Department of the Environment, Transport and the Regions
A Guide to the Revaluation of Business Rates
The Government has reviewed and updated the rateable values of all non-domestic properties. This is known as a revaluation. The new rateable values will come into effect on 1 April 2000.
This leaflet explains:
- the background to the revaluation
- how you can find out what your new rateable value is
- how other factors, such as the national poundage use to calculate the bill, and reduction schemes such as transitional relief can affect the amount you actually have to pay.
Your rateable value will probably change on 1 April 2000, but it is not your rates bill. The amount you pay may go up or down. To find out how much you can use the tables at the end of this leaflet.
What is a revaluation?
With a few specific exceptions, each non-domestic property has a rateable value (RV) which is based on the market rent it would be expected to command. A revaluation is carried out every five years so that the values in the rating list can be kept up to date. The total rates collected in England will not change except to reflect inflation, but the revaluation ensures that this is spread fairly between ratepayers.
The revaluation is carried out by an independent Government agency - the Valuation Office (VOA)
When will it happen?
New rateable values have already been assessed for all properties and have been published in the rating lists. The new values are based on rental values as they stood on 1 April 1998, but will only affect bills from 1 April 2000.
How much will I have to pay?
Your local authority will calculate you rates bill by multiplying your rateable value by the multiplier or "poundage" set each year by the Government. For 2000/01 the multiplier is 41.6p. So, for example, if your rateable value is £10,000, the local authority will multiply this by 41.6p and your bill for the year would be £4160. This may be the amount you have to pay, but it could be changed by any transitional or other reliefs that you may be entitled to.
What does this mean for me?
Your new rates bill in 2000/01 will depend on the following factors.
- your annual rates bill for 1999/2000
- your new rateable value
- where your business is located -in London or elsewhere (for some only)
- the level of inflation (1.1% for 2000/01 based on the Retail Price Index in September 1999).
Why have transitional relief and what is it?
The property market has changed a good deal between the 1995 and 2000 revaluations. Transitional relief is a scheme for phasing in the effects of this change on ratepayers' bills.
As a guide, individual rates bills will not go up in 2000/01 because of the revaluation by more than 12.5% percent, before allowing for inflation, or down by more than 5%, again before inflation. Many will change by less than these amounts and the actual amounts you have to pay will depend on a number of factors which are described more fully in the next section.
Limits will also apply to increases and decreases in the following years over the life of the scheme until you are paying the full new amount (the equivalent of rateable value times the multiplier).
How are increases limited by transitional relief?
Your new bill will be based on your new rateable value times the multiplier (41.6p in 2000/01). However, if this means the amount you have to pay goes up, and the new amount would exceed the limits given in the table below, you will qualify for transitional relief. The following table shows the maximum increase each year over the life of the scheme (before allowing for inflation):
| Year | Small property (New RV less than £12,000 or £18,000 in Greater London) |
Large property (all others) |
| 2000/01 2001/02 2002/03 2003/04 2004/05 |
5% 7.5% 7.5% 7.5% 7.5% |
12.5% 15% 17.5% 17.5% 17.5% |
This sounds complicated. But don't worry, as it is pretty easy to work out. An example is given below and you might want to estimate your own new bill in the space provided at the back of this leaflet.
Lets take an example of a shop outside London where the annual rates bill for 1999/00 is £2000 (i.e. old rateable value of £4090 times the multiplier of 48.9p). Without transitional relief the new bill from 1 April 2000 might be £2200 (based on a new rateable value of £5289 times the multiplier of 41.6p). However, transitional relief means that the maximum amount payable in 2000/01 will be just £2123.10.
Here's how it works:
| Annual bill 1999/2000 | £2,000.00 |
| Plus Maximum increase of 5% rateable value less than £12,000 outside London |
£100.00 |
| Sub total | £2,100.00 |
| Plus inflation (1.1%) | £23.10 |
| New bill | £2,123.10 |
And reductions?
Again your new bill will be based on your new rateable value times the multiplier (41.6p in 2000/01). However, if this means the amount you have to pay goes down, and the reduction would exceed the limits given in the table below, the reduction will be limited. The following table shows the maximum reduction each year over the life of the scheme (before allowing for inflation):
| Year | Small property (New RV less than £12,000 or £18,000 in Greater London) |
Large property (all others) |
| 2000/01 2001/02 2002/03 2003/04 2004/05 |
5% 5% 10% 12.5% 25% |
2.5% 2.5% 5% 7.5% 15% |
And the effect on bills?
Lets take another example, this time of a larger property in London where the annual rates bill was £20,000 in 1999/00 (i.e. old rateable value of £40,900 times the multiplier of 48.9p). Without the effects of the transitional relief scheme the new bill might be £19,000 in 2000/01 (based on a new rateable value of £45,673 times the multiplier of 41.6p). However, transitional relief means that the minimum amount payable in 2000/01 will be £19714.50.
Here's how it works:
| Annual bill 1999/2000 | £20,000.00 |
| Less Maximum reduction of 2.5% rateable value greater than £18,000 in Gtr London |
£500.00 |
| Sub total | £19,500.00 |
| Plus inflation (1.1%) | £214.50 |
| New bill | £19,714.50 |
You can use the tables on pages 10 & 11 to calculate an estimate of your new bill for 2000/01.
What happens in subsequent years?
Increases and reductions in the years after 2000/01 will be limited to the percentages shown in the tables, plus inflation, until you are paying the full amount. However, we cannot give examples of the effects in these years as this will depend on the rate of inflation in the years to come.
When will I know what my new rateable value is?
Your local authority will send you your new rateable value with your rates bill for 2000/01in March or early April.
