How Business Rates Are Calculated
Business rates are a tax on non-domestic properties in England and Wales. The calculation is straightforward:
Business Rates Liability = Rateable Value × Multiplier
What is Rateable Value?
The rateable value is an assessment of the annual rent the property would achieve if it were available to let on the open market at a specific valuation date. The Valuation Office Agency (VOA) is responsible for setting rateable values.
England and London Multipliers
- Small businesses (Rateable Value < £51,000): 49.9p (£0.499)
- Standard businesses: 55.5p (£0.555)
- Small businesses (Rateable Value < £51,000): 49.9p (£0.499)
- Standard businesses: 54.6p (£0.546)
- Small businesses (Rateable Value < £51,000): 49.1p (£0.491)
- Standard businesses: 51.2p (£0.512)
City of London Multipliers
The City of London Corporation applies a premium on top of the standard England multipliers to fund additional services such as security, policing, and cleansing that benefit businesses in the Square Mile.
- Small businesses (Rateable Value < £51,000): 51.9p (£0.519)
- (49.9p + 2.0p premium)
- Standard businesses: 57.7p (£0.577)
- (55.5p + 2.2p premium)
City of London Premium
The City of London Corporation applies a premium on top of the standard England business rates multipliers to fund additional services in the Square Mile.
- Small Business Premium: 2.0p in the pound (added to the 49.9p small business multiplier)
- Standard Business Premium: 2.2p in the pound (added to the 55.5p standard business multiplier)
- Purpose: To fund enhanced security, policing, cleansing and other services that benefit City businesses
This premium applies to all properties in the City of London, regardless of rateable value.
Wales Multipliers
In Wales, since 2024-25, business rates are set by the Welsh Government using a single uniform business rates multiplier for all businesses, regardless of their rateable value.
- Uniform multiplier: 56.8p (£0.568)
- Uniform multiplier: 56.2p (£0.562)
- Small businesses (RV < £51,000): 50.2p (£0.502)
- Standard businesses: 52.0p (£0.520)
Transitional Relief Schemes
England and London Transitional Relief
Transitional Relief protects businesses in England and London from significant changes in their business rates bills following a revaluation. For the 2023 to 2024-25 transition:
| Direction of Change |
Cap |
Example |
| Increase in bill |
Maximum 15% increase |
If your bill would increase from £10,000 to £13,000 (30% increase), transitional relief would cap it at £11,500 |
| Decrease in bill |
Maximum 10% decrease |
If your bill would decrease from £10,000 to £7,000 (30% decrease), transitional relief would limit it to £9,000 for the first year. The full decrease will be phased in over time. |
In England and London, Transitional Relief works in both directions - it protects businesses from large increases but also phases in decreases gradually.
Supporting Small Business Relief (SSBR)
Supporting Small Business Relief (SSBR) helps small businesses that have lost some or all Small Business Rate Relief (SBRR) or Rural Rate Relief as a result of the 2023 revaluation.
| Eligibility |
Relief Details |
How It Works |
| Businesses that were in receipt of Small Business Rate Relief or Rural Rate Relief on 31 March 2023, and lost that relief due to the 2023 revaluation |
Limits increases in bills to no more than £600 per year (or the matching cap in the Transitional Relief scheme if that's lower) |
Helps businesses transition to their full rates liability gradually over time, rather than in a single large jump |
Supporting Small Business Relief is applied automatically by your local council if you're eligible. The relief will continue until your bill reaches the level it would have been without the relief.
Wales Transitional Relief Scheme
The Welsh Government's Transitional Relief Scheme limits increases in business rates bills following the 2023 revaluation. Unlike the English scheme, it only applies to properties with increasing bills and does not phase in decreases.
| Year |
Percentage of Additional Liability Paid |
Example |
| 2023-24 |
33% |
If your bill would increase from £10,000 to £13,000 (a £3,000 increase), you would pay only £10,990 (£10,000 + 33% of £3,000) |
| 2024-25 |
66% |
If your bill would increase from £10,000 to £13,000 (a £3,000 increase), you would pay £11,980 (£10,000 + 66% of £3,000) |
| 2025-26 |
100% |
Full bill is payable (£13,000 in this example) |
The Welsh transitional relief scheme was announced as part of the Welsh Government Draft Budget for 2023-24 and only applies to properties facing bill increases.
Small Business Rate Relief (SBRR)
Small Business Rate Relief can significantly reduce or eliminate business rates for eligible properties:
England and London SBRR
- 100% relief for properties with rateable value ≤ £12,000
- Tapered relief for properties with rateable value between £12,001 and £15,000
- No relief for properties with rateable value above £15,000
The tapered relief gradually decreases from 100% to 0% as the rateable value increases from £12,001 to £15,000.
