Complete Guide to Understanding VOA Business Rates

It is important to understand VOA business rates if you are a business owner in the UK that occupies non domestic property. Whether your business is a small one, such as one operating out of a retail unit, or a multinational, that occupies a non domestic building, knowing how the VOA business rates system works can ensure you are aware of financial implications before they become costs.

In this guide, we’ll look at what VOA business rates are, how they’re calculated, the function of the VOA, and what powers you have, if any, in appealing or getting them reduced.

🏢 What Are VOA Business Rates?

VOA business rates are a property tax for businesses occupying a non-residential property in England and Wales. Business rates are levied by councils and used to pay for local services like waste collection, maintenance of streets, and public safety.

The acronym “VOA” stands for Valuation Office Agency and is the government body that assesses the value of a business property which is used to calculate your business rates.

🧾 How VOA Business Rates Work

Business properties are allocated a rateable value by the VOA (Valuation Office Agency), which indicates the open market rental value of the property (as of a set date, which is currently 1 April 2021 for the 2023 rating list).

VOA business rates are calculated on the following basis:

Business Rates = Rateable Value × Multiplier

Rateable Value: Determined by the VOA – based on the size of the property, how the property is used, the location of the property, the market at the time of reevaluation.

Multiplier: Determined by the government each year. annual multipliers are determined by the government each year, for 2023/24 standard multiplier is 51.2p and for small businesses, its 49.9p.

Let’s say your shop has a rateable value of £20,000. If you are a small business that qualifies for the small business rates multiplier (49.9p) your annual business rates will be £20,000 × 0.499 = £9,980

🏘️ Who Pays VOA Business Rates?

Businesses that use non-domestic properties will be liable for VOA business rates, including:

Retail shops
Offices
Warehouses Factory
Bars and restaurants
Gyms and salons

It is worth noting that even if you run your business from home, you may still be liable for VOA business rates if you are solely using part of your home for business use (i.e., beauty salon, consulting office).

VOA Business Rates Relief Options

The good news, however, is that there are a number of relief options available which may allow you to reduce your VOA business rates:

1) Small Business Rate Relief (SBRR)
If your property has a rateable value below £15,000 you may qualify for SBRR.
Properties under £12,000 normally receive 100%, meaning you will pay no business rates.
2. Retail, Hospitality and Leisure Relief
Due to challenges such as COVID-19 and rising costs, the government has released temporary relief for eligible sectors. In 2023/24, for instance, businesses will receive 75% off their business rates bill, up to £110,000 p.a. per business.
3. Rural Rate Relief & Charitable Relief
Relief is also available for certain rural businesses and registered charities, depending on eligibility. These schemes intend to extend support for essential services for rural/needy areas and non-profit work.

📍 How to find your VOA business rates

You may access your VOA business rates and rateable value for the property online through the official GOV.UK Business Rates Valuation Tool.

If you simply enter your business address/postcode, you can receive detailed information, including:

Rateable value
Description of property
Previous changes in valuation
Multipliers that apply

🧾 Contesting Your VOA Business Rates

If you feel your rateable value is too high or if your circumstances have changed, you are entitled to appeal or seek a revaluation from the VOA.

How to Appeal VOA Business Rates:

Visit the VOA website and check the details of your property.

Step 1: Submit a “Check” with the VOA: You initially will be just requesting the VOA to check and verify its information.
Step 2: Challenge: If you are not happy with the “Check” outcome, you can submit a formal “challenge” within 4 months of being notified of the VOAs original decision.
Step 3: Appeal: If you are still not satisfied, the case can be progressed to the Valuation Tribunal as the final stage.

If you are proposing a challenge, it is wise to speak with a business rates advisor or surveyor previously, especially when the property is larger.

💼 Why Are VOA Business Rates Important When Financial Planning?

VOA business rates can be one of your largest fixed costs when running your business and may be particularly significant if you are in retail or hospitality. It is important that you understand how they are calculated, when they may increase or decrease and that there is potential for some relief in some cases, which all contribute towards your budgeting and understanding long term viability.

Thorough and fact-based rate assessments are essential to maintaining a level playing field across industries as well as geographical areas.

📆 Future changes and revaluations

Normally, properties would be revalued every 3 years so that the rateable values (the value set by the VOA) are in line with current market conditions and it can be difficult to keep track of when changes will take place. The most recent revaluation occurred with an effective date of 1 April 2023 based on rental values as at 1 April 2021.

Businesses should note the next scheduled revaluation is sometime likely in 2026 as this could have a significant effect on your VOA business rates bill.

✅ Steps to manage and reduce VOA business rates

Below is a list of things you can do to better manage your VOA business rates:

Look for errors: Property data includes measurements and descriptions and if they are incorrect, you could end up being charged a greater amount than you should be. Always check your property details.
Apply for reliefs early: Don’t wait until you get the bill – once you qualify and know you will get some reliefs, apply for it.
Split or combine an assessment: In specific circumstances where there is a large space, it may be beneficial to separate the assessments or, when Properties are close together, you may find that you could combine them.
Ask for a professional to help you: Chartered surveyors or a business rates specialists may be able to find savings that a business owner would otherwise not find.

🔚 In summary

While it may be challenging to understand VOA business rates, the knowledge you will gain about how they operate and taking action could save your business thousands of pounds per year. The more you understand checking your rateable value, getting relief when available and managing your business rates, the more money you have in your bank account.
Whether you are a new startup or have been trading successfully for several years – being aware of your business rates will help make sure that you aren’t paying more tax than you need to so that your business remains financially viable and compliant.

🚀 Need Help with VOA Business Rates?

If, after reading this article, you feel you would like help to review or appeal your VOA business rates, please do consult a consultant/expert or get in contact with the VOA directly. When it comes to assessing premises, small changes can lead to bigger savings on your business’s bottom line.

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