Business rates are levied on business properties. They are payable by any businesses that use non-domestic properties, such as office space. Other organisations, such as some charities, are also liable for business rates. Business rates could be thought of as the equivalent of Council Tax; they are contributions made by businesses in particular areas to the cost of services provided by the council and local authorities.
If you're self-employed and working from home, you may also need to consider other tax obligations using our free HMRC Red Flag Checker.
Business rates, like council tax, are calculated by looking at the rateable value of a property. This is then multiplied by a figure set by the government to determine the actual amount payable. Properties are valued every three years by the Valuation Office Agency (VOA).
Will I Have to Pay Business Rates?
If you occupy non-domestic premises, you are likely to have to pay business rates. Non-domestic, or business properties, include office space, warehouses, shops and pubs. Some buildings and areas, such as public parks or places of public worship, do not count as business premises and are therefore exempt from business rates.
If part of the building is used for work and part is a domestic dwelling, you will have to pay rates on the area that is used for business purposes. As such, if you work from home, you may have to pay business rates for the area of your house that you use for your business. It should be noted that decisions about business rates for home workers are left to the local council; it is quite rare that rates are charged in these circumstances, but if you use a large area of your house for work you should be prepared to pay.
It is worth remembering that many business owners actually have their rates included in the rent they pay their landlord. If this is the case for you, you will not need to worry about paying your rates separately.
Find out which areas of your finances HMRC is most likely to query, what you should be declaring, and roughly what you may owe.
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How Much Will I Have to Pay?
The amount you have to pay in business rates depends on the rateable value of your property and the multiplier set by the government. The multiplier changes as often as once a year, but the rateable value will only change once every five years. The multiplier refers to the percentage, or pence in the pound, of ratebale value that you will pay in business rates. From April 2026, there are five business rates multipliers: small business RHL (38.2p), small business non-RHL (43.2p), standard RHL (43.0p), standard non-RHL (48.0p), and large property (50.8p) for properties with rateable values of £500,000 and above. The rateable value is determined by factors like the size of the property and the business tasks for which they are used. For more infomation about how business rates are calculated visit www.gov.uk/find-business-rates
You will receive a bill each March showing how much you have to pay, but you can check the rateable value of your property at any time on the VOA website. Rates are usually paid in 10 or 12 monthly instalments, much like council tax.
It is important that you keep up with your business rate payments. Failure to do so will result in financial penalties and, if you continue non-payment, you are likely to end up in court. If you are having difficulty paying your business rates, you should contact your council as soon as possible. You may also wish to read our article on business rate relief.
Size-wise, we'd be considering an ex-business workshop premises, with a rateable value of less then £10k.
As non-business, non domestic, would rates be considered as business rates, which, with this RV, would be 0% of the £10k, or are non-business premises for personal private use only, subject to full rates?
Thanks
B.
The rateable value for the whole building is £10.200. With the business area just 38% of the whole total area. The separate entrance to the accommodation, the stairs and storage area, plus the lounge, bedroom, kitchen and bathroom take up the rest of the total area and amount to 62% for which I pay council tax.
Therefore should I have to pay business rates on the business area, which as mentioned takes up only 38% of the total properties valuation. Which as a percentage of the total valuation amounts to only £3876 pounds.
Your comments or help will be very welcome.
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