We collect business rates in a similar way to council tax. The rate collected is set by central government and changes slightly each year due to inflation. The standard “non-domestic rating multiplier” for 2021/22 is 51.2 pence (51.2%) in the pound, or 49.9 pence (49.9%) in the pound for small businesses (businesses with a rateable value under £51,000). This is multiplied by the rateable value of your business premises in order to calculate your bill. So if your business premises have a rateable value of £100,000, for example, your business rates charge for the year will be £51,200. If you are a small business with a rateable value of £20,000, for example, your business rates charge for the year will be £9,980.
Business rates are charged on most business properties such as shops, offices, pubs, warehouses and factories. However, the property doesn't have to be used for a business - if it is used for purposes which are not domestic it is likely to be rateable. Self catering accommodation, such as a holiday home, is also liable to pay business rates if it is available to let for 140 days or more in a year. Businesses run from domestic properties may also be subject to business rates as well as council tax.
- occupied property: the person, partnership or company that occupies it is liable for business rates. This may be as owner, tenant or without a formal agreement
- unoccupied property: the party entitled to possession is liable - this might be the owner, or a tenant if they still have a lease even though they've left the property
What is the rateable value?
The rateable value is assessed by the Valuation Office Agency, which is an agency of HM Revenue and Customs.
A 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.
- until 31 March 2017, the rateable values will be based on a valuation date of 1 April 2008
- from 1 April 2017, the rateable values will be based on the valuation date of 1 April 2015
You can check your rateable value details and request changes if you think it is wrong by visiting www.gov.uk/correct-your-business-rates.
Business rates 2021/22
In 2021/22, Harrogate is part of the Leeds City Region (LCR) business rates pool. As such, business rates will be retained in the following proportions for this year:
Central Government - 50%
Harrogate Borough Council - 40%
North Yorkshire County Council - 9%
North Yorkshire Fire and Rescue - 1%
Under the scheme, we must pay a tariff to the LCR Business Rates Pool, which is based on the Government's assessment of how much income Harrogate needs to retain to fund its services. We will also make an additional contribution to the pool based on estimated growth in business rates.
The income ultimately retained by Harrogate is calculated as follows:
Total business rates collected is £63,106,640
Our initial 40% share is £25,242,660
Tariff payable to Central Government is -£21,843,650
Section 31 Grants from Government is £2,917,230
Levy to LCR pool is -£1,286,840
We retain: £5,029,400
What is a revaluation?
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 last revaluation was 1 April 2017.
The next revaluation will be 1 April 2023 and the VOA will contact businesses to request rental information. Providing rental information ensures the business rates you pay are accurate.
Many ratepayers will see only a small change in their rates bill at the revaluation. However, some properties will see a more significant change - both increases and reductions. Transitional arrangements are used to phase in these changes.
The transitional arrangements will support ratepayers by allowing them time to adjust to their new rates bills. Those ratepayers facing increases will see their bill capped each year at a set percentage increase due to the revaluation. The Government has stated that the transitional scheme must be self-financing and so ratepayers who would otherwise see a large decrease in liability will not get the full benefit immediately but will have the reduction capped at a set percentage.
Where transition is applicable it will be calculated automatically and be shown on your business rates bill.
How can I find out more?
For more information on the rateable values and business rates please go to www.gov.uk/introduction-to-business-rates.
You can also estimate your business rates bill, including any small business rate relief we may apply.