If you want to find out what it is earlier than that, you can do so from any of the following:
- On the internet at the Valuation Office Agency's website. The address is: http://www.voa.gov.uk (If you do not have access to the internet yourself, you should be able to use facilities at your local library.)
- Your Valuation Officer by telephoning 0845 6021507. This line will be available 9am - 5pm until 30 June 2000. All calls will charged at the local rate
- The business rates department at your local authority.
- Your rating advisor if you have one (please see page 9 for advice on appointing a rating advisor)
No one's been to see me so how can they re-value my property?
Valuation Officers will already have most of the information they need to carry out the revaluation - either from earlier valuations or from the Form of Return that a selection of ratepayers were asked to complete. Most of the work is based on how the property market has moved since the last revaluation, so individual visits are not normally necessary.
What if I think my rateable value is wrong? How can I appeal?
If you think your new rateable value is wrong, you will be able to make an appeal to alter it from 1 April 2000. You should do so as soon as possible after that date if you think this is necessary, and not later than 30 September 2000. If you appeal later, any reduction in your bill may not be backdated to 1 April 2000. Appeals are heard by independent Valuation Tribunals.
A separate leaflet explaining this process and the introduction of a structured programme to consider appeals, will be available from March 2000.
Will my transitional relief be affected if I appeal?
If your bill is affected by transitional arrangements, you may find that a change in rateable value following an appeal makes no difference to the amount you pay until a later year. This is because the change may not result in a lower bill than you are already paying as a result of the transitional scheme.
However, if your rateable value is reduced because of alterations to your property or in the local area after 1 April 2000, your bill should be reduced in the same proportion. If it increases, your bill will go up to reflect the full value of the increase in your rateable value (i.e. the difference between your new rateable value and the one it replaces).
What other types of relief are available?
Further relief may be available if:
- You are suffering hardship - this is normally limited to businesses regarded as particularly important to the local community.
- Your property is empty and unused. These properties normally attract no rates bill for the first three months, and 50% of the normal bill after that.
- Your organisation is a charity or another non-profit making body. Charities are automatically entitled to an 80 per cent reduction in their bill, and councils have discretion to reduce the bill further. Councils also have discretion to grant relief of up to 100 per cent to certain other types of non-profit making bodies.
- Your business is in a designated rural area. You may qualify for a reduction in your rates bill if your business is situated in a designated rural area, for example if it is the sole village general store or post office.
If you think you may qualify to be considered for any of these types of relief, you should contact the business rates department at your local council.
Where does my money go?
Many people believe that business rates are automatically spent by the local council that collects them. In fact, the money is paid into a national pool and then distributed back to local councils according to the number of people living in their areas.
Contact numbers and addresses
Valuation
For further advice about the valuation of your property or how to appeal, you should contact your Valuation Officer by telephoning 0845 6021507. This line will be available 9am - 5pm until 30 June 2000. All calls will be charged at the local rate.
Alternatively, you may wish to contact a rating advisor. Members of the Royal Institution of Chartered Surveyors (RICS), the Incorporated Society of Valuers and Auctioneers (ISVA) and the Institute of Revenues Rating and Valuation (IRRV), are regulated by rules of professional conduct designed to protect the public from misconduct, and are required to hold adequate professional indemnity insurance.
Before employing a rating advisor who is not a member of one of these bodies, you should satisfy yourself that he or she has the necessary knowledge and expertise, as well as appropriate indemnity insurance.
Other issues
Enquiries about any other aspect of your bill, including the effect of the transitional scheme on the amount you have to pay, should be addressed to your local council.
Table 1 - Is your bill going up or down?
If you know your new rateable value you can make an estimate of your bill in 2000/01. First use this table to work out whether your bill will be going up or down.
| 1 Annual bill in 1999/2000 | £_________ |
| 2 New annual bill on 1/4/2000 before transitional relief (your rateable value times 0.416) | £_________ |
If your new bill is higher than the old one, you can use table 2 to estimate the maximum amount you will have to pay under the transitional relief scheme in 2000/01. If it is lower, use table 3.
Your local authority will advise you of the actual amount you have to pay when they send you your new bill.
Table 2 - Estimating your new bill-increases.
If your bill is going up, you can use this table to make an estimate of your new bill
| 3 Annual bill in 1999/2000 | £_________ |
| 4 Plus maximum increase of 5% (property with Rateable value less than £12,000 or less than £18,000 in Gtr London) (Step 3) times 0.05 or Plus Maximum increase of 12.5% (all other properties) (Step 3) times 0.125 |
£_________ |
| 5 Sub total (Step 3) plus (Step 4) |
£_________ |
| 6 Plus inflation (1.1%) (Step 5) times 0.011 |
£_________ |
| 7 New bill maximum on 1/4/2000 (Step 5) plus (Step 6) |
£_________ |
| 8 New bill is LOWER of Step 2 or Step 7 | £_________ |
Table 3 - Estimating your new bill-reductions.
If your bill is going down, you can use this table to make an estimate of your new bill
| 3 Annual bill in 1999/2000 | £_________ |
| 4 Less maximum reduction of 5% (property with Rateable value less than £12,000 or less than £18,000 in Gtr London) (Step 3) times 0.05 or Less Maximum reduction of 2.5% (all other properties) (Step 3) times 0.025 |
£_________ |
| 5 Sub total (Step 3) plus (Step 4) |
£_________ |
| 6 Plus inflation (1.1%) (Step 5) times 0.011 |
£_________ |
| 7 New bill maximum on 1/4/2000 (Step 5) plus (Step 6) |
£_________ |
| 8 New bill is HIGHER of Step 2 or Step 7 | £_________ |