Business Rates Explained

Why pay Business Rates?

Non-domestic rates or Business Rates, collected by local authorities, are the way that those who occupy non-domestic properties contribute towards the costs of the local services.

If your property is used for both domestic and non-domestic purposes, part of it will be assessed for Business Rates and the other part for Council Tax, for example, a public house.

Historically, the money collected from business rates has been paid to Central Government who would pool the money and then redistribute amongst local authorities.

However, since 2013, under the 'business rates retention' arrangements, authorities can keep a proportion of the business rates paid locally.

The money, together with revenue from council taxpayers, revenue support grants provided by the Government, and certain other sums, is used to pay for the services provided by the local authority.

Who is liable to pay?

The occupier of a non-domestic property normally pays business rates. This can be one person or a company. This could be an owner-occupier, a leaseholder, a sub-lessee, a tenant or a subtenant. It doesn't matter whether the occupation of the premises is subject to a proper legal agreement or not.

If you lease a property from a landlord, but keep it empty, you are still liable for empty rates. This is because the lease entitles you, rather than your landlord, to occupy the property.

You find more information about Business Rates on the Gov UK website.