Business rates

This note provides a brief guide to the system of non-domestic rating, better known as ‘business rates’.

Business rates are a property tax paid by occupants of non-domestic properties. The basic rates bill is determined by multiplying the rateable value of a property (a ‘hereditament’) by the ‘multiplier’. A property’s rateable value is set by the Valuation Office Agency in England and Wales; the Assessors in Scotland; and Land and Property Services in Northern Ireland.

Various reliefs, both mandatory and discretionary, are available from full business rates liability. Limited powers also exist for local authorities to set supplementary business rates. This note also gives details of the business rate-related grant schemes available as part of the Government’s response to the Covid-19 pandemic in 2020.

Business rates are devolved to Scotland, Wales and Northern Ireland. This note focuses on the operation of the business rates system in England.

Additional detail on the revaluation of business rates coming into effect on 1 April 2017 can be found in the Library briefing Business rates: the 2017 revaluation. Details of the Business Rate Retention Scheme, and proposals for its reform, can be found in the Library briefing paper Reviewing and reforming local government finance.