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Business Rates

UK business rates advisers

Business rates in the UK are a tax on the right to occupy commercial property and typically equate to approximately 50% of annual rent. They represent one of the largest overheads for businesses and substantially impact on profitability.

Business rates management & reductions

Business rates are calculated in a two-step process. Firstly, the Valuation Office Agency (VOA) are tasked with estimating the annual rent the property is likely to let for as at a statutorily fixed valuation date. This is called a Rateable Value (RV) and is placed in the rating list alongside the address of the property to form the assessment. These can be found on the VOA website here.

The second step is this RV is then used to create the liability by multiplying it by the Uniform Business Rate (UBR) factor which is set every year. This is typically around 50p in the £ and therefore the charge is approximately 50% of the annual rent. The UBR is adjusted every year for inflation by applying the Retail Price Index (RPI).

2017 Rating Revaluation

The VOA are responsible for revaluing all assessments usually every five years. The valuations are based on the rental market two years prior to the rating list going live and this is called the Antecedent Valuation Date (AVD). The latest rating list came into force on the 1st April 2017 with rateable values based on the rental market of April 2015. Unusually, the last time the revaluation had been carried out was seven years prior in April 2008 and it is the change in the property market over these seven years which is now reflected in the new assessments.

Further information on how rates are calculated

Give me an example calculation

The Standard Multiplier for 2017/18 in England for any unoccupied property with Rateable Value (RV) of £2,900 or above and any occupied property with RV over £51,000 or above is £0.479p, if you became liable on a commercial assessment with an RV of £60,000 for example, to calculate your liability you would multiply the 'multiplier' by the RV: £0.479p x £60,000 = £28,740. Your estimated business rate charge for the full financial year before any reliefs, discounts or exemptions are applied would be £28,740.

*2017/18 Multiplier for qualifying occupied assessments between RV 2,901 & 50,999 is £0.466p. Unoccupied assessments with RV £2,900 and below are exempt from any rate liability.
**City of London apply a supplement of £0.05p onto the standard multiplier.
***All assessment over RV £70,000 within Greater London have an additional Business Rates Supplement of £0.02p added to their charge for Crossrail.

Are there any exemptions?

Announced in March 2016's budget, small business rate relief will double from £6,000 to £12,000 from April 2017. Small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates (subject to qualifying conditions). There will be tiered relief on properties worth up to £15,000. Any property with a rateable value of £51,000 or below will be calculated using the Small Business Multiplier.

From 1st April 2017, the threshold at which empty properties become liable to pay rates increased to £2,900.

How Knight Frank can help you

As one of the leading specialist teams in this sector, we offer a full rates management service which will ensure that this costly overhead is mitigated at every stage. Article I.

Our services

  • Account management
  • Valuations, challenges and appeals
  • Compliance & auditing
  • Rate mitigation for empty properties

Knight Frank's business rates experts are members of the Royal Institute of Chartered Surveyors (RICS) and the Institute of Revenues, Rating and Valuation (IRRV)

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