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(NNDR), often called Business Rates, was introduced on 1st April 1990. Business Rates is a form of taxation levied on the occupier of commercial premises. It is collected by the local authority on behalf of the government.
Business Rates are payable on every property that has an entry in the Rating List. The Rating List is compiled every five years by the Valuation Office Agency (VOA). It gives details of every commercial property in England and Wales. There is a similar document for properties in Scotland called the Valuation Roll, which is compiled by the Assessors Office. The entry includes the address, the description and the Rateable Value (RV) of the property. The VOA or Assessors Office has a duty to maintain an accurate list and will make alterations to the list - new entries, deletions, changes to the Rateable Value - whenever necessary.
The basic principle of non-domestic rates is that the amount payable per year is the Rateable Value multiplied by the National Non Domestic Rating Multiplier or Uniform Business Rate (UBR). However, rate liability is not always that simple. This is because of Transitional Arrangements.
Revaluation can result in a large increase in a property's Rateable Value. To avoid this resulting in an excessive increase in the ratepayers' liability there are rules that set out the maximum amount they will be required to pay. These rules are called Transitional Arrangements, sometimes known as Transitional Relief or Transitional Phasing. If revaluation results in an excessive increase in the amount you have to pay, you will receive transitional relief to reduce your bill to a more reasonable level.
To make the transitional scheme self-financing, some ratepayers are required to pay an additional amount. This is known as a transitional surcharge or transitional premium. The premium is paid by businesses whose liability has reduced due to revaluation. These Ratepayers will still pay less than they paid previously, but the reduction is subject to a lower limit.
The ratepayer has a right to challenge an entry in the rating list. Whether it is the new value brought about by revaluation or a value set by the valuation officer because of a material change in the property or the locality, or even if the ratepayer just feels that his or her business is being adversely affected by something nearby - road works for instance - the ratepayer can appeal against the rateable value provided that the appeal is submitted within appropriate time limits.
The ratepayer or their agent attempts to secure a reduction in the Rateable Value because the RV has an impact on the Rate Liability. The RV however is not the only factor affecting rate liability, which is why it is advisable to instruct a rating surveyor to act on your behalf.
Non-Domestic Properties in England, Scotland and Wales are normally revalued every 3 years. The most recent revaluation came into effect on 1st April 2023. The revaluation is based on rental values at a specific date (the "antecedent valuation date" or AVD) two years before the revaluation applies. Hence the 2023 revaluation was based on rental values at 1st April 2021.
A new appeals system which took effect in England from 1st April 2017. This reform of the business rates appeal system was aimed at reducing the vast number of speculative appeals and also to allow factual and valuation issues to be dealt with in a timely and efficient way.
The ‘Check’ stage, through which the ratepayer/agent and the Valuation Office Agency agree (and if necessary correct) the key factual information about the property.
The ‘Challenge’ stage through which a ratepayer or their agent may make a challenge to the VOA’s valuation and submit and discuss any relevant evidence.
The ‘Appeal’ stage: the ratepayer can appeal to the Valuation Tribunal for England (VTE) if no agreement has been reached.