Business Rates
Part 3 of the Local Government Finance Act 1988 ("the 1988 Act") deals with non-domestic rating in England and Wales (often known as "business rates"). Business rates are a property tax paid by occupiers and owners of non-domestic properties. Units of property subject to business rates are called "hereditaments".
	Liability for business rates is based upon the rateable value of the hereditament which, broadly speaking, is its annual rental value. Rateable values are set by the Valuation Office Agency (VOA) and appear on non-domestic rating lists. There is a rating list for each billing authority and a central rating list held by the Secretary of State (typically containing network hereditaments which span many billing authority areas). 1 A business rates bill is determined by multiplying the rateable value of the hereditament by the applicable business rates multiplier.
	As business rates is devolved, multipliers are set by the UK Government in England, and by the Scottish and Welsh Governments in Scotland and Wales respectively. 2 In Northern Ireland, the Northern Ireland Executive and the district councils set separate rating multipliers, with the full rate collected by the Land and Property Services. The provisions in this Act concern England only.
	Prior to the changes made by this Act coming into effect from April 2026, in England there were two non-domestic rating multipliers – the non-domestic rating multiplier and the small business non-domestic rating multiplier. The non-domestic rating multiplier is applicable to hereditaments with a rateable value of £51,000 and above and for 2024/25 is set at 0.546. The small business non-domestic rating multiplier is applicable to hereditaments with a rateable value of £50,999 and under and for 2024/25 is set at 0.499. This Act enables the introduction of new additional multipliers from April 2026.
	Ratepayers in England may be eligible for a range of different reliefs from business rates such as small business rate relief, improvement relief and retail, hospitality and leisure relief. 3 Some reliefs are mandatory and provided for in legislation, whereas others are given at the discretion of the billing authority. One such mandatory relief is for charities which are entitled to 80% relief on occupied properties and 100% relief on unoccupied properties, including private schools where they are charities.
	In addition, a hereditament, or part of a hereditament, may be exempt from business rates and as such excluded from paying business rates altogether. Exemptions exist for hereditaments such as agricultural land and places of religious worship. 4 Exemptions are applied by the VOA.
	One such exemption is for hereditaments or parts of a hereditament used wholly for the training or welfare of disabled people. Under this exemption, schools or dedicated parts of schools, including private schools, which are adapted and catering specifically for disabled people may be exempt from business rates.