Rateable value

Rateable value (RV) is a value that is given to all non-domestic and commercial properties. It is used to assess the amount of business rates the property owner or leaseholder must pay. It is re-evaluated periodically.

The UK government’s definition of rateable value which applies to all properties is:

• ‘Rateable value represents the rental value of a property if it was let at the standard valuation date on the basis that the tenant pays for all repairs during the letting. The definition includes an assumption that the property is let in a state of reasonable repair.’

Rateable values are calculated by the Valuation Office Agency (VOA) which is independent from local authorities. The VOA gives government the valuations and property advice needed to support taxation and benefits.

In a commercial property that houses numerous tenants, each unit is assigned its own RV. Where these also incorporate a domestic property, such as a flat above the shop, they are classed as composite properties and so are valued for both business rates and council tax.

Generally, disrepair does not affect a property’s rateable value unless:

• The property is in such a bad state that a reasonable landlord would consider repair to be uneconomic.
• The property is in such a bad state that a reasonable landlord might repair only part of it.
• The property has been so badly damaged by fire or flooding that it cannot be economically repaired and used.

Once rateable values have been established by the Valuation Office Agency, they are given to local authorities who use them to calculate business rates. All businesses that occupy commercial or non-domestic properties are liable for business rates.

Business rates can be calculated by taking a property’s rateable value and multiplying it by the appropriate multiplier. The multiplier is how much per pound of rateable value must be paid in business rates before any relief or discounts are deducted.

It can be useful to know what business rates should be, either to check the correctness of existing rates or to assess how much they might be for a potential property purchase. Rateable values can be found by entering the appropriate postcode at the Gov.UK website HERE.

[edit] Related articles on Designing Buildings Wiki

• Business rates.
• Capital gains tax.
• Check, challenge, appeal.
• Council tax.
• Income tax.
• Industrial buildings allowance (IBA)
• Local property tax.
• PAYE.
• Rate relief schemes.
• Rates.
• Staircase tax.
• Stamp duty.
• Tax relief.
• VAT.
• VAT reverse charge.