What are business rates?

Definition of business rates

Business rates are what businesses pay on their offices and factories instead of council tax.

If you have a small business, you may be entitled to small business rate relief to reduce how much you have to pay for business rates.

To find out how much you may have to pay you can enter your business's postcode into this business rates tool from the Valuation Office Agency.

Business rates in England during the coronavirus crisis

A 100% business rates ‘holiday’ for eligible retail, hospitality and leisure properties in England was introduced in March 2020. In the Budget in March 2021, the Chancellor announced that this period of 100% relief will end on 30th June 2021.

From 1st July 2021 until 31st March 2022, a 66% discount on business rates will apply to eligible businesses in England. This relief will be capped at £2 million per business for properties that were required to close on 5th January and £105,000 for other eligible properties.

Disclaimer: The content included in this glossary is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this glossary. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.

Frequently Asked Questions

I work from home, do I have to pay business rates instead of (or as well as) council tax?

That depends on what your business does and what work you carry out at home. Visit the HMRC website for more information on whether or not your business is eligible for business rates.

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