How commercial business rates work in England
Business rates are a local property tax charged on most non-domestic commercial properties in England, including offices, shops, restaurants, pubs, factories, and warehouses. Each property is assigned a rateable value (RV) by the Valuation Office Agency (VOA), representing the estimated open-market annual rental value of the property at a fixed valuation date.
Your local billing authority calculates your gross annual bill by multiplying your rateable value by the statutory multiplier set annually by HM Treasury. For properties with a rateable value under £51,000, the small business multiplier (49.9p for 2024-25, 2025-26, and 2026-27) applies. For properties with an RV of £51,000 or greater, the standard multiplier (54.6p) is charged.
Worked example of business rates calculation
Consider a retail shop with an open-market rateable value of £25,000.00 occupied as a sole commercial property. Because the rateable value is below £51,000.00, the small business multiplier of 49.9p (0.499) applies. The gross bill before discounts is £12,475.00 (£25,000.00 multiplied by 0.499).
Because the rateable value exceeds £15,000.00, Small Business Rate Relief does not apply. If the business is an eligible retail shop receiving the 40% Retail, Hospitality and Leisure relief, a discount of £4,990.00 is deducted from the bill. The final annual business rates liability is £7,485.00, payable in 10 statutory monthly instalments of £748.50 from April to January.
Small Business Rate Relief thresholds and taper
Small Business Rate Relief (SBRR) is the primary discount available to commercial tenants who occupy only one commercial property in England. If your property has a rateable value of £12,000 or less, you receive 100% relief, meaning you pay zero business rates.
For properties with a rateable value between £12,001 and £15,000, relief decreases on a sliding scale from 100% down to 0% linearly. For example, a property with an RV of £13,500 receives 50% relief on its bill.
Payment options and statutory instalments
Business rates are billed annually for the rating year beginning 1 April. Local councils issue annual rate demands divided into 10 equal monthly payments due between April and January.
By statutory right under the Local Government Finance Act, any ratepayer can request their local council to divide their annual bill across 12 monthly instalments to improve business cash flow.
To calculate your limited company taxable profits and Corporation Tax, use our UK corporation tax calculator.
For sole trader income and Class 4 National Insurance, explore the UK self-employed tax calculator.
Inputs for the business rates calculator
Rating year
The local government financial rating year running from 1 April to 31 March.
Rateable value (RV)
The official open-market rental valuation assigned to the property by the Valuation Office Agency (VOA).
Single business property in England
Select Yes if this is your only commercial property in England, which is required to qualify for Small Business Rate Relief.
Retail, hospitality or leisure business
Select Yes if your premises is a qualifying high street shop, restaurant, pub, bar, cafe, hotel, or gym.
Location within City of London
Properties located within the Square Mile pay an additional 1.4p City Premium on the rating multiplier.
CALCULATOR QUESTIONS
Business rates questions
What is the difference between the small business and standard multiplier?
In England, properties with a rateable value under £51,000 use the small business multiplier (49.9p), while properties with a rateable value of £51,000 or more use the standard multiplier (54.6p).
How do I qualify for 100% Small Business Rate Relief?
You qualify for 100% Small Business Rate Relief if you occupy only one commercial property in England and its rateable value is £12,000 or less.
Can I pay my business rates over 12 months instead of 10?
Yes. Councils issue bills over 10 instalments by default, but ratepayers have a legal right to request 12 monthly instalments by contacting their local billing authority.
How can I check or challenge my property rateable value?
You can view your rateable value and valuation breakdown on the official GOV.UK Find a Business Rates Valuation service. If you believe the valuation is inaccurate, you can submit a Check, Challenge, Appeal request to the VOA.
Do empty commercial properties pay business rates?
Most empty commercial buildings receive 100% relief for the first 3 months of vacancy (or 6 months for qualifying industrial and warehouse properties). After this initial exempt period, full business rates are payable.