VOA business rates are an essential consideration for any business operating from commercial premises in the UK. As we approach 2025, it’s crucial to understand the changes and how they may impact your financial planning.
With revaluations, inflation adjustments, and relief schemes in place, staying informed can help you navigate these costs effectively.
In this article, we’ll explore the key aspects of VOA business rates in 2025, including rateable value updates, relief options, and government measures aimed at easing the financial burden.
Whether you’re a small business owner or managing a large property, this guide will provide valuable insights to help you plan ahead.
What Are VOA Business Rates?
VOA business rates, also known as non-domestic rates, are a form of property tax levied on businesses operating from commercial premises.
These rates are assessed by the Valuation Office Agency (VOA), which assigns a rateable value to each property based on its estimated annual rental income in the open market.
Business rates are a significant source of funding for local councils, helping to finance essential public services like schools, infrastructure, and waste management.
For businesses, understanding these rates is crucial as they directly impact operating costs. The Government conducts regular revaluations, with the latest taking effect in 2023.
The 2025 revaluation will bring further changes, particularly in response to market trends and inflation. Businesses with properties in high-value areas, like London, may face substantial increases in their bills, while those in less desirable locations may see reductions.
Being aware of business rates ensures that businesses can plan their budgets effectively and take advantage of any available relief schemes, such as Small Business Rate Relief or Retail, Hospitality, and Leisure (RHL) Relief. These measures can significantly reduce the financial burden for eligible businesses.
How Are VOA Business Rates Calculated?
The calculation of VOA business rates is based on two main factors: rateable value and the business rates multiplier. Let’s break down these components:
1. Rateable Value (RV): This is the open-market rental value of a property, as estimated by the VOA. The RV is reviewed during revaluations to reflect current market conditions.
2. Business Rates Multiplier: This is a figure set by the Government annually and represents the amount payable per pound of rateable value. There are two types of multipliers:
- Small Business Multiplier: Applies to properties with lower rateable values.
- Standard Multiplier: Applies to all other properties.
Example of Calculation
For a property with a rateable value of £50,000 and a small business multiplier of 49.9p, the annual business rates bill would be:
- £50,000 x 0.499 = £24,950
Additionally, the Government has frozen the small business multiplier for 2025 to protect businesses from excessive inflation-driven increases.
However, properties with higher rateable values will still face significant increases due to the updated multipliers.
How Much is VOA Business Rates in 2025?
The VOA business rates in 2025 will vary depending on the rateable value of the property and the business rates multiplier set by the Government. Here’s a breakdown of how much businesses can expect to pay, including the anticipated rate increases:
Projected Rate Increases for 2025
| Rateable Value | 2023 to 2024 Increase | 2025 to 2026 Increase |
| Up to £20,000 (£28,000 in London) | 5% | 25% plus inflation |
| £20,001 to £100,000 | 15% | 40% plus inflation |
| Over £100,000 | 30% | 55% plus inflation |
Business Rates Multiplier for 2025
- Small Business Multiplier: Frozen at 49.9p per £1 of rateable value.
- Standard Multiplier: Expected to be slightly higher than the small business multiplier.
Businesses should also account for any relief schemes they qualify for, such as the Retail, Hospitality, and Leisure Relief, which offers a 40% discount (capped at £110,000 per business).
To get an exact figure, you can use the VOA business rates calculator or consult the VOA website.
Who Qualifies for Business Rates Relief in 2025?
Several relief schemes are available to help businesses reduce their business rates liability:
1. Small Business Rate Relief (SBRR):
- Provides 100% relief for properties with a rateable value of £12,000 or less.
- For properties with a rateable value between £12,001 and £15,000, relief is tapered.
2. Retail, Hospitality, and Leisure Relief (RHL):
- Offers a 40% discount for eligible properties.
- Capped at £110,000 per business.
3. Transitional Relief:
- Caps the annual increase in business rates during the revaluation period.
- Automatically applied, ensuring businesses don’t face sudden, sharp increases.
4. Discretionary Relief: Local councils can provide additional relief based on specific circumstances, such as financial hardship.
Businesses should check their eligibility and apply for these schemes to reduce their tax burden significantly.
How Can You Check Your Business’s Rateable Value?
Checking your property’s rateable value is a straightforward process, thanks to the VOA’s online checker. Follow these steps to access your property’s details:
- Visit the VOA business rates checker website.
- Enter your property’s postcode.
- Select your property from the search results.
- View the rateable value, along with any changes from previous revaluations.
If you believe the rateable value is incorrect, you have the right to challenge or appeal the valuation. This process involves providing evidence, such as comparable property values or rental agreements, to support your claim.
Ensuring your rateable value is accurate can prevent overpayment and help your business manage costs effectively.
Are Inflation and Multiplier Freezes Affecting Your Bill?
Inflation plays a significant role in business rates, as it influences the annual adjustment of the business rates multiplier. To mitigate the impact of rising inflation, the Government has frozen the small business multiplier at 49.9p for 2025.
While this freeze provides some relief, businesses with higher rateable values may still see substantial increases due to revaluation adjustments.
For example, properties with a rateable value exceeding £100,000 are subject to a 55% increase plus inflation.
The combination of multiplier freezes and relief schemes, such as the RHL relief, aims to protect businesses from unsustainable cost increases.
Reviewing your bill and understanding how these factors affect your business is essential for proper financial planning.
What Are the Penalties for Not Paying Business Rates?
Failure to pay business rates can lead to severe consequences, including:
- Reminder Notices: Issued by local authorities for overdue bills.
- Court Summons: If payments are not made following the reminder notice.
- Liability Orders: Granting councils the authority to recover debts through enforcement agents.
Businesses in financial difficulty should immediately contact their local council to negotiate a payment plan.
Additionally, support organisations, such as the Business Debtline, can provide valuable advice and assistance.
Avoiding penalties by staying compliant is crucial for protecting your business from legal and financial risks.
How Does the Transitional Relief Scheme Work?
The Transitional Relief Scheme helps businesses adjust to increases in their business rates following a revaluation. This relief smooths out significant rate hikes by capping the annual increase, allowing businesses to transition gradually to their new liabilities.
This automatic relief ensures that businesses are not immediately burdened by steep increases in their bills.
However, properties seeing decreases in rateable value may face restrictions on how much their bills are reduced annually, known as “downward phasing.”
By managing both upward and downward transitions, the scheme aims to provide stability and predictability, enabling businesses to plan their finances effectively during periods of economic change.
What’s the Impact of Business Rates Reform on UK Companies?
The ongoing business rates reform aims to create a fairer and more transparent system, but it comes with mixed implications for UK companies.
Reforms like the 2025 revaluation update rateable values to reflect current market conditions, potentially increasing bills for businesses in high-value areas, while reducing them for those in less prosperous regions.
Key changes under reform include:
- Introduction of more frequent revaluations (every three years) to ensure businesses are taxed on up-to-date values.
- Expansion of relief schemes, such as the Retail, Hospitality, and Leisure Relief, which provides a 40% discount to eligible businesses.
- Freezing the small business multiplier to curb inflation-driven increases.
While these reforms aim to address discrepancies and modernize the system, some businesses may still face financial strain, particularly those with high rateable values or limited access to relief.
Companies must stay informed and proactive to benefit from reforms while preparing for potential cost increases.
Conclusion
Understanding VOA business rates in 2025 is essential for maintaining your business’s financial health. With rising rateable values, inflation-linked increases, and various relief schemes available, proper planning can make a significant difference.
Take advantage of tools like the VOA checker and explore potential relief options to reduce your overall costs. By staying proactive and informed, businesses can manage their liabilities effectively and avoid unexpected financial strain.
As regulations evolve, staying updated ensures you remain compliant while taking full advantage of any government support offered. Let this article serve as a resource to guide your business through the changing landscape of business rates in 2025.
FAQs on VOA Business Rates 2025
What is the Rateable Value Threshold for Small Businesses?
Small businesses qualify for 100% relief if their rateable value is £12,000 or less.
Will the Relief Cap Affect My Business?
Yes, the £110,000 cap on RHL relief applies across all eligible properties owned by a business.
How Can I Appeal My Business Rates Bill?
Appeals can be made through the VOA by providing evidence to challenge your property’s valuation.
What Are Transitional Relief Limits?
Transitional relief limits annual increases to 25%, 40%, or 55%, depending on rateable value.
Is the Business Rates Multiplier Frozen for 2025?
Yes, the small business multiplier is frozen at 49.9p to ease inflationary pressures.
How Does Retail Relief Support Businesses?
Retail relief offers a 40% discount, capped at £110,000 per business.
What Are the Legal Implications of Non-Payment?
Non-payment can lead to court action, liability orders, and enforcement measures.