How are business rates calculated?

Business rates are calculated by multiplying the rateable value of your property by the business rates multiplier. For 2025/26 in England, the standard multiplier is 55.5p and the small business multiplier is 49.9p. For example, a property with a rateable value of £20,000 would have a basic bill of £20,000 × 0.499 = £9,980 per year (before any reliefs). The rateable value is set by the Valuation Office Agency (VOA) based on the estimated rental value of the property.

What is small business rate relief?

Small Business Rate Relief (SBRR) is available if your property has a rateable value of £15,000 or less. If the rateable value is £12,000 or below, you get 100% relief (no business rates to pay). Between £12,001 and £15,000, relief is tapered. To qualify, the property must be your only business premises (or your main premises, with other premises all having rateable values below £2,900). You're automatically eligible but may need to apply to your local council.

Do I have to pay business rates if I work from home?

If you use a room in your home solely for business (i.e. it's not used for any domestic purpose), the council could in theory charge business rates on that part of your home. However, in practice, most people who work from home with a general-purpose room (e.g. a spare bedroom used as an office but also used for other things) don't pay business rates. If you've built a separate business unit or converted a garage exclusively for business use, you may need to pay business rates on that part.

Can I appeal my business rates?

Yes. If you think your property's rateable value is wrong, you can challenge it through the VOA's Check, Challenge, Appeal process. First, you check your valuation details are correct. Then you can formally challenge the valuation if you believe it's too high. If the challenge is rejected, you can appeal to the Valuation Tribunal. Common grounds include: comparable properties have lower values, the property has changed, or the local area has changed. The process is free but can take months.

Self-Employment Guides UK — Tax, Business Setup, and Running Your Own Business

Business Rates Explained — A Complete UK Guide

How business rates work in the UK, how your bill is calculated, reliefs and exemptions, how to appeal your rateable value, and key dates for 2025/26.

By PocketWise · 25 March 2026 · 4 min read

Self-employment tax and business information is based on current HMRC rules. This is not tax or accounting advice. Consider consulting a qualified accountant for your specific circumstances.

Business rates are a tax on commercial properties. If you run a business from shop, office, warehouse, or other premises, here’s what you need to know.

How Business Rates Work

Element	Detail
What they are	A tax on most non-domestic properties
Who pays	The occupier of the property (or owner if empty)
Who bills you	Your local council
Who sets the rateable value	The Valuation Office Agency (VOA) in England and Wales
How often revalued	Every 3 years (most recent: April 2023)
Next revaluation	April 2026
Billing period	1 April to 31 March each year

Calculating Your Bill

Business rates bill = Rateable value × Multiplier − Reliefs

Business Rates Multipliers (England)

Year	Standard multiplier	Small business multiplier
2023/24	51.2p	49.9p
2024/25	54.6p	49.9p
2025/26	55.5p	49.9p

Standard multiplier: For properties with rateable value of £51,000 or more
Small business multiplier: For properties with rateable value below £51,000

Calculation Examples

Property	Rateable value	Multiplier	Basic bill	After relief	Annual bill
Small shop	£8,000	49.9p	£3,992	100% SBRR	£0
Retail unit	£20,000	49.9p	£9,980	75% retail relief	£2,495
Office	£35,000	49.9p	£17,465	None	£17,465
Warehouse	£60,000	55.5p	£33,300	None	£33,300

Reliefs and Exemptions

Small Business Rate Relief

Rateable value	Relief
£12,000 or less	100% relief (no rates to pay)
£12,001–£15,000	Tapered relief (gradually reduces from 100% to 0%)
Over £15,000	Not eligible

Conditions: Must be your only (or main) business property. Other properties must have rateable values below £2,900.

Retail, Hospitality, and Leisure Relief (2025/26)

Detail	Information
Relief amount	75% off your business rates bill
Cap	£110,000 per business
Eligible properties	Shops, restaurants, cafés, pubs, hotels, B&Bs, cinemas, live music venues, gyms, and similar
Duration	Extended annually — check current year availability

Other Reliefs

Relief	Who qualifies	Discount
Rural rate relief	Only village shop, post office, pub, or petrol station in a rural area	50–100%
Charitable rate relief	Registered charities using property for charitable purposes	80% mandatory + up to 20% discretionary
Community amateur sports clubs	Registered CASCs	80% mandatory
Empty property relief	Newly empty properties	3 months rates-free (6 months for industrial)
Hardship relief	In financial difficulties	Discretionary (up to 100%)
Enterprise zone relief	Properties in designated enterprise zones	Up to 100% for 5 years
Transitional relief	Limits increases after revaluation	Caps annual increases at set percentages
Supporting small business scheme	Lost SBRR at 2023 revaluation	Caps annual increases

Empty Properties

Situation	What happens
Property just became empty	3 months rate-free (standard), 6 months for industrial properties
After the initial period	Full rates payable on empty property
Exempt empty properties	Listed buildings, properties with rateable value under £2,900, properties where occupation is prohibited by law

How to Find Your Rateable Value

Method	Detail
Online	Search at gov.uk/correct-your-business-rates (VOA)
On your bill	Listed on your rates demand notice from the council
Call VOA	03000 501 501

Challenging Your Rateable Value

The Check, Challenge, Appeal process:

Stage	What you do	Timeframe
1. Check	Register on the VOA portal, check your property details are correct	You can do this anytime
2. Challenge	Submit a formal challenge explaining why the rateable value is wrong	VOA has 18 months to respond
3. Appeal	If challenge rejected, appeal to the Valuation Tribunal	Free to submit

Grounds for Challenge

Reason	Example
Property details wrong	Floor area incorrect, wrong facilities listed
Comparable properties valued lower	Similar properties in the area have lower rateable values
Property has changed	Physical changes, demolition, renovation
Local area has changed	Major roadworks, reduced footfall, competition increased
Error in valuation	VOA used wrong rental evidence

Scotland and Wales

Scotland

Detail	Information
Who values properties	Scottish Assessors
Multiplier (poundage) 2025/26	49.8p (basic), 54.5p (intermediate), 55.9p (higher)
Small business bonus scheme	100% relief for rateable value up to £12,000
Revaluation	April 2023 (every 3 years)

Wales

Detail	Information
Who values properties	VOA (same as England)
Multiplier 2025/26	56.2p (standard), 49.9p (small business)
Small business relief	100% for rateable value up to £6,000; tapered to £12,000
Revaluation	April 2023 (every 3 years)

Business Rates vs Domestic Council Tax

Feature	Business rates	Council tax
Applies to	Non-domestic properties	Residential properties
Based on	Rateable value (estimated rental value)	Property band (based on 1991 values in England)
Set by	Government multiplier × VOA rateable value	Local council
Who pays	Business/occupier	Resident/tenant
Reliefs	SBRR, retail relief, charitable	Single person discount, CTR, student exemption