Everything you need to know about changes to business rates

15 May 2023, by Verity Editor

pocket watch in hand

While you’re busy running your business or managing your commercial property portfolio, tracking business rate changes, when you are eligible for business rate bill reductions, and what factors affect your business rates can be challenging.

However, it’s incredibly important to ensure that your business rates are regularly updated, and here’s why.

With the current economic and energy crisis, commercial tenants and landlords need to keep a close eye on their business rates bills to keep overheads to a minimum and, importantly, ensure you’re not overpaying.

To assist you with this and make business rates management that bit easier, our business rates experts have put together a complete guide to how business rates can change over time, so you know when you are due for a rates review.

9 key factors that affect business rates bills

Below you’ll find a list of the most important factors to be aware of when it comes to business rates changes.

If you don’t inform the Valuation Office Agency (VOA) of these changes, there’s a high chance they will issue you with a backdated bill as well as what you typically pay.

So make sure your property or properties are up to date with the following factors to avoid paying more than necessary.

#1 If there was a business rates revaluation

Every few years, the VOA will modify the rateable value of commercial properties in the UK to mirror any property market changes accurately.

The last revelation happened in April 2017, and the next one is due to affect rateable values from the 1st of April 2023.

Once the revelation has occurred, each property type will be issued with a new rateable value. This new rateable value may or may not impact your business rates bill.

#2 If your pub’s trade levels change per year

For owners of a commercial property with a licence to sell alcohol or a pub, business rates can change depending on the level of trade (minus VAT) you expect to reach per year if you run your business efficiently.

The VOA describes this as “fair maintainable trade” and bases it on your pub type, where it’s located, what services you offer, rent, and annual turnover to work out your property’s rateable value.

#3 If your holiday let availability changes

If you let out your commercial property as self-catering or holiday let accommodation and you change your property’s availability, your business rates can vary.

These changes are dependent on the number of days people can book your property each year and the number of days people do book throughout the year.

#4 If you move commercial properties

Moving properties will, of course, affect your business rates, as the new property will come with its own set of circumstances that change the amount you need to pay.

#5 If you modify your property

If you make any changes to your commercial property, you may be entitled to a reduction on your business rates bill, or indeed, you may have to pay more.

Adding an extension, for example, or upgrading your property’s windows will impact the rateable value of your property and, therefore, business rates.

#6 If your business structure changes

Let’s say you’re pivoting from selling baked goods to teaching baking classes. In this case, your business rates will likely change as you have changed the nature of your business.

Additionally, if you diversify your business by adding another service, you may see an increase or decrease in your business rates.

#7 If you let your property to someone else

If you sublease your commercial property to another business owner or individual, there is a significant chance that your business rates will change as a result.

#8 If you combine two premises into one

It’s often the case that a landlord, commercial property owner, or business owner wishes to merge two properties into one larger space. In that case, you will need to inform the VOA of the changes to your premises, as joining two properties will impact your business rates.

#9 If a local factor disrupts your property

Every commercial property owner will face disruption to their premises from time to time. What many landlords and tenants need to realise, however, is that you might be entitled to a temporary reduction in your business rates.

Whether it’s local authorities carrying out water works, flooding affecting your property, or even a protest cutting off access to your property, these factors are beyond your control and impact your property, so paying maximum business rates isn’t fair.

Want to learn more about business rates? Check out our “all you need to know about business rates” guide.

Too busy to keep track of your business rates changes?

While understanding when you need to inform the VOA about changes to your business or commercial premises is an important responsibility to help you keep costs down, it can be a challenging process. Why not let our business rates experts at Verity do all the hard work for you?

At Verity, our rates experts are helping landlords and tenants all over the UK generate £18 million in savings every year on their business rates bills.

We liaise with the Local Authority and the VOA on your behalf to help you minimise your business rates with a no-win, no-fee guarantee. So if you want your business rates checked for free, get in touch with us today to see how much you could save.

Outstanding service. Very professional to deal with – they know what they’re doing and do it extremely well. They saved me thousands of pounds. I wouldn’t hesitate to recommend.

Catherine Garel-Jones

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