17 December 2025
Table of contents
Table of contents
The hidden truth is that lots of businesses can reduce the amount of business rates they pay, as long as the property meets the business rates relief criteria. Don’t try to read that sentence aloud with a mouthful of toffees.
Before you get stuck in, this article deals with business rates and relief in England. The rules are slightly different for properties located in Scotland, Wales, and Northern Ireland.
Business rates are a type of tax charged by local councils on properties which aren’t used for residential purposes. It’s sort of like the Council Tax you pay on your home, but for commercial premises such as shops and offices.
No, you won’t usually need to pay business rates if you work or run a business from part of your home (such as an office in the spare room), but it’s still mainly a home, or if you sell things by post.
You might need to think about business rates if your property has dual usage. HMRC gives the example of someone who lives above their shop.
Business rates might also be due if you sell goods or provide services to clients who visit your property, or if you employ someone else who comes to work at your property.
Yes! Whatever you end up paying for business rates is classed as an operating expense. You’ll be able to deduct this as an expense when it’s time to pay your tax bill.
So as ever, keep very good records to make sure you claim everything you’re entitled to!
The property’s rateable value is set by the Valuation Office Agency. This value is multiplied by a national multiplier, which the government sets each year from 1st April. This will give you your business rates bill for the year. It might be possible to reduce it if the property is eligible for relief. Which we’ll get to next.
Business rates relief is available depending on the size of the property, and its use. There are loads of different types of relief available, so we’ll go into detail about the more common ones.
You won’t pay business rates on a property with a rateable value below £12,000 anyway. The amount of relief available between £12,001 and £15,000 tapers from 100% to 0%.
Generally speaking, you can claim small business rate relief if your business only uses one property, and that property’s rateable value is less than £15,000.
If your business does use multiple properties, you might still be able to get relief on your main one as long as:
If eligible for retail, hospitality and leisure relief, you might be able to get 40% off up until 31st March 2026 if your business is being used as a:
This type of relief won’t be available from 1st April 2026, but you might be able to claim ‘supporting small business relief’ instead.
If your business is in an eligible rural area with a population below 3,000, you could be entitled to rural rate relief. There are certain criteria your business needs to meet, though.
For example, it must be:
Now, if it’s the case that there’s more than one business in the area, they can all still apply as long as they’re different types of businesses.
The property must also be occupied and in use.
Last but not least, you can claim for charitable rate relief if your property is used by either:
Unfortunately, you can’t get charitable rate relief and small business rate relief at the same time. It’s up to your local council to decide which you’re eligible for.
We’ve gone through the “main” types, but there are other ways you might still be eligible for relief. For example, if:
It’s always worth checking whether or not you’re in a position to claim for anything – even if you’re not sure.
The gov.uk website covers everything and your local council website should both have full details of what’s available. Or give them an actual real life phone call if you’re feeling brave.
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A content writer who enjoys writing in a way that’s fun and engaging, while still being informative and useful to everyday people. I also enjoy writing creatively.
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