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Business rates

Herefordshire Council has a legal duty to collect business rates on behalf of central government.

The money we collect is paid into a central pool. Central Government then redistributes the central pool back to local councils to help pay for the local services they deliver.

Local councils have no control over the amount of rates payable by business and the level of rates paid is not linked to the level of services businesses actually receive. 

You can check the rateable value of any property on the Valuation Office website.

You can contact us regarding business rates in the following ways:

You can also manage your account online.

How is my business rates bill calculated?

Larger businesses (rateable value £18,000 or over)

To calculate a business rates bill, the rateable value is multiplied by the national multiplier. This is set by central government each year.

For the financial year 2013/14 it is £0.471 pence in the pound.

Therefore, if your rateable value is £20,000 your business rates bill would be £9,420.

Small business rate relief multiplier (less than £18,000)

Small businesses whose rateable value is less than £18,000 and who qualify for small business rate relief are charged rates using a lower multiplier.

For 2013/14 the lower multiplier is £0.462 pence in the pound.

Therefore, if you qualify for small business rate relief and your rateable value is £12,000 your full rates bill would be £5,544.

If you wish to query any aspect of your bill, please contact the business rates team on 01432 260373.

What are transitional arrangements for business rates?

Rateable values are revalued nationally every five years and can increase or decrease significantly between revaluations. The last revaluation came into force on 1 April 2010 and the next one will be 2015. The revaluations are carried out by the Valuation Office Agency based within the Inland Revenue. 

To protect ratepayers, changes in the rates bills can be phased in over a period of time. These are called transitional arrangements.

Different transitional arrangements apply depending on whether your bill has increased or decreased, and whether your business is small or large.

Small businesses have a rateable value of less than £18,000, and large businesses have a rateable value of over £18,000.

Transitional arrangements are based on the change in your rates bill from 2009/10 to the rates bill for 2010/11.

The table below shows the proposed limits for any rates bill increase in a single year.

YearSmall businessLarge business
2010/11 5% 12.5%
2011/12 7.5% 17.5%
2012/13 10% 20%
2013/14 15% 25%
2014/15 15% 25%

The table below shows the proposed limits for any rates bill decrease in a single year.

YearSmall businessLarge business
2010/11 -20% -4.60%
2011/12 -30% -6.70%
2012/13 -35% -7.00%
2013/14 -55% -13.00%
2014/15 -55% -13.00%

We automatically calculate your transitional arrangements. If you qualify, this is shown on your bill.

For more information, please contact the business rates team on 01432 260373.

How do I pay my business rates?

Paying by direct debit

The easiest way to pay your business rates is by direct debit. You will always be told about any changes and you can cancel it at any time. You are guaranteed an immediate refund of any payment which breaks the terms of your instruction.

You can set up direct debit payments by calling us on 01432 260373. You can also download a direct debit instruction. After completing it with your bank details, please send it to our offices.

Pay online

You can use your debit card to pay with our online payments service.

Pay by telephone

You can pay us at any time on our 24-hour payment line, by calling Allpay on 0844 557 8321. Please quote the 19-digit number on the front of your bill - it is beneath the bar code.

You need a debit card to pay by telephone.

Pay at the Post Office

You can pay at any Post Office free of charge. Find your nearest Post Office.

Please take your bill with you, so that the Post Office can scan the barcode.

Pay with PayPoint

You can pay free of charge anywhere that you see the PayPoint sign. Please take your bill with you, so that they can scan the barcode.

What if I have problems paying my business rates?

If you have problems paying your business rates, contact us immediately on:

We can check if your business is entitled to a reduction and we may be able to come to a better payment arrangement.

What happens if I don't pay my business rates?

If you don't pay your business rates on time we will send you a reminder.

If you fail to bring your account up to date within seven days, or fall behind a second time, we will send you a final notice. This means you have lost the right to pay by instalments and all of your business rates for the year must be paid immediately.

If you do not pay after you receive a final notice, you will be sent a summons to the Magistrates Court. You will be charged £85 costs for the issue of the summons.

If you receive a summons and would like to make an arrangement to pay your business rates before the court hearing, contact the Recovery Section on 01432 260380.

If we issue a summons, we will apply for a liability order which will help us to collect the money you owe. The order gives us the power to recover the money you owe by:

  • Sending bailiffs to your property
  • Declaring you bankrupt or insolvent
  • Sending you to prison

Unless the summons is served incorrectly, the only defence against the granting of a liability order is to pay the full charge including costs.

If you receive a summons but do not have a valid defence and cannot pay in full as required, you do not need to attend the hearing. The liability order will be granted in your absence. Instead, contact us immediately.

How do I appeal against my business rates bill?

All non-domestic property has a rateable value set by the Valuation Office, unless it is exempt. Exempt properties include churches, public parks, agricultural land and buildings.

The Valuation Office draws up, and maintains, a full list of all rateable values. Revaluations are carried out every five years. The rateable value broadly represents the yearly rent the property could have been let for on the open market on a particular date. On 1 April 2010 a new rating list came into force and the valuation date was set as 1 April 2008.

If you wish to check your rateable value or that of any other property, visit the Valuation Office website

Rateable value appeals

The ratepayer (and certain others who have an interest in the property) can appeal against the value shown in the list if they believe it is wrong. Further information on the grounds for making an appeal, and on how to make one, can be found in the Valuation Office's Business rates - getting professional advice leaflet.

The business rates is a national scheme devised by central government over which local council have very little discretion.

To find out more information about making an appeal, visit the appeals page of the Valuation Office website.

Can I get relief on my business rates?

There are several kinds of relief for business rates payers:

Small business relief

Some ratepayers are eligible for relief on the grounds that they are a small business. 

You will be classed as a small business if:

  • You have only one property*, in England, on which you are liable (wholly or jointly) for the payment of non-domestic rates
  • The rateable value of that property is £17,999 or less and remains below £18,000 throughout the financial year and
  • The property is occupied and you are not entitled to claim any other mandatory relief

* If you do pay rates on other properties they will be disregarded if their rateable value is £2,599 or lower, provided that the total of all properties' rateable values is £18,000 or less.

If you qualify, you will have your rates calculated using a lower multiplier. Visit the how business rates are calculated page for further details.

Properties with a rateable value of less than £12,000 will receive additional relief depending on the rateable value of the property, as shown below:

For the 2013/14 financial year

  • Rateable value £1 to £5,999 - 100 per cent relief
  • Rateable value £6,000 to £11,999 - relief reducing from 100 per cent to 0.01 per cent (2 per cent for every £120 above £6,000)
  • Rateable value £12,000 to £17,999 - reduced multiplier only

If the criteria are satisfied where a ratepayer has more than one property, small business rate relief can only be applied to one property.

If you have any queries about the relief, please contact: businessrates@herefordshire.gov.uk

To apply for small business rate relief, please complete the small business rate relief application form.

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Hardship relief

Section 49 of the Local Government Finance Act 1988 allows a local authority to reduce or remit the whole or part of the rates payable by the ratepayer provided that:

the ratepayer would sustain hardship if the authority did not do so

and

it is reasonable for the authority to do so having regard to the interests of persons subject to council tax. 

Central government has given the following guidance on hardship as follows:

  • Although authorities may adopt rules for consideration of hardship cases, a blanket policy either to give or not to give relief should not be adopted; each case should be considered on its own merits
  • Reduction or remission of rates on grounds of hardship should be the exception rather than the rule
  • The test of hardship need not be confined strictly to financial hardship. All relevant factors affecting the ability of a business to meet its liabilities for rates should be taken into account
  • The interests of local taxpayers in an area may go wider than direct financial interests, for example where the employment prospects in the area would be worsened by a company going out of business, or the amenities of an area might be reduced by, for instance, the loss of the only shop in the village; and
  • Where the granting of relief would have an adverse effect on the financial interests of local taxpayers, the case for a reduction or remission of rates payable may still on balance outweigh the cost to the local taxpayers

In addition, the Secretary of State advised that hardship could apply to companies as well as individuals.

To apply for hardship relief, please complete the hardship relief application form.

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Rural rate relief

If your business is in a rural village with a small population, you may qualify for rate relief of 50 per cent.

Your business qualifies for rural rate relief if it is:

  • The only general store or post office in the village, and has a rateable value of up to £8,500
  • A food shop with a rateable value of up to £8,500
  • The only pub or petrol station in the village, and has a rateable value of up to £12,500

We can give up to 100 per cent relief on the above categories or any other property with a rateable value up to £16,500 in such villages. The decision is at our discretion and is based on the benefits to the community and council tax payers.

To apply for rural rate relief, download the rural rate relief application form. You can download a list of eligible villages.

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Retail rate relief

Starting from 1 April 2014, a retail relief has been introduced by the Government for 2014/15 and 2015/16.

Properties that will benefit from the retail relief will be occupied properties with a rateable value of £50,000 or less, that are wholly or mainly being used as shops, restaurants, cafés and drinking establishments.

Types of properties that qualify for retail rate relief

The Government considers shops, restaurants, cafés and drinking establishments to mean:

1. Properties that are being used for the sale of goods to visiting members of the public:

  • Shops (such as florists, bakers, butchers, off licence, stationers, jewellers, chemists, hardware stores, supermarkets)
  • Charity shops
  • Opticians
  • Post offices
  • Furnishing shops or display rooms (such as carpet shops, double glazing, garage doors)
  • Second hand car lots
  • Markets
  • Petrol stations
  • Garden centres
  • Art galleries (where art is for sale or hire)

2. Properties that are being used for the provision of the following services to visiting members of the public:

  • Hair and beauty services (such as hair dressers, nail bars, tanning shops)
  • Shoe repairs or key cutting
  • Travel agents
  • Ticket offices (for example for theatre)
  • Dry cleaners
  • Launderettes
  • PC, TV or domestic appliance repairs
  • Funeral directors
  • Photo processing
  • DVD or video rentals
  • Tool hire
  • Car hire

3. Properties that are being used for the sale of food and/or drink to visiting members of the public:

  • Restaurants
  • Takeaways
  • Sandwich shops
  • Coffee shops
  • Pubs
  • Bars

To qualify, the property should be wholly or mainly used as shown above, this is a test on use rather than occupation. Therefore, properties which are occupied but not wholly or mainly used for a qualifying purpose will not qualify for the relief.

Types of properties that are not considered to be retail use for the purposes of retail rate relief

The list below shows some uses that are not considered to be retail use for the purposes of this relief.

1. Properties that are used for the provision of the following services to visiting members of the public:

  • Financial services (banks, building societies, cash points, bureau de change, payday lenders, betting shops, pawn brokers)
  • Other services (estate agents, letting agents, employment agencies)
  • Medical services (vets, dentists, doctors, osteopaths, chiropractors)
  • Professional services (solicitors, accountants, insurance agents, financial advisors, tutors)
  • Post office sorting office

2. Properties that are not reasonably accessible to visiting members of the public

Amount of relief available

The amount of relief available for each property is up to £1,000 a year for 2014/15 and 2015/16. The amount does not vary with the rateable value of the property and there is no taper. There is no relief available for properties with a rateable value over £50,000.

The eligibility for the relief and the relief itself is assessed and calculated on a daily basis. The retail relief will be applied against the net bill after all other reliefs have been applied. The retail relief applied is up to £1,000 and the amount granted will not exceed the net rate liability.

You can have this relief on more than one property, subject to State Aid De Minimis Regulations. For further information see the State Aid page on the GOV.UK website.

For further information about retail rate relief see the Department for Communities and Local Government guidance on retail rate relief.

For further enquiries please contact the business rates section on 01432 260373 or email businessrates@herefordshire.gov.uk

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Do I have to pay business rates on a holiday home?

If you make your holiday home available for letting more than 140 days per year, you will be charged business rates even if nobody rents it from you.

If you make your holiday home available for less than 140 days per year, you will be charged 90 per cent council tax as a second home.

For further information please contact us:

Do I have to pay business rates on bed and breakfast accommodation?

If you provide bed and breakfast accommodation in your own home for more than six people at a time, you will be charged business rates.

Double rooms count as accommodating two people and single rooms as one person.

If you offer bed and breakfast to six people or fewer, and the main use of your property is as a residence, you will only be charged council tax.

For further information please contact us:

Does a charity have to pay business rates?

Registered charities automatically get an 80 per cent reduction in their rates bill if the property is used for charitable purposes. 

Registered community amateur sports clubs (CASCs) are also entitled to 80 per cent relief on any non-domestic property that is mainly used for the purposes of that club.

We also have the discretion to reduce the bill even further.

We may also reduce the rates bills of some other not-for-profit bodies. These include not-for-profit recreational clubs and organisations concerned with:

  • Education
  • Social welfare
  • Science
  • Literature
  • Fine arts

Application form for rate relief for charities and non profit making bodies

Do I have to pay business rates on an unoccupied property?

If your business premises have been empty for more than three months, full business rates are payable. Industrial and warehouse property may remain empty for six months before rates become payable.

We may exempt unoccupied property from business rates if:

  • The owner of the property is prohibited by law from occupying the property
  • The property is a listed building
  • The rateable value is less than £2,600 
  • The owner is in administration or liquidation

For further information please contact us:

Do I have to pay business rates if I work from home?

If part of your home is clearly a business and not a dwelling, you may have to pay council tax on the part you use as a home and pay business rates on the part of your property which is used for commercial purposes. 

The Valuation Office makes the decision if part of a home should be liable for business rates. To find out more, contact them on 03000 501501 or visit the Valuation Office website.

How is the business rates team performing?

In 2012/13, we collected 98.7 per cent of business rates, against a target of 98.8 per cent.

Over the year, we saw an average direct debit take-up of 53.66 per cent of all payers, against a target of 57 per cent.

Statement of intent

  • For 2012/13 we aim to collect 98.8 per cent of the business rates due within the current year thereby achieving an above average collection rate in comparison with other local councils
  • Where there has been a change of circumstances, we aim to send a bill within 10 working days of receiving all the relevant information in 90 per cent of cases
  • There may be occasions during times of peak workload when we are not able to meet our aims. We aim to manage our resources as effectively as possible to keep such delays to a minimum
  • We aim to answer 95 per cent of all telephone calls between 8.45am and 5.15pm, 80 per cent of them within 15 seconds
  • We aim to answer 95 per cent of your letters within 10 working days
  • When answering the telephone, we will give our name and the name of the section
  • When answering correspondence, we will use language that is easy to read and understand and provide details of a named contact or contact point
  • We will use customers' complaints, compliments and suggestions as a way of improving the service
  • We aim to be fair, polite and helpful
  • We aim to provide a level of service that meets our customers' needs, but if we make a mistake we will apologise and give priority to putting it right
  • We will not make promises we cannot keep
  • We will keep under continual review the training and development requirements of our staff