Rateable value is the annual rent that the Valuation Office Agency (VOA) estimates a commercial property would fetch on the open market at a set date, and it is the base figure councils in England and Wales use to work out business rates. Multiply the rateable value by the government’s multiplier, subtract any reliefs, and you have the bill. The figure applies only to non-domestic property such as shops, offices, factories, and warehouses.
What Rateable Value Actually Is
The VOA imagines the property being offered on the open market at a specific valuation date and asks what a reasonable landlord and a reasonable tenant would agree on. The valuation assumes the property is vacant, in reasonable repair, and that the tenant would be responsible for rates, repairs, and insurance on top of the rent.1GOV.UK. How Your Property Is Valued for Business Rates
It is a hypothetical rent. It has nothing to do with the property’s sale price, and nothing to do with whatever the current occupier is actually paying. The point of the figure is to give every council the same standardised base, so tax burden is distributed consistently across the country.
Rateable values are published in a rating list and expressed in pounds sterling. You can look up any property’s current rateable value for free on GOV.UK and see how the figure was calculated.2GOV.UK. Find a Business Rates Valuation
How the VOA Arrives at the Figure
Three valuation methods are in use. The VOA picks whichever fits the property and the evidence available.1GOV.UK. How Your Property Is Valued for Business Rates
Rental Comparison
Most shops, offices, cafés, factories, and warehouses are valued this way. VOA surveyors collect actual rents paid on comparable properties nearby, adjust for differences in lease terms and physical characteristics, and arrive at a rate per square metre. Floor area, location, age, condition, and use all feed in.3Valuation Office Agency. How We Value Properties for Business Rates: The Rental Comparison Method Pubs and some hospitality venues get a variation based on trade evidence rather than comparable rents.
Contractor’s Basis
Schools, hospitals, and airports are rarely rented, so no market evidence exists. Instead, the VOA estimates rebuild cost and applies a prescribed rate to convert that into an annual rental equivalent. Hospitals and educational properties in England use a rate of 2.6%; most other properties use 4.4%.4GOV.UK. Rating Manual Section 4: Valuation Methods – Part 3: Appendix 3
Receipts and Expenditure
For trade-related properties where the building and business are so intertwined that rental comparisons miss the point, the VOA looks at income and operating costs to work out what a tenant could afford to pay in rent.5GOV.UK. Rating Manual Section 4: Valuation Methods – Part 2
One thing worth knowing: most machinery used in a business’s specific trade processes is excluded from the valuation under the “tools of the trade” exemption. What tends to count is building services like power generation, heating systems, and major electrical installations.6Legislation.gov.uk. Explanatory Memorandum to The Valuation for Rating (Plant and Machinery) (England) (Amendment) Regulations 2022
How Rateable Value Turns Into a Bill
Your rateable value is not your tax bill. The council multiplies it by a figure called the multiplier (or “poundage”), expressed in pence per pound of rateable value, then deducts any reliefs.7GOV.UK. Estimate Your Business Rates
From April 2026, England moved from two multipliers to five. The rate you use depends on the type of business and the size of the rateable value:7GOV.UK. Estimate Your Business Rates
- Standard, rateable value £51,000 to £499,999: 48 pence
- Standard, rateable value below £51,000: 43.2 pence
- Retail, hospitality, and leisure, rateable value £51,000 to £499,999: 43 pence
- Retail, hospitality, and leisure, rateable value below £51,000: 38.2 pence
- Any property, rateable value £500,000 or more: 50.8 pence
For reference, the 2025-to-2026 year used just two rates: 55.5 pence standard and 49.9 pence for small business.7GOV.UK. Estimate Your Business Rates
A quick example. Take an office with a rateable value of £30,000. Under the 2026-to-2027 standard multiplier of 43.2 pence, the gross bill before reliefs is £30,000 × 0.432 = £12,960. If that same property were a café, the retail, hospitality, and leisure multiplier of 38.2 pence would give a gross bill of £11,460.
Reliefs That Can Reduce or Remove the Bill
Several reliefs cut business rates, and some wipe them out entirely. The council applies them after calculating the gross bill.
