Business rates are basically Council Tax for commercial properties. If you occupy a shop, office, warehouse, factory, or pub in England or Wales, you almost certainly pay them. And for many small businesses, they’re a significant cost. But here’s the thing: reliefs exist that could slash your bill to zero, and a surprising number of businesses don’t claim them.
How Business Rates Are Calculated
Your annual bill = Rateable Value × Multiplier (before reliefs).
The rateable value is set by the Valuation Office Agency (VOA) based on what the property could rent for on a specific date. The current list uses rental values from 1 April 2021 and came into effect in April 2023. A new revaluation based on 1 April 2024 is coming in 2026.
The multiplier is set annually by the government. For 2025/26:
- Standard: 55.5p in the pound (properties with rateable value over £51,000)
- Small business: 49.9p in the pound (rateable value at or under £51,000)
So a property with a rateable value of £20,000 has a base bill of £20,000 × 0.499 = £9,980/year before reliefs. That’s a lot of money for a small business.
Small Business Rate Relief (SBRR)
This is the big one. If your property has a rateable value of £12,000 or less and it’s your only business property, you get 100% relief. You pay nothing. Zero. Between £12,001 and £15,000, relief reduces on a sliding scale.
Even if you don’t get the full relief, having a rateable value under £51,000 means you benefit from the lower small business multiplier instead of the standard one. Always worth checking.
Other Reliefs Available
- Retail, Hospitality, and Leisure Relief: 40% off for 2025/26 (down from 75% last year), capped at £110,000 per business. If you run a shop, restaurant, pub, or hotel, apply for this.
- Rural Rate Relief: The only shop, post office, food store, or pub in a rural settlement? Up to 100% relief.
- Charitable Rate Relief: Charities and community sports clubs get mandatory 80%, with the council able to top up to 100%.
- Empty Property Relief: Newly empty properties are exempt for 3 months (6 months for industrial). After that, full rates apply.
- Hardship Relief: Councils have discretion to reduce bills where a business would genuinely struggle and its survival benefits the community.
Challenging Your Rateable Value
Think your rateable value is too high? You can challenge it through the VOA’s Check, Challenge, Appeal process. Start by checking what the VOA has on file about your property (sometimes the details are just wrong — floor area, for example). Then formally challenge if you disagree. Finally, appeal to the Valuation Tribunal if the challenge fails.
Common grounds: errors in the property description, comparable properties having lower values, or changes in the area. A rating surveyor can help and typically charges 10–15% of any savings they achieve — so if they save you nothing, you pay nothing.
Business Rates and Working from Home
If you use a room at home exclusively for business, your council could technically charge business rates on it. In practice, this almost never happens for a standard home office. Dedicated workshops, studios, or rooms with their own external entrance are more likely to get assessed. Don’t lose sleep over it unless you’ve built a full commercial unit in your garden.
Estimate Your Business Rates
Our free business rates calculator estimates your annual bill based on rateable value, location, and available reliefs. Worth checking — you might be paying more than you should.