How will business rates change from April 2023?
From April 2023, there will be notable changes to business rates. Below we explain the changes and how they are calculated.
What are business rates and when will they change?
Business rates are a tax on property used for business purposes, whether it be working from a commercial property.
The Government levies the charge on offices, shops, pubs, and warehouses. In fact, most non-domestic properties will attract business rates. They may also be charged where only part of a building is used for non-domestic purposes.
The Valuation Office Agency (VOA) has updated the rateable values of all business, and other non-domestic, properties in England and Wales. They will take effect from 1 April 2023.
How are business rates calculated?
You will receive a business rates bill from your local council in February or March each year for the upcoming 12 months.
They will be based on the property’s ‘rateable value’, the estimated value on the open market.
The rateable value for your property is not what you pay in business rates or rent. Your council uses the rateable value to calculate your business rates bill. The Government has also announced a package of rates relief for businesses as part of the Autumn Statement 2022.
It says it has also pledged to reform the business rates system by delivering more frequent business rate revaluations.
What are the changes planned for business rates?
Business rate multipliers will be frozen from 2023-2024. The multiplier represents the number of pence in each pound of the rateable value that will be payable in business rates before any relief or discounts are applied.
A transitional relief scheme will cap bill increases caused by changes in rateable values at the 2023 revaluation.
For retail, hospitality, and leisure businesses, rates relief will be increased from 50 per cent to 75 per cent (up to £110,000 per business) in 2023-24.
The increases are capped at £600 per year from April 2023 if businesses lose their eligibility for small business rates relief as a result of the revaluation. The Government has a tool you can use to check the VOA’s rateable value for your property.
For expert advice on business rates and how the changes from April 2023 could affect you, contact us today.