Can I be charged business rates and council tax on the same property?

Yes — and it's more common than you might think. If you run a business from a property that's also your home, the VOA may decide that part of it should be assessed for business rates while the rest remains subject to council tax. This typically happens when a part of the property is used exclusively for business purposes — a ground-floor consulting room, a studio with a separate entrance, or a space where clients regularly visit. In that situation, your council tax bill may also be reduced to reflect the fact that part of the property is no longer classed as domestic. The key word is "exclusively" — occasional or incidental business use generally won't trigger a split assessment. If you're unsure how your property is classified, the VOA can advise.

Do I pay business rates if I rent a desk in a coworking space?

No. If you're renting a hot desk, a dedicated desk, or even a private office within a managed coworking space, business rates are the responsibility of the space operator — not you. It's one of the less obvious financial advantages of flexible working arrangements. The operator pays business rates on the building as a whole and factors that cost into their membership pricing, so it's already covered in what you pay each month. This is worth remembering when you're comparing the true cost of a coworking membership against a conventional office lease, where business rates would be an additional line on top of your rent.

Are business rates tax deductible?

Yes. Business rates are considered an allowable business expense, which means you can deduct them from your profits when calculating your Corporation Tax or Income Tax liability. Keep records of what you've paid, and make sure your accountant includes them in your annual accounts. If you receive a business rates relief that reduces your bill, only the amount you actually pay is deductible — not the original figure before relief. It's a relatively straightforward deduction, but it's one that's easy to overlook if you're not on top of your business expenses. If business rates are bundled into a single monthly payment as part of a serviced office contract, it's worth asking your provider for a breakdown so you can account for them correctly.

Can my rateable value go down as well as up after a revaluation?

Yes. A revaluation reflects changes in the property market since the last assessment date, and if rental values in your area have fallen — or if your property type has become less desirable — your rateable value could decrease. That said, revaluations don't automatically mean lower bills for everyone. In areas where commercial property values have risen, rateable values will increase, and bills will follow. The 2023 revaluation saw significant increases for properties in high-demand locations, particularly in Central London. If you think your new rateable value doesn't accurately reflect your property's market rental value, you can challenge it through the VOA's Check, Challenge, Appeal process — and a revaluation is often the prompt that makes it worth doing.

Do business rates change if I refurbish or extend my office?

They can. If you make significant changes to your property — extending the floorspace, adding a mezzanine level, or substantially improving the fit-out — the VOA may reassess the rateable value to reflect the property's new condition and market rental value. A higher rateable value means a higher business rates bill. Minor internal refurbishments are less likely to trigger a reassessment, but structural changes or extensions almost certainly will. It's worth factoring potential business rates increases into your budget before committing to significant works — especially if you're already close to a threshold that affects your eligibility for small business rate relief.

Are business rates payable on a listed building?

Yes. Being listed doesn't exempt a property from business rates. Listed buildings are assessed for rateable value in the same way as any other commercial property. However, the listed status of a building may be taken into account during the valuation process, since it can affect what a tenant would be willing to pay in rent — listed buildings often come with restrictions on how they can be used and altered, which can influence their market rental value. If you're taking on a listed building, it's also worth checking whether any other reliefs apply, such as charitable relief or hardship relief, depending on your situation. Your local council is the best first point of contact for advice specific to your property.

Your Complete Guide to UK Business Rates

If you’re planning your next office move, reviewing costs, or setting budgets for 2026, business rates will be high on your list.

And they should be.

Business rates in the UK can be one of the biggest ongoing costs attached to your office space. Get them wrong, and your “great deal” on rent suddenly doesn’t feel so great. Get them right, and you’ll protect your budget and give your team the stability they deserve.

What are business rates in the UK?

Business rates are a tax on non-domestic properties — essentially the commercial equivalent of council tax. Local authorities collect them and use the revenue to fund local services.

If your business occupies a physical space (an office, a shop, a warehouse), business rates are likely part of the picture.

The amount you pay is based on 2 things: the rateable value of your property, and the government's multiplier for that year. More on how that works below.

Which properties are business rates charged on?

Business rates apply to most non-domestic properties used for business purposes, including:

Offices
Shops
Warehouses
Factories
Pubs
Holiday rental homes and guest houses

Some properties are exempt — farm buildings, for example. HMRC publishes a full list of exempted buildings if you want to check. Most office spaces, however, don't qualify for exemption.

Diagram showing which types of properties business rates are payable on

Are business rates and council tax the same?

They're similar in structure, but they're separate taxes that apply to different types of property. Council tax is charged on domestic properties — where people live. Business rates are charged on non-domestic properties — where people work, trade, or operate. Both are collected by local authorities and used to fund local services, but the rates, calculations, and reliefs are entirely different. So if you run a business from a commercial premises, you'll pay business rates. If you live above the shop, you'll pay council tax on the residential part separately.

Are business rates subject to VAT?

No. Business rates fall outside the scope of UK VAT, which means you won't be charged VAT on your bill and you can't reclaim VAT on them either. This is worth bearing in mind when you're budgeting, as business rates are a straight cost with no VAT offset available.

Are business rates paid monthly?

By default, your local council will split your annual bill into 10 monthly instalments, running from April to January — leaving February and March payment-free. But if you'd prefer to spread the cost more evenly across the year, you can request 12 monthly instalments from your local authority instead. It's a small change, but it can make cash flow forecasting a little more straightforward — particularly useful if you're an early-stage business keeping a close eye on monthly outgoings.

Do I have to pay business rates in the UK?

The short answer: if your business occupies a non-domestic property in the UK, yes — you'll almost certainly need to pay business rates.

The occupier is responsible for payment, not the landlord. Even if your landlord has agreed to cover business rates as part of your lease, the bill is legally in your name. If it goes unpaid, the local authority will come to you, not them. Always double-check what's included in your lease before signing.

There are a couple of scenarios where business rates work a little differently:

Serviced or all-inclusive offices: If you're in a fully serviced office space on a managed contract, business rates are typically bundled into your monthly fee. No separate bill to worry about.
Conventional office leases: Business rates are charged on top of rent. This is worth factoring into your total cost of occupation when comparing office spaces — at Tally, we use a cost comparison table to make sure you can see exactly what's included and what isn't.
Empty properties: Business rates are still payable on vacant commercial properties. You get a 3-month grace period rate-free, but after that, full rates apply. If your property becomes empty, you need to notify your local council.

What if I work from home?

Whether you need to pay business rates on your home depends on how you use it. If you occasionally check emails from the sofa or take the odd call from your kitchen table, you're almost certainly fine — HMRC doesn't consider that business use.

But if part of your home is used exclusively for business purposes (a dedicated studio, a room that's set up solely as an office, or a space where clients regularly visit), the Valuation Office Agency may assess that part of your property for business rates. In that scenario, you could end up paying both council tax and business rates — on the same property. If you're in any doubt, it's worth speaking to your local council before you find yourself with an unexpected bill.

How do business rates differ across England, Scotland, Wales and Northern Ireland?

Business rates are a devolved matter, which means the rules aren't identical across all 4 nations.

In Scotland, business rates are administered by local councils but the multiplier is set by the Scottish Government — and Scotland has its own version of small business relief, called the Small Business Bonus Scheme, which is generally more generous than the equivalent in England.

In Wales, the Welsh Government sets the multiplier and manages its own relief schemes, including a Small Business Rates Relief scheme with different thresholds.

Northern Ireland operates a different system entirely — instead of rateable values based on rental estimates, Northern Ireland uses capital values to calculate rates, and bills are split between a regional rate and a district rate.

So if your business operates across multiple nations, or you're weighing up office locations in different parts of the UK, it's worth checking the specific rules for each region rather than assuming the same figures apply everywhere.

What is happening to business rates in 2026?

2026 is a significant year for business rates in England. The government has introduced a series of changes that will affect how much businesses pay — particularly in the retail, hospitality, and leisure sectors, and for properties in high-value areas.

Here's what's changed:

New multipliers from April 2026. The government has introduced updated multipliers for the 2025–26 financial year. For properties with a rateable value below £51,000, the small business multiplier is 49.9 pence. For properties above £51,000, the standard multiplier is 55.5 pence — a notable increase from previous years.
Retail, hospitality and leisure (RHL) relief reduced. The RHL relief — which had been providing significant discounts for businesses in these sectors — has been reduced from 75% to 40% from April 2025 onwards, with a cap of £110,000 per business. If your business falls into this category, your bill will be higher than it was last year.
Transitional relief continues. The government's transitional relief scheme is still in place to soften the impact of large rate increases year on year. It phases in bill changes gradually, so you shouldn't see a dramatic spike overnight.
Long-term reform plans. The government has committed to wider business rates reform over the coming years, with a focus on making the system fairer for high street businesses and reducing the burden on smaller operators. Revaluations are now set to happen every 3 years rather than every 5, with the next revaluation due in 2026.

If you're in the process of choosing office space, these changes are worth factoring into your budget. Our office space calculator can help you estimate the right size of space for your team — because the size and layout of your office directly affects your rateable value.

How are business rates worked out in the UK?

Business rates are calculated using a straightforward formula:

Rateable value × multiplier − any reliefs or deductions = business rates payable

Let's break that down.

What is rateable value?

The rateable value is an estimate of what your property could be rented for on the open market on a specific date. It's set by the Valuation Office Agency (VOA) and takes into account the property's size, location, and condition.

You can look up the rateable value of any property using HMRC's tool.

Rateable values are reviewed periodically through revaluations. The most recent revaluation came into effect on 1 April 2023, based on market values from 1 April 2021. The next revaluation is due in 2026.

What is the multiplier?

The multiplier is the figure the government sets each year, expressed in pence per pound of rateable value. For 2025–26:

Properties with a rateable value below £51,000: 49.9 pence
Properties with a rateable value above £51,000: 55.5 pence

Step-by-step: