Guide to Business Improvement Districts (BIDs)

What is a Business Improvement District (BID)?

A Business Improvement District is a defined area where local businesses come together to fund improvements to their trading environment.

A BID covers a clearly defined geographic area, with boundaries set as part of the proposal.

BIDs are business-led partnerships, typically delivering projects such as improved security, cleaning, marketing and public realm enhancements.

They’re funded through a levy on businesses within the area, which is then reinvested locally to support agreed priorities.

How BID levies work

A BID levy is an additional charge applied to eligible businesses within a BID area. 

• The levy is usually calculated as a percentage of your property’s rateable value
• In many cases, this is around 1%–2%, although it can vary by scheme
• The levy is typically billed annually

The funds raised are ring-fenced and used only within the BID area to deliver the agreed business plan.

Who pays the BID levy

In most cases, the BID levy is payable by the occupier (ratepayer) of a property within the BID boundary.

• If your property is vacant, the owner may become liable
• Some properties may be excluded depending on the BID rules, often based on rateable value thresholds
• Once a BID is in place, payment is mandatory for all eligible businesses, regardless of how they voted

In some cases, particularly in owner-led BIDs, the levy may be payable by the property owner rather than the occupier.

How BIDs are set up and approved

BIDs are established through a formal ballot process. Each BID is based on a defined business plan, which sets out how funds will be used, how the levy will be applied and how the scheme will be managed. To be approved, two conditions must be met:

• A majority of businesses voting must vote in favour
• Those voting in favour must also represent a majority of the total rateable value of votes cast

If both conditions are met, the BID is implemented and the levy becomes compulsory for all eligible businesses in the area.

How long BIDs last and how they are renewed

BIDs typically operate for a fixed term of five years. At the end of the term:

• A new ballot is required for the BID to continue
• Businesses vote again on whether to approve a further term
• If approved, the BID can continue with a new or updated business plan

BID levy collection and enforcement

Although BIDs are business-led, the levy is usually collected by the local authority.

• The levy is billed separately from, but often alongside, business rates
• Local authorities are responsible for collection and enforcement
• Non-payment can lead to recovery action, similar to business rates

How BIDs differ from business rates

While BID levies are linked to rateable value, they’re separate from business rates. Key differences include:

• Business rates are a national tax, while BID levies are local and ring-fenced
• Business rates fund public services, while BIDs fund additional local improvements
• BID schemes are time-limited and subject to renewal through ballot

When more specialist advice may be needed

While BID levies are generally straightforward, things can become more complex depending on how a scheme is structured and how liability is applied. This can include situations where:

• Liability sits between occupier and owner
• Properties fall near exemption thresholds
• Changes to rateable value affect the levy
• You hold multiple properties within a BID area

If you’re unsure how a BID levy applies to your property or portfolio, taking advice can help you understand your position and manage your overall costs more effectively.