Uniform Business Rate

What is the Uniform Business Rate?

Local government is financed by a combination of centrally-administered funding and locally-administered charges and taxes.

The Uniform Business Rate is revenue source that combines local and national elements. It is a tax that is paid by occupiers and owners of commercial and industrial property to the local authority, but at a rate set by central Government.

The Government sets the rate in order to prevent wide disparities in charges stemming from widely differing rate bases between local authorities.

Local 'Collection Authorities' collect the Uniform Business Rate for their area and hand the money to central Government, which is then redistributed to councils in line with a population-based formula.


Background

The Uniform Business Rate was introduced in 1990, along with the community charge or 'poll tax', as part of the replacement of the old system of domestic and non-domestic rates.

The 'rateable value' of business premises is calculated by the Valuation Office Agency, based on what a property could have been let for in 1993. Each year, the Secretary of State (currently the Deputy Prime Minister) sets a 'national multiplier' for England and a separate one for Wales. The rateable value times the multiplier (which takes the form of a rate in the pound) is a property's Uniform Business Rate.


Controversies

The shift to the Uniform Business Rate in 1990 was deeply unpopular with businesses, as rental values had increased dramatically since the last full-scale non-domestic valuation in 1973.

The last revaluation took place in April 2000, based on rental values as at April 1 1998, and the next revaluation is due in April 2005. At the last revaluation, the Government allowed 'transitional limits' on the increases that businesses were expected to pay up to 2005.

Local authorities are keen to see control over Business Rates returned to them. Councils often accuse the Government of underfunding them through central grants that impose additional duties that they must fulfil.


Statistics

The types of properties not liable for Council Tax that are exempt from Business Rates are agricultural land and buildings, fish farms, churches and other places of worship, sewers, public parks, certain properties used for disabled people and swinging moorings for boats

The multiplier for 2008-2009 is 46.p in the £1 for properties over £15,000 and 45.8p in the £1 for properties under £15,000. In 2004-2005 it was 45.6p in the £1. In 2003-2004, it was 44.4p.

statistic 1: (Source: DCLG); Statistic 2: (Source: DTLR, 'Business Rates - A Guide', 2001); Statistic 3: (Source: ODPM Information Letters, November 2003 and December 2002)


Quotes

"For many local authorities the return of business rates to their control is a prime objective but it would be strongly resisted by business."

Royal Institution of Chartered Surveyors, October 2003