Wales SBRR
- 100% relief for properties with rateable value ≤ £6,000
- Tapered relief for properties with rateable value between £6,001 and £12,000
- No relief for properties with rateable value above £12,000
- Maximum of two properties per business in each local authority
The tapered relief gradually decreases from 100% to 0% as the rateable value increases from £6,001 to £12,000. Relief is limited to a maximum of two properties per business within each local authority area.
London Crossrail Business Rate Supplement (BRS)
The London Crossrail Business Rate Supplement (BRS) is an additional levy on business rates that applies to properties in Greater London and the City of London with a rateable value over £70,000.
- Rate: 2p in the pound (2%)
- Threshold: Only applies to properties with rateable value over £70,000
- Purpose: To help fund the Crossrail/Elizabeth Line project
- Applicability: Applies to both Greater London and City of London properties
The supplement is calculated as 2% of the rateable value and is added to the final business rates bill.
Sector-Specific Relief
Retail, Hospitality and Leisure (RHL) Relief
Properties used for retail, hospitality, and leisure purposes can receive significant relief:
- 75% relief on business rates for eligible properties
- Cap: £110,000 per business
- Includes shops, restaurants, cafes, pubs, hotels, cinemas, music venues, etc.
- 40% relief on business rates for eligible properties
- Cap: £110,000 per business
- Similar eligibility criteria to England scheme
- Applies for 2024-25 and 2025-26 financial years
Charitable Rate Relief
Registered charities and community amateur sports clubs can receive:
- 80% mandatory relief on business rates
- Additional 20% discretionary relief may be granted by the local authority
Rural Rate Relief
In rural areas with a population below 3,000, certain businesses can receive 100% relief:
- The only village shop or post office with a rateable value up to £8,500
- The only public house or petrol station with a rateable value up to £12,500
Local Newspaper Relief
A specific relief is available for local newspaper offices:
- Relief amount: Up to £1,500 per year for 5 years from 1 April 2020 to 31 March 2025
- Eligibility: Office space used by local newspapers (circulation primarily in the local authority area and published at least once a week)
- Property limit: One property per local newspaper title in each local authority area
- How to apply: Contact your local council to apply for this relief
This relief is designed to help local newspapers adapt to the changing media landscape and maintain their role in local communities. It was initially introduced in 2017 for 5 years and has been extended to March 2025.
Empty Property Relief
You don't have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates.
| Property Type |
Relief Period |
Notes |
| Standard commercial property |
3 months |
100% relief for 3 months, then full rates payable |
| Industrial premises (factories, warehouses) |
6 months |
100% relief for 6 months, then full rates payable |
| Listed buildings |
Until occupied |
Exempt from business rates until occupied |
| Properties with rateable value under £2,900 |
Until occupied |
Exempt from business rates until occupied |
Important: Some properties are not eligible for empty property relief including:
- Empty properties where the owner is entitled to business rates relief
- Empty properties where the owner is a company in administration or liquidation
- Empty properties owned by public bodies or charities - full relief is available
The relief will reset if the property is occupied for at least 6 weeks. If you occupy a property for less than 6 weeks, you'll still have to pay full business rates when it becomes empty again.
Improvement Relief
Improvement Relief is a 12-month exemption from increases in business rates bills due to property improvements. This relief aims to encourage businesses to improve and expand their properties without immediately facing higher business rates.
What qualifies for Improvement Relief:
- Extensions or improvements to existing properties that increase the rateable value
- Improvements that maintain employment and increase economic activity in the area
- Relief applies to qualifying works completed between 1 April 2023 and 31 March 2027
Limitations:
- Relief only applies to the increase in business rates due to improvements - not your entire bill
- It's a temporary 12-month exemption after which the full rates become payable
- You need to apply through your local council and provide evidence of the improvements
Hardship Relief
Your local council may reduce your business rates bill if your business is experiencing hardship. This is known as 'hardship relief' and councils have discretion to grant this relief if they're satisfied that:
Eligibility criteria:
- You would suffer hardship if relief was not granted
- It's in the interests of local people for relief to be granted
There's no defined minimum or maximum amount of hardship relief that can be granted. The amount is at the discretion of your local council after evaluating your circumstances.
How to apply: Contact your local council's business rates department to request a hardship relief application form. You'll need to provide evidence of financial hardship and explain why granting relief would be in the interest of local residents.
This calculator provides estimates incorporating SBRR, Transitional Relief, the London Crossrail BRS, sector-specific reliefs, and multiple property rules. Other specialized reliefs such as Empty Property Relief, Improvement Relief, Local Newspaper Relief, and Hardship Relief are administered directly by your local council and require separate applications. For a complete assessment, consult your local council or a business rates specialist.