Business Rates Frequently Asked Questions
Who has to pay the Business Rates?
The occupier of a non-domestic property normally pays the
Business Rates – usually this is the owner-occupier or leaseholder.
If a property is empty, the owner or leaseholder will have to pay a
reduced rate.
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What is a non-domestic property?
Non-domestic properties are business properties such as shops,
offices, warehouses and factories, and any other property that is
not classed as domestic property. In some cases, properties may be
used for both domestic and non-domestic use (for example, a shop
with a flat above it), in which case both Council Tax and Business
Rates will be charged.
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What if I work from home?
If you work from home, Harlow Council may charge Business
Rates for the part of the property used for work, and you will have
to pay Council Tax for the rest of the property (although your
property’s valuation band may change). It will depend on the
circumstances of each case and you should ask your local Valuation Office Agency office for advice.
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What if I own a holiday home?
Unless you plan to make your holiday home available for hire for
at least 140 days a year, you will not have to pay Business Rates
on the property. You will have to pay Council Tax instead.
If you offer bed-and-breakfast accommodation in your own home to
six people (or fewer), you will not be liable for Business Rates as
long as you are living in the property. You will have to pay
Council Tax on the whole property.
If you hire out your holiday home for more than 140 days a year,
or you provide bed-and-breakfast for more than six people at any
one time, you will have to pay Business Rates on that part of your
property. You will still have to pay Council Tax on the part of
your property you use as your home.
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Are any non-domestic properties exempt from Business
Rates?
Some types of property are exempt from Business Rates. This
means that no Business Rates are charged for them. Exempt
properties include:
- agricultural land and buildings
- fish farms
- churches and other places of worship
- sewers
- public parks
- certain property used for disabled people
- swinging moorings for boats
Follow this link to read more about
exemptions for Business Rates. |
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How much will I have to pay?
Every non-domestic property, unless it is exempt, has a rateable
value. Follow this link to read more
about charges for Business Rates. Business Rates bill is worked
out by multiplying your rateable value by the multiplier or
‘poundage’ which the Government sets from 1 April each year for the
whole of England. For example, in 2001/02 the multiplier (which is
often called the uniform business rate or UBR) was set at 43p. So,
if your rateable value was £10,000, then Harlow Council would
multiply this by 43p and your bill for the year would be £4300.
This may be the amount you have to pay, but it could be reduced
by any transitional or other reliefs you are entitled to, or
increased if your property is in downward transition following the
2005 revaluation.
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When and why does the multiplier change?
We normally change the multiplier every year to move in line
with inflation. By law, the multiplier cannot go up by more than
the rate of inflation except following a revaluation. This is so
that the value of the money raised through Business Rates each year
stays the same and the Government can pay for the same level of
service from Harlow Council and all the other councils. If we
did not do that, there would be reductions in local service levels
provided by the council or the shortfall in the cost of services
would have to be made up through national taxes or by increasing
Council Tax.
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What about the change in the multiplier, following a
revaluation?
Following a revaluation, the multiplier may change by a higher
amount than is explained above, but the total amount raised by
the Business Rates will stay the same after allowing for inflation.
So, if the total level of rateable values goes up because property
values in general have risen, the multiplier will fall to make sure
that the total amount raised from ratepayers stays the same.
That’s why, following the revaluation in 2000, the multiplier
for England was set at 41.6p, down from 48.9p in the previous
year.
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How often do revaluations take place and why do we have
them?
The Valuation Office Agency carries out a revaluation every five
years so that the values in the rating lists can be kept up to
date. The total amount of Business Rates collected in England does
not change except to reflect inflation, but revaluations make sure
that this is spread fairly between ratepayers.
The next revaluation is due in April 2010.
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What are transitional arrangements and why do we have
them?
Property values normally change a good deal between each
revaluation. Transitional arrangements help to phase in the effects
of these changes on ratepayers’ bills. To help pay for the limits
on increases in bills after a revaluation, there also have to be
limits on reductions in bills.
The transitional scheme introduced in England following the
revaluation in 2005 make sure that each Business Rates bill did not
change beyond certain limits in 2005/06 because of the revaluation.
Many bills changed by less than these amounts and the final amount
depended on a number of things that are described more fully in the
next section.
Under the transitional relief scheme, limits continue to apply
to yearly increases and decreases in the following years over the
life of the scheme until the full new amount is due (rateable value
times the multiplier).
This applies only to the bill based on your property at the time
of the revaluation. If there are any changes to the property after
the revaluation date, transitional arrangements will not normally
apply to the part of your bill that applies to any increase in
rateable value due to those changes.
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How are increases limited?
Transitional limits apply if, in any year, the amount you would
have to pay (based on your rateable value times the multiplier) is
higher than the previous year’s bill (based on the amount due on 31
March) by more than the amounts shown below. If this is the case,
your bill will be increased by these amounts.
|
Year
|
Small property
(rateable value of less than £12,000 or £18,000 in Greater
London)
|
Large property
(all others)
|
|
2000/01
|
5%
|
12.5%
|
|
2001/02
|
7.5%
|
15%
|
|
2002/03
|
7.5%
|
17.5%
|
|
2003/04
|
7.5%
|
17.5%
|
|
2004/05
|
7.5%
|
17.5%
|
| 2005/06 |
5% |
12.5% |
| 2006/07 |
7.5% |
17.5% |
| 2007/08 |
10% |
20% |
| 2008/09 |
15% |
25% |
But remember, after these limits have been applied to your bill,
your bill will still increase in line with inflation. This is based
on the retail price index in the previous September. Inflation was
1.1% for 2000/01 and 3.3% for 2001/02.
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Are reductions in bills limited too?
Yes. Transitional limits also apply if, in any year, the amount
you would have to pay (based on your rateable value times the
multiplier) is lower than the previous year’s bill (based on the
amount due on 31 March) by more than the amounts shown below. If
this is the case, your bill will be reduced by these amounts.
|
Year
|
Small property
(rateable value of less than £12,000 or £18,000 in Greater
London)
|
Large property
(all others)
|
|
2000/01
|
5%
|
2.5%
|
|
2001/02
|
5%
|
2.5%
|
|
2002/03
|
10%
|
5%
|
|
2003/04
|
12.5%
|
7.5%
|
|
2004/05
|
25%
|
15%
|
| 2005/06 |
30% |
12.5% |
| 2006/07 |
30% |
12.5% |
| 2007/08 |
35% |
14% |
| 2008/09 |
60% |
25% |
But remember, after your bill has been reduced by these limits,
your bill will still increase in line with inflation. This is based
on the retail price index in the previous September. Inflation was
1.1% for 2000/01 and 3.3% for 2001/02.
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