Business

Business rates explanatory notes

Non-domestic rates

The non-domestic rates, or business rates, collected by local councils are the means by which businesses and other organisations that occupy non-domestic property contribute to the cost of local services. Except in the City of London, where special arrangements apply, the rates are pooled by central government and redistributed to local councils according to the number of people living in the area. This 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 your local council and other local authorities in your area. Further information may be found on the Government sponsored website, www.businesslink.gov.uk (see associated links).

Rateable value

Apart from properties that are exempt from business rates, each non-domestic property has a rateable value that is normally set by the valuation officers of the VOA, part of the Inland Revenue. It draws up and maintains a full list of all rateable values, which is available on its website, www.voa.gov.uk (see associated links). The rateable value of your property will be shown on the front of your bill. The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date. For the revaluation that came into effect on 1 April 2005, this date was set as 1 April 2003.

The valuation officer has to maintain the list and may alter the value if he or she believes that the circumstances of the property have changed. The ratepayer (and certain others who have an interest in the property) can also appeal against the value shown in the list if they believe it is wrong. Further information on the grounds for making an appeal, and on how to make one, can be found on the VOA website, www.voa.gov.uk (see associated links) or from the Valuation Office, VOA, Bromley Office, Unicorn House, 28 Elmfield Road, Bromley, Kent, BR1 1LR. Telephone 020 8315 2800.

National non-domestic rating multipliers

In line with the Local Government Act 2003, from 1 April 2005 there have been two multipliers: the Standard Non-domestic Rating Multiplier and the Small Business Non-domestic Rating Multiplier. The former is higher, to pay for small business rate relief. The Government normally changes both multipliers every year in line with inflation. By law, the multipliers cannot go up by more than the rate of inflation, apart from some minor adjustments to counteract losses from appeals and, in relation to the standard multiplier, to pay for small business rate relief. In the year of a revaluation they are set at a level which will keep the total amount raised in rates after the revaluation the same as before, plus inflation for that year.

Transitional arrangements

Property values normally change a good deal between each revaluation. Transitional arrangements help to phase in the effects of these changes by limiting the amount by which a bill may rise following a revaluation. To help pay for these limits on increases, there also have to be limits on reductions in bills. Under the transition scheme, limits continue to apply to yearly increases and decreases until the full amount is due (rateable value times the multiplier).

The scheme applies only to the bill based on a property at the time of the revaluation. If there are any changes to the property after the revaluation date, transitional arrangements will not normally apply to the part of a bill that applies to any increase in rateable value due to those changes. Further information about transitional arrangements may be obtained from Croydon Council or may be found on the Government sponsored website, www.businesslink.gov.uk (see associated links).

Any transitional adjustments will be shown on the front of the bill.

Unoccupied property rating

Until 31 March 2008 there will be no business rates to pay for the first three months that a property is empty. After that, an empty property rate of 50% of the bill that would have been due on the occupied property will be payable. Industrial buildings, listed buildings and small properties with rateable values of less than £2,200 pay no empty property rates even after the first three months have expired.

From 1 April 2008 the law will change.  There will be no business rates to pay for the first three months that a property is empty.  For certain industrial property, this period extends to six months.  After that, most empty property will be liable for 100% of the basic occupied business rate.  If the three or six month empty period has already been granted, you will have to pay full business rates from 1 April 2008. 

Some properties, however, will remain exempt on other grounds and there are special rules for properties used by a charity.  For more details about these, contact the Business Rates section.

Charitable and registered community amateur sports club relief

Charities and registered community amateur sports clubs are entitled to 80% relief where the property is occupied by the charity or club and is wholly or mainly used for charitable purposes or as a registered community amateur sports club. The local authority has discretion to give further relief on the remaining bill.

Rating advisers

Ratepayers do not have to be represented in discussions about their rateable value or their rates bill. Appeals against rateable values can be made free of charge. However, ratepayers who wish to be represented should be aware that members of the Royal Institution of Chartered Surveyors and the Institute of Revenues Rating and Valuation are qualified and are regulated by rules of professional conduct designed to protect the public from misconduct. Before you employ a rating adviser, you should check that they have the necessary knowledge and expertise as well as appropriate indemnity insurance. Take great care and, if necessary, seek further advice before entering into any contract.

Payment of the national non-domestic rate

This is normally by ten monthly instalments from April to January, but can also be paid annually in advance in April or by two instalments, one in April and one in September. The council strongly recommends payment by direct debit as it is the most efficient and secure method of payment and is guaranteed by the bank or building society. If you would like to pay your business rate by direct debit, you can download the form below, print it off, fill it in and send it to the address printed on the form. If you have any queries about payments please contact the Business Rates Section direct.

Contact Details

Contact name

Business Rates Section

Department

Finance

Telephone

020 8667 8385

Fax

020 8667 8440

Email

croynndr@croydon.gov.uk

Address

Business Rates Section, Croydon Council, Municipal Offices, Fell Road, Croydon, CR9 1QA