Do you run a business confined to a physical location? If you own a salon, clinic, barbershop, or office space, understanding business rates 2024 is crucial. Incorporating these rates into your budget from the start can make a big difference, especially when launching a new venture.

Overview of Business Rates

Business rates are also called non-domestic rates. The government levies these on non-domestic properties used for commercial purposes. Such properties include clinics, shops, stores, offices, pubs, warehouses, salons, etc. The rates are taxes that help the local authority offer services like education and healthcare in the neighbourhood. If a building is partially used for non-domestic purposes, these taxes may still be charged as business rates.

Who is liable to pay business rates, and who is exempted?

Any local or small business that owns or co-owns a non-domestic property must pay business rates. However, some properties are exempt. For instance, agricultural buildings like fish farms and places of worship are exempt. Buildings used for welfare services, such as training centers for disabled individuals, also qualify for exemptions.

If a building is meant for commercial purposes but is vacant, it may be exempt from business rates for a certain period. The exemption is extendable, depending on the type of property. 

How Business Rates Calculated?

The primary metric for calculating business rates is the property’s ‘rateable value,’ based on its value on the open market. The Valuation Office Agency (VOA) revalues rates once every five years. The last revaluation was effective April 1, 2023, and the rates are the same as those valid since April 1, 2021. 

Before April 1, 2023, when the latest revaluation was done, the government introduced a relief scheme under which caps bill increases due to readable value changes. The caps finalized concerning property sizes are as follows –

Property Size	% Cap
Small Properties	5%
Medium-sized Properties	15%
Larger Properties	30%

Additionally, the overall cap for bill increases was fixed at £600 per year, starting April 2023, for businesses no longer eligible for small business rate relief 2024/25 due to revaluation. 

To calculate your business rates, you simply need to multiply the property’s rateable value by the appropriate number, also called the multipliers or predetermined rates. The business rates multiplier depends on the property size and usage. It is associated with the Consumer Price Index (CPI). These multipliers are reviewed once every three years so that market changes can be reflected.

Business Rates Relief 2024-25

The government announced multiple business rate relief measures during the 2023 Autumn Statement to help struggling sectors.  

Beginning April 1, 2024

• The business rate multiplier 2024/25 for small businesses was frozen at 49.9p
• As per the inflation figure of 6.7% in September 2023, the standard multiplier was increased to 54.6p from 51.2p.
• Industries like leisure, hospitality, and retail will continue to get 75% business rate relief in 2024-25. The cash cap has been fixed at £110,000 per business

More details are available on the government website.

Small Business Rate Relief 2024/25

If the property of small businesses has a rateable value of less than £15,000 and the business is a single-property unit, then the business can claim small business rate relief in 2024/25. If the business is a multi-property unit, it can still apply for relief, provided the combined rateable value is less than £20,000 (for London properties, the value is £28,000). In such cases, the value of the second property cannot exceed £2,899. Additionally, businesses with a lower retable value than £51,000 can take advantage of the small business multiplier, irrespective of the relief eligibility of the business. 

Small businesses that operate from properties with a rateable value equal to or less than £12,000 can get complete relief. Between £12,001 and £15,000, the relief falls from 100% to 0%. A discretionary relief between 80% and 100% is extended to charitable businesses. Other business rate reliefs, like rural rate relief, are also available, details of which are available on the government site.

Business rates when working from home

If you work from home or use a small part of your residence for commercial purposes, you may not be required to pay business rates. Here are some conditions where you will need to pay business rates besides the Council Tax. 

• You own a shop that is located below your residence. You must pay business rates when a significant part of the property is used for business.
• Employees are working at the property.
• The sale of items is done to people visiting the property.
• Home improvements are done where a part is converted for running a business, like converting the garage to an office space.

If you need more details on the business rates for small business WHF, speak to experts at TaxCan Accountants

Paying Business Rates 2024

In different regions, business rates can be paid in different ways.

Business Rates in England

The business rates need to be paid to the local council. These need to be posted annually at any time between February and March. You can pay online. You can write to the local council for relief on business rates and disputes.

Business Rates In Wales

For example, in England, local councils issue bills annually. The business multiplier and partial discount have been frozen for the 2023-24 tax year.

Scotland Business Rates 

Different calculations are used according to the Scottish model. Properties valued below £35,000 are relieved, and those under £15,000 are also exempted. 

Northern Ireland Business Rates

The business rate system differs for all businesses but especially for home-based businesses. Even modest setups may need to pay business rates.

You can use the online VOA business rates checker to check the rateable value of your property. 

Do You Have Still Have Doubts for the Business Rates 2024/25 for small businesses? Speak to Professional Assistance!

Navigating business rates can be complex, but understanding them is vital for small business success. For professional assistance in managing business rates and other financial matters, trust the experts at TaxCan Accountants and Cangaf Ltd. They’ll help you seamlessly integrate these costs into your budget, ensuring your business thrives.