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Rateable value

Rateable value (RV)- What is rateable value?

Rateable value is the estimated annual rental value of a commercial property which is calculated by a valuation officer. It is used to determine how much a company pays for business rates in the UK.

Due to the coronavirus pandemic, the UK Government has announced support for small businesses. Read more on our blog: “Business rates relief for 2020-2021”.

All non-domestic properties, including most businesses, are required to pay business rates. All of these businesses will have a rateable value based on an assessment of the building, which will determine the business rates they will pay.

Where to find your rateable value

Business rates are determined by multiplying the rateable value by the “multiplier” set by the government.

The rateable value, or property’s value, is based on the open market value from 2015. These are estimates from the Valuation Office Agency.

You can check the RV of your property on the UK Government Website or on your most recent business rates bill.

Rateable value vs. rent

Rateable value is not the same as the rent you pay for the property. The rateable value is an estimate of the amount the property could have been rented for in 2015. You will not be paying this amount in business rates, rather it is multiplied by a "multiplier" percentage in order to calculate the business rates.

The rent you actually pay for the property may be different from the rateable value. They may be similar amounts, but in the end, it is what is agreed upon between you and your landlord.

Example of rateable value in business rates

Tim runs a small clothing shop in Manchester. From the UK Government website, he finds that the rateable value of his shop is £13,000. Since his RV is less than £51,000, he uses the “small business multiplier” of 49.1p (2020) outlined on the government website.

Business rates = (rateable value x multiplier) - business rates relief

Tim’s business rates are:

£13,000 (RV) x 0.491 (multiplier) = £6,383 (business rates)

Since his rateable value is under £15,000, he may also qualify for business rates relief which will reduce his bill.