Local Government Business Rates: Everything Landlords and Investors Need to Know

Business rates can be defined as a tax on property used for business purposes. Therefore, it’s vital that landlords in the commercial property space are aware of the various local government business rates they may be subject to. In this blog, we will outline everything landlords need to know about the taxes they may face from local authorities and councils.

What are local government business rates and which businesses have to pay them?

Business rates (sometimes known as commercial rates) help local councils to fund the services they provide to their community. Examples include policing or waste management. Most non-domestic properties will need to pay business rates. These can include offices, shops, pubs, factories, and warehouses. However, holiday rentals or buy-to-let properties can also incur business rate charges.

Sometimes, business rates are charged when only a small part of the building is used for non-domestic purposes. Residential flats with pubs underneath them may fall into this category. Therefore, make provisions within your business model to ensure you’re able to afford local government business rates.

In a similar fashion to council tax, business rates are paid in ten equal instalments throughout the year. If you miss a payment, you will need to make bigger payments to cover the outstanding amount. This can quickly put a budget under pressure, so make sure you keep on top of things.

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