Do you own a small business in the UK? If you use a building like a shop or office, you may have to pay something called business rates. Don’t worry, it might sound hard, but this guide makes it easy to understand.
We’ll also talk about Alternative Business Structures (ABS), which are a new way to run legal service businesses in the UK. This guide will explain how they work in plain, simple language.
What Are Business Rates?
Business rates are like a tax. You pay them to the council if you use a property for business. The money helps fund things like roads, libraries, and local services.
What Is Rateable Value?
Every business property has a rateable value. This is how much the building could be rented for each year. In 2025, the government is still using rental values from April 1, 2021.
How to Work Out Business Rates
Step 1: Find Your Rateable Value
Go to the UK Government site and enter your business address. You’ll see your property’s rateable value there.
Step 2: Use the Right Multiplier
The multiplier is a number the government sets to help calculate how much you pay. In 2025:
- If your rateable value is under £51,000, use 0.499
- If your rateable value is £51,000 or more, use 0.555
Step 3: Calculate Your Bill
Multiply your rateable value by the multiplier.
Example: Rateable value = £20,000 Multiplier = 0.499 Your bill = £20,000 × 0.499 = £9,980
Step 4: Check for Extra Fees
Some areas charge a little more for big projects, like Crossrail in London. This is called a supplement.
Why Your Rates May Change
Revaluation
The government checks property rental values every few years. If rent values change, so does your business rate.
Transitional Help
If your bill increases a lot, you might get help called transitional relief. It means you won’t have to pay the full increase all at once.
Ways to Save on Business Rates
Small Business Rate Relief
- If your rateable value is £12,000 or less, you may not pay anything.
- Between £12,001 and £15,000, you can get a partial discount.
Other Relief Options
- Charity relief: Up to 80% off if you’re a charity.
- Rural relief: For small shops in the countryside.
- Fresh start relief: For new businesses in empty buildings.
Different Countries in the UK
Scotland, Wales, and Northern Ireland have their own rules. Check with your local council to learn more.
What If Your Bill Looks Wrong?
Appeal the Value
If you think your rateable value is too high, you can appeal it.
How to Appeal
Make a free account on the VOA website and send proof, like rent costs of similar buildings nearby.
Example: A shop in London thought their bill was too high. They appealed and saved over £9,000 per year.
What’s an Alternative Business Structure (ABS)?
An ABS is a way for people who aren’t lawyers to help own or manage law businesses. This helps bring in investment and lets law firms work with other types of businesses.
Why ABS Might Be Good
Benefits:
- Can get money from investors
- Can offer different types of services (like legal and financial)
Things to consider:
- Must follow special rules
- Can be complex to manage
Who Uses ABS?
- Big law firms
- Companies owned by employees
- Community groups that give legal advice
Should You Consider an ABS?
If you want to grow your legal services or need outside investment, ABS might be right for you. You must register with the Solicitors Regulation Authority (SRA) and show you’re fit to manage a legal business.
Tips to Lower Your Business Rates
- Always check your rateable value every year
- Appeal if something seems off
- Ask your council if you can get relief or help
- Use energy-saving upgrades (some councils offer extra relief for green improvements)
Helpful Tools
- GOV.UK Business Rates Calculator
- Keep a note of what you pay each year
- Compare your rates with other similar local businesses
Final Thoughts
Business rates may seem confusing, but now you know the basics. Check your property’s rateable value, use the right multiplier, and always see if you can get help.
If your business wants to expand into legal services, an ABS could be a smart move. Talk to your council, visit the VOA site, and take action today.
FAQs
What are business rates?
A tax you pay if you use a building for business.
How do I check how much I need to pay?
Look up your rateable value on the government site and use the multiplier.
Can I get a discount on my bill?
Yes. Small businesses, charities, and rural shops often qualify.
What is an ABS?
A business model that allows non-lawyers to manage legal firms.
What should I do if my bill is too high?
Appeal it by giving proof of a lower rental value.