the front of your bill.

Business Rates instalments

Payment of business rate bills is automatically set on a 10-monthly cycle. However, the Government has put in place regulations that allow businesses 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 the local authority as soon as possible. 

PLEASE NOTE: Whilst this is optional, Waverley has assumed that all businesses will want to take advantage of this more beneficial payment plan in 2021/2022 to assist cash flow, so it has been applied automatically to your bill. If you would prefer to pay by 10 instalments, please contact the Business Rates Team as soon as possible.

Revaluation 2017 and transitional arrangements

All rateable values are reassessed at a general revaluation. The 2017 revaluation took effect from 1 April 2017.  For those that would otherwise see significant increases in their rates liability, the government put in place a £3.6 billion transitional relief scheme to limit and phase in changes in rate bills as a result of the 2017 revaluation. To help pay for the limits on increases in bills, there also have to be limits on reductions in bills. Under the transitional scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the appropriate multiplier).

The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after 1 April 2017, transitional arrangements will not normally apply to the part of a bill that relates to any increase in rateable value due to those changes. Changes to your bill as a result of other reasons (such as changes to the amount of small business rate relief) are not covered by the transitional arrangements.

The transitional arrangements are applied automatically and are shown on the front of your bill. Further information about transitional arrangements and other reliefs may be obtained from the council or www.gov.uk

Unoccupied property rating

Business rates will not be payable for the first three months a property is empty. This is extended to six months for certain industrial properties. After this period, rates are payable in full unless the unoccupied property rate has been reduced by the Government by order. In most cases the unoccupied property rate is zero for properties owned by charities and community amateur sports clubs. In addition, there are a number of exemptions from the unoccupied property rate. Full details on exemptions can be obtained from the council. If the unoccupied property rate for the financial year has been reduced by order, it will be shown on the front of your bill.

Small Business Rate Relief

We calculate bills using the lower small business non-domestic rating multiplier, rather than the national non-domestic rating multiplier, for ratepayers who:

  • Occupy a property with a rateable value which does not exceed £50,999
  • Are not entitled to other mandatory relief
  • Are not liable for unoccupied property rates.

In addition, if the sole or main property is shown on the rating list with a rateable value which does not exceed £15,000, the ratepayer will receive a percentage reduction in their rates bill for this property up to a maximum of 100%. For a property with a rateable value of not more than £12,000, the ratepayer will receive a 100% reduction in their rates bill.

This percentage reduction (relief) is only available to ratepayers who occupy either:

  1. One property.
  2. One main property and other additional properties providing those additional properties each have a rateable value which does not exceed £2,899.

The rateable value of the property mentioned in 1, or the aggregate rateable value of all the properties mentioned in 2, must not exceed £19,999 outside London or £27,999 in London, on each day for which relief is being sought. If the rateable value, or aggregate rateable value, increases above those levels, relief will cease from the day of the increase.

An application for Small Business Rate Relief is not needed. If a ratepayer meets the eligibility criteria and has not received the relief, they should contact us. As long as the ratepayer meets the current conditions to get relief, they will automatically receive relief in each new valuation period.

Certain changes in circumstances will need to be notified to us by a ratepayer who is in receipt of relief. The changes which should be notified are:

  • The ratepayer taking up occupation of an additional property.
  • 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.

Charity and community amateur sports club relief

Charities and registered Community Amateur Sports Clubs are entitled to 80% relief, if the property is occupied by the charity or club and used mainly for the charitable purposes of that and other charities, or the club. We can give further relief on the remaining bill if we think it is appropriate.

Partly occupied property relief

A ratepayer is liable for the full non-domestic rate whether a property is wholly occupied or only partly occupied. Where a property is partly occupied for a short time, the local authority has discretion in certain cases to award relief in respect of the unoccupied part.

Spring Budget 2017 Relief Scheme: Discretionary Scheme

The Government provided £300 million of funding to local authorities over 4 years to 31 March 2021 to provide discounts to ratepayers in their area on a discretionary basis.  

This relief was delivered through local authority discretionary powers (under section 47(3) of the Local Government Finance Act 1988). This ended on 31 March 2021 so will no longer be inluded on bills from 1 April 2021.

Local discounts

Local Authorities have a general power to grant discretionary local discounts. Waverley’s policy is to only agree local discounts when it is in the interests of the wider council tax payers in the borough and requests are considered on a case-by-case basis. 

Local Newspaper Relief

From 1 April 2017 the Government provided funding to local authorities so that they can provide a discount worth £1,500 in year 2017/18 and 2018/19 for office space occupied by local newspapers. The Autumn budget 2018 extended this relief to financial year 2019/20.

In a Written Ministerial Statement 27 January 2020, the Government further extended this relief to apply in the financial years 2020/21 to 2024/25.

This relief needs to comply with the European Union law on State Aid. Therefore, to qualify for this relief, your business should not receive more than €200,000 of State Aid in a 3 year period (being the current and prior two financial years). The €200,000 threshold may be of particular relevance to those premises that are part of a large chain.

Please note that this relief will cease at the end of the 2024/25 financial year.

Hardship Relief

Local authorities can give relief in special circumstances and Waverley has an approved policy on discretionary rate relief and hardship relief. Full details can be obtained from the Waverley business rates team on 01483 523522.   

Rating advisers

Ratepayers do not have to be represented in discussions about their rateable value 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 - website www.rics.org) and the Institute of Revenues, Rating and Valuation (IRRV - website 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, 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 supplied with demand notices

Information relating to the relevant and previous financial years in regard to the gross expenditure of the local authority is available on the Council Tax section of our website. A hard copy is available on request by writing to the council or at 01483 523522 or via email: nndr@waverley.gov.uk

Rate relief for businesses in rural areas

Certain types of properties in a rural settlement with a population below 3,000 may be entitled to relief. The property must be the only general store, the only post office or a food shop and have a rateable value of less than £8,500, or the only public house or the only petrol station and have a rateable value of less than £12,500. The property has to be occupied. An eligible ratepayer is entitled to relief at 50% of the full charge while the local authority also has discretion to give further relief from 50% to 100% since 1 April 2017. Local authorities have been expected to use their local discount powers to grant 100% rural rate relief to eligible ratepayers since 1 April 2017.