Small Business Rate Relief
If your business uses only one property and its rateable value is £12,000 or less, you pay nothing. Between £12,001 and £15,000, the relief tapers from 100% down to zero.8GOV.UK. Small Business Rate Relief Even without qualifying, properties under £51,000 automatically use the lower small business multiplier.7GOV.UK. Estimate Your Business Rates
Empty Property Relief
Vacant commercial properties are exempt from rates for the first three months. Industrial and warehouse properties get six months. After that, the owner becomes liable for the full occupied rate.9GOV.UK. Empty Property Relief
Some properties stay exempt indefinitely: listed buildings, properties with a rateable value under £2,900, charity-owned properties whose next use will be mostly charitable, and community amateur sports club buildings whose next use will be mostly as a sports club.9GOV.UK. Empty Property Relief
Transitional Relief
When a revaluation sends your rateable value up sharply, transitional relief caps how much your bill can rise in a single year. The council applies it automatically.10GOV.UK. Transitional Relief For the 2026 revaluation the caps are:
- Rateable value up to £20,000 (£28,000 in London): 5% year one, 10% plus inflation year two, 25% plus inflation year three
- Rateable value £20,001 to £100,000 (£28,001 in London): 15%, then 25% plus inflation, then 40% plus inflation
- Rateable value over £100,000: 30%, then 25% plus inflation, then 25% plus inflation
Decreases are phased in the same way, so a property whose rateable value fell at revaluation will not see the full reduction straight away.10GOV.UK. Transitional Relief
Improvement Relief
Physical improvements that increase rateable value earn 12 months of 100% relief on the portion of the increase caused by the works. The scheme runs from 2024 to 2028 and covers things like expanding floor area, upgrading condition, or adding rateable plant and machinery. The property must stay occupied by the same ratepayer throughout, and a change of use alone does not qualify.11UK Parliament. Business Rates Reliefs
When the Value Changes
Rateable values are not fixed. Since 2023, the VOA reassesses every commercial property in England and Wales on a three-year cycle.12GOV.UK. Business Rates Revaluation 2026
Each revaluation is anchored to an Antecedent Valuation Date (AVD), a single point whose market conditions set every rateable value on the new list. The AVD sits two years before the new list takes effect. The current list took effect on 1 April 2026, with values based on market rents at 1 April 2024.13GOV.UK. Business Rates: Revaluation The two-year lag matters. If rents in your area peaked in 2024 and have since fallen, your rateable value still reflects the peak until the next cycle.
You do not always have to wait. If something physically affects your property or its surroundings and makes the current rateable value inaccurate, you can report a material change in circumstances. Qualifying changes include alterations to the property, changes in how nearby land is used, or shifts in the character of the area.14GOV.UK. Rating Manual Section 2: Valuation Principles – Part 7 The claim goes through the same Check, Challenge, Appeal process as any other dispute.
Challenging a Rateable Value You Think Is Wrong
Disputes follow a mandatory three-stage process. You cannot skip ahead.15GOV.UK. How to Challenge Your Business Rates Valuation
Check comes first. Register for a business rates valuation account on GOV.UK, add your property, and verify the factual details the VOA holds: floor sizes, number of rooms, parking, permitted uses. Correcting a mistake here often resolves the issue.
Challenge is the formal stage. You propose an alternative rateable value and back it with evidence such as rental data from comparable properties. If the VOA has not decided within 18 months, you can go straight to appeal.
Appeal goes to the Valuation Tribunal for England, an independent body. Fees are £150 for smaller proposers and £300 for others, refunded in full if you win. Losing a case decided without a hearing brings a partial refund of £50 or £100.16Valuation Tribunal Service. Rateable Value Appeal Current timeframes run to around nine months.17Valuation Tribunal Service. Business Rate Appeals
The evidence bar rises sharply at Challenge and Appeal. Credible comparable rental evidence, presented in a form surveyors accept, is usually the difference between winning and losing, and most ratepayers with anything substantial at stake bring in a rating surveyor.
Scotland and Northern Ireland
Everything above applies to England and Wales. Scotland and Northern Ireland run their own systems, with separate valuation agencies, different multipliers, and their own reliefs.18GOV.UK. Business Rates: How Your Rates Are Calculated If your property is in either jurisdiction, check with the relevant local authority.