Rateable value and multipliers
Every non-domestic property, unless it is exempt has a rateable value. The rateable value is assessed by the Valuation Office Agency, which is an agency of HM Revenue and Customs. A non-domestic property's rateable value is an assessment of the annual rent the property would rent for if it were available to let on the open market at a fixed valuation date.
Business Rates bills are worked out by multiplying your rateable value by the multiplier or ‘poundage’. The two multipliers standard and small business rates (SBR) multipliers, are set by the Secretary of State each year (small business rates relief was only brought in from 2005/2006 so there are no SBR multiplers before this year). The rateable value is determined by the Valuation Office Agency (VOA). 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.
Examples relating to the year 2017/2018:
- Rateable value of £75,000 x standard multiplier of 0.479 = £35,925 rates payable
- Rateable value £13,000 x small business rates multiplier* of 0.466 = £6058 rates payable
*If small business rate relief granted or rateable value less than £50,999
|Year||Standard Multiplier||Small Business Rates Multiplier|
The VOA regularly reassess and update the rateable values of all business properties; usually every five years. This is called a Revaluation. This is done to maintain fairness in the system by redistributing the total amount payable in business rates, reflecting changes in the property market. Revaluation does not raise extra revenue overall.
The 2017 revaluation takes effect from 1st April 2017 and the rateable values will be based on a valuation date of 1 April 2015. (Until 31 March 2017, the rateable values will be based on a valuation date of 1 April 2008).
Whilst the 2017 revaluation will not increase the amount of rates collected nationally, within this overall picture, over 7 out of 10 ratepayers will receive a reduction or no change in their bill and some ratepayers will see increases.
More information on the 2017 revaluation can be found at www.gov.uk/introduction-to-business-rates/revaluation
Check Challenge Appeal
You can click, find and review your rateable value on the VOA’s website. If you have reason to believe that your 2017 rateable value is not correct, follow the instructions provided on the site. You will need to do the following:
- CHECK - review and confirm the facts about your property held by the VOA
- CHALLENGE – once the facts are established, explain why you believe your valuation is wrong.
An appeal on your 2017 rateable value is not possible, and may not be necessary, until you have completed CHECK and CHALLENGE
Property values normally change a good deal between each revaluation. Transitional arrangements help to phase in the effects of these changes on ratepayers’ bills.
For those that would otherwise see significant increases in their rates liability, the Government has put in place a £3.6 billion transitional relief scheme to limit and phase in changes in rates 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 1st 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 Harlow Council or the www.gov.uk/introduction-to-business-rates.
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, the increase in your bill will be limited by these amounts
|Year||Small property (rateable value of less than or equal to £20,000)||Meduim property (rateable value of £20,001 to £100,000)||Large property (above £100,000)|
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 is calculated as 1.02% for 2017/18.
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, the decrease in your bill will be limited by these amounts.
(rateable value of less than £20,000)
|Medium property (rateable value of £20,001 to £100,000)||Large property (rateable value above £100,000)|
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 has been calculated as 1.02% for 2017/18.