The 10 Basics to Property Business Rates
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- Category: Taxes
Business Rates are a form of tax paid for use of business premises, similar to paying council tax for use of residential property. This principle of work taxes originates back to Tudor times, with the current Business Rates system stemming from 1990, the basic principle being that a business pays a tax to the local authority for use of business property space that is proportional to how valuable that space is to them.So bigger and more in-demand locations will pay more, which although sounds fair in principle becomes complicated when you try and implement it. The government decided to re-value these amounts every 5 years to save more frequent re-assessments, with the last one technically being due in 2015 which is five years on...
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The world of VAT and tax can be confusing anyway, but certainly when you involve property interests it can get even more complicated, In actual fact, there is a fundamental difference that is often missed by parties which can suddenly unearth VAT liabilities and additional charges later on down the line.
With business property you have to pay business rates for your property as opposed to council tax with a residential property. Larger businesses tend to be used to these and factor them in with other property costs, whereas smaller and new businesses often don’t even realise they exist, and even if they do, they don’t necessarily realise how they should be correctly calculated and charged.