Business rates are a significant expense for commercial property owners and occupiers in the UK. Understanding how they work can help you budget effectively, identify potential savings through reliefs, and avoid unexpected bills. With changes announced in recent budgets, including for 2025/26, using a business rates calculator UK tool is more valuable than ever for accurate forecasting.
This guide explains what are business rates UK, breaks down how to calculate business rates, and shows how a business rates calculator simplifies the process. Whether you’re running a small shop, a holiday let, or a larger enterprise, knowing your liabilities and potential reliefs like small business rates relief can make a real difference to your bottom line.
What Are Business Rates UK?
Business rates, officially known as non-domestic rates, are a tax on non-residential properties in the UK. They fund local services like roads, schools, and waste collection. Unlike council tax on homes, business rates are based on the property’s rental value rather than its size or location alone.
In England, the system is managed by local councils for billing and the Valuation Office Agency (VOA) for valuations. Rules differ slightly in Scotland, Wales, and Northern Ireland, but this guide focuses on England, where most queries about what are business rates UK originate.
As of 2025, many businesses face adjustments due to frozen multipliers for small properties and reduced reliefs for retail, hospitality, and leisure sectors. Accurate estimation using a small business rates calculator or general tool helps plan ahead.
What Is Rateable Value?
The foundation of business rates is the rateable value (RV) an estimate of the annual rent the property could achieve on the open market at a fixed valuation date.
The VOA sets the RV based on factors like size, location, condition, and market rents. The current rating list (effective from 1 April 2023) uses values as of 1 April 2021. The next revaluation, due in 2026, will use 1 April 2024 values, potentially shifting liabilities.
How Do I Find the Rateable Value of My Property?
It’s straightforward:
- Visit the VOA website at gov.uk/find-business-rates.
- Search by postcode or address.
- You’ll see the current RV and a summary of how it was calculated.
Create a business rates valuation account on the VOA website for detailed breakdowns or to report changes (e.g., renovations). This is essential for challenges or updates.
If you believe your RV is incorrect, follow the Check, Challenge, Appeal process on the VOA site. Note: Challenges to the current list must be made by 31 March 2026.
How to Calculate Business Rates
The basic formula for how to calculate business rates is simple:
Business Rates Bill = Rateable Value × Multiplier (minus any reliefs)
The multiplier (or “poundage”) is set annually by the government.
Multipliers for 2025/26
- Small business multiplier: 49.9p (frozen to protect smaller properties with RV under £51,000).
- Standard multiplier: 55.5p (for properties with RV £51,000 or above).
Before reliefs, a property with £20,000 RV uses the small multiplier: £20,000 × 0.499 = £9,980 annual bill.
This is where a business rates calculator shines it applies the correct multiplier automatically and factors in reliefs.
Business Rates Examples
Here are practical business rates examples to illustrate:
| Property Type | Rateable Value | Multiplier (2025/26) | Gross Bill (before reliefs) | Potential Relief | Estimated Net Bill |
|---|---|---|---|---|---|
| Small high street shop | £12,000 | 49.9p | £5,988 | 100% small business rates relief | £0 |
| Office (mid-size) | £60,000 | 55.5p | £33,300 | None | £33,300 |
| Pub (hospitality) | £40,000 | 49.9p | £19,960 | 40% RHL relief (up to £110k cap) | £11,976 |
| Holiday let | £8,000 | 49.9p | £3,992 | Possible 100% SBRR | £0 |
| Large warehouse | £600,000 | 55.5p | £333,000 | Transitional relief possible | Varies |
These examples show why using a holiday let business rates calculator or small business rates calculator is useful reliefs can drastically reduce liabilities.
Using a Business Rates Calculator
A business rates calculator is an online tool (available on GOV.UK or council sites) that estimates your bill. Input your postcode or RV, and it applies the current multiplier and flags potential reliefs.
Steps to Use a Business Rates Calculator UK
- Go to GOV.UK business rates calculator.
- Enter your property’s postcode or RV.
- Select the local authority.
- Review the estimate, including any automatic reliefs.
For more precision, especially with multiple properties or specific reliefs, use council-specific tools or consult a ratings advisor.
Advanced calculators may factor in upcoming 2026 changes, like new multipliers for retail/hospitality/leisure (RHL) properties.
Small Business Rates Relief
One of the most valuable options is small business rates relief (SBRR).
Do I Qualify for Small Business Rate Relief?
- In England, if your property’s RV is under £15,000 and it’s your only business property (or main one), you may get relief.
- RV £12,000 or less: 100% relief.
- RV £12,001–£15,000: Tapered relief down to 0%.
- All properties with RV under £51,000 use the lower small business multiplier.
If you occupy multiple properties, relief applies only to the main one, but a 12-month grace period (extending to 3 years from 2026) protects eligibility when expanding.
Apply via your local council many award it automatically.
Holiday Let Business Rates Calculator and Rules
Holiday lets often straddle domestic and commercial taxation.
Since April 2023, a property qualifies for business rates (instead of council tax) if:
- Available for commercial letting at least 140 days per year.
- Actually let for at least 70 days per year.
- Intended for commercial letting in the following year.
If it meets these, the VOA assigns an RV, and you pay business rates potentially qualifying for small business rates relief if RV is low.
Use a holiday let business rates calculator on GOV.UK to estimate. If criteria aren’t met, it falls under council tax (often with second-home premiums).
Other Reliefs and Changes for 2025/26
- Retail, Hospitality, and Leisure (RHL) Relief: 40% relief (down from 75%), capped at £110,000 per business.
- Transitional relief for bill increases.
- Empty property relief: 3 months full exemption (6 for industrial).
- From 2026: New banded multipliers, lower for smaller RHL properties.
Check eligibility on the VOA website or GOV.UK.
FAQ
How to calculate rates for business?
Multiply the rateable value by the multiplier (49.9p or 55.5p for 2025/26), then subtract any reliefs. Use the GOV.UK business rates calculator for quick estimates.
Do I qualify for small business rate relief?
Yes, if your sole/main property has an RV under £15,000 (100% relief up to £12,000, tapered above). Properties under £51,000 get the lower multiplier.
What is ratable value?
It’s the estimated open-market annual rent, set by the VOA.
How do I find the ratable value of my property?
Search on the VOA website at gov.uk/find-business-rates.
How are business rates different for holiday lets?
They apply if let commercially for 70+ days and available 140+ days annually; otherwise, council tax.
What reliefs are available in 2025?
40% RHL relief (capped), full SBRR for low-RV properties, and transitional schemes.
When do 2026 changes start?
New multipliers and revaluation from 1 April 2026.
Conclusion
Navigating business rates doesn’t have to be overwhelming. By understanding your rateable value, using a reliable business rates calculator, and checking for reliefs like small business rates relief, you can manage costs effectively.
Visit the VOA website today to find your RV and estimate bills on GOV.UK. If your circumstances change or you think your valuation is wrong, act promptly savings could be significant. Consult a professional advisor for complex cases, especially with 2026 reforms approaching.
