If you're running a business and you occupy a non-domestic property, you've probably encountered the term business rates. But when your bill lands or you’re budgeting for a new space, it can all feel confusing. Don’t worry—this guide breaks it all down. We'll show you how to work out business rates step by step, explain what a rates multiplier is, and how it affects your costs.
Business rates, also known as non-domestic rates, are a tax charged on most commercial properties. These rates help fund local services. Think of them as the commercial equivalent of council tax. If you run a shop, office, warehouse, or any other small business property, you'll likely need to pay them.
Business rates are based on your property's rateable value. This is its estimated open market rental value on a specific date, assessed by the Valuation Office Agency (VOA). You can check your rateable value here.
The rates multiplier (or "poundage") is a figure set by the government each financial year. It’s used to calculate your bill. The multiplier reflects inflation and whether you qualify as a small business. For 2024-25, the standard multiplier is typically around 54.6p, but small businesses may get a lower rate.
If your property's rateable value is £20,000 and the multiplier is 0.546, your business rates would be:
£20,000 x 0.546 = £10,920
The non domestic rates multiplier applies to all non-domestic properties. It’s revised annually in line with inflation. A lower small business multiplier is available if you occupy one property or qualify for small business rate relief.
You can challenge your rateable value via the Check, Challenge, Appeal process on the government website.
There are several types of relief you might be eligible for, including:
The rateable value is not something you calculate yourself—it’s determined by the VOA. However, it’s based on the property's size, layout, usage, and local rental values. If you think it's incorrect, you can ask for a reassessment.
To work out your business rates, multiply your property’s rateable value by the non-domestic rates multiplier for the year. Then subtract any reliefs you’re eligible for. You can check your rateable value online and apply the current multiplier published by the government.
Yes, if you occupy or own a property used for non-domestic purposes. This includes shops, offices, factories, pubs, and more. If you work from home, you usually don’t need to pay unless part of your home is exclusively used for business.
The rates multiplier is key to calculating your bill. It changes every year and is published by the UK Government. Always check whether you’re eligible for the new business rate to benefit from a lower multiplier.
Understanding how to work out business rates gives you the confidence to manage one of your business’s largest expenses. Use official tools to check your rateable value, keep tabs on the latest multipliers, and always explore available reliefs. If you're unsure, speak with a professional or contact your local council.
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