Business Rates is the more common term used for Non Domestic Rates – a charge applied to all non-domestic (or commercial) premesis. These premesis include shops, offices, restaurants, pubs, warehouses and factories.
If you use a building, or part of a building for business purposes then you will have to pay business rates. The Valuation office Agency value give each property a Rateable Value (RV) which represents the open market value of a property on a set date.
Rateable Values are based on the commercial property market of around two years prior to each rating list. A rating list is set every 5 years (1990, 1995, 2000,2005, 2010 and so on) to reflect the worth of properties in the commercial property market. The RV on a property in 2010 is based on the rental value of that property in 2008. It is done this way so that the Valuation Office has the chance to collate all their information and publish the new rating list in time.
The RV that is given is then used by your local government to calculate the amount of business rates you will owe. The council multiply the Rv with a multiplier that is set by the government. The Multiplier represents the number of pence in each pound of the RV that is payable in business rates – before any releifs or discounts are applied. The multiplier will be reviewed by the government each year to reflect changes in inflation. This is why your bill may fluctuate year by year – your RV will stay that same but the multiplier will determine how many pence in each pound you pay in business rates.
The Multiplier will be different if you are in central London or Wales.