Business rate changes 2023

Prices are rising around the world and shops and businesses are facing these costs head on. From 1 April 2023, many businesses will face new business rates bills too, following a revaluation which allocates new rateable values to commercial properties to reflect more recent market conditions.

In light of both of these, the government will be taking a number of steps to help ratepayers. These changes came into effect on 1 April 2023.

Freezing the business rates multiplier

Business rates bills are calculated by multiplying the rateable value of a property by either the small business multiplier or the standard multiplier and subtracting any relevant reliefs. Multipliers usually rise with Consumer Price Inflation (CPI) inflation, but freezing the business rates multiplier will keep the small business multiplier and standard multiplier at 49.9p and 51.2p respectively – rather than rising to 52.9p and 54.2p. This will mean that bills are 6% lower than without the freeze.

An extended and increased relief for retail, hospitality and leisure businesses

To support high street properties, the government is extending and increasing the Retail, Hospitality and Leisure relief scheme from 50% to 75% for 2023- 24, up to £110,000 per business. This is the most generous in year business rates relief in over 30 years, outside of Covid-19 support.

Reforming Transitional Relief

The transitional scheme supports ratepayers facing large increases in their business rates bills as a result of a revaluation, as well as capping how much a bill can reduce by. By abolishing downwards transitional caps, businesses who see a declining business rates bill as a result of the revaluation will benefit from the full decrease straight away.

Protection for small businesses

Those businesses who lose eligibility for either Small Business or Rural Rate Relief will benefit through a Supporting Small Business scheme where the increase in their bill will be capped at £600 per year for 3 years.

Frequently Asked Questions (England)

Revaluation

What is revaluation?

Revaluation is a review of the rateable values of all non-domestic properties in England and Wales carried out by the Valuation Office Agency (VOA). This normally happens every 3 years.

Business rates

How do you value a property?

The VOA values a property by its rateable value. Rateable values are the amount of rent a property could have been let for on a set valuation date. For the 2023 revaluation, that date was 1 April 2021.

How is my rateable value calculated?

In order to calculate the rateable value, the VOA analyses the rental property market to ensure that rateable values reflect the property market accurately.

What is the valuation date for revaluation 2023?

The AVD for revaluation 2023 is 1 April 2021.

Who decides on the valuation date?

The Government decide on the valuation date. They chose 1 April 2021 so that valuations would reflect the impact of COVID-19 on the property market.

How is my business rates bill calculated?

Business rates bills are calculated using a rateable value. Rateable values are based on how much rent a customer’s property could be let for, on a set date (1 April 2021 for Revaluation 2023).

When will I receive my business rates bill?

Customers will now be able to see the future rateable value for their property and get an estimate of what their business rates bill may be from 1 April 2023.

They can do this through the VOA’s Find a Business Rates Valuation Service on GOV.UK.

Who do I contact if my property has changed?

If a property has changed, for example its floor sizes are different, then customers can let the VOA know now using a Business Rates Valuation Account.

Who do I contact if my rateable value is too high?

If a customer believes their future rateable value is too high, they can get in touch with the VOA using a Business Rates Valuation Account. They can only do this after 1 April 2023, which is the point the future valuation legally takes effect and can be challenged.

Customers must continue to make payments of their business rates as normal. If they do overpay, they can request a refund from their local council.

Why do similar properties have different rateable values?

When calculating a rateable value, the VOA considers how much a property could be let for, on a set date. The rateable value of properties can vary for a number of reasons like size or location.

What business rates reliefs are available?

There are several types of business rates relief for customers. They can find further information on GOV.UK. They may need to contact their local council to check their eligibility for business rates relief.

Business rates reliefs are handled differently if their property is in Scotland, Wales and Northern Ireland.

What if I want to use an agent?

If a customer wants to authorise an agent to act on their behalf, then they can appoint one using a Business Rates Valuation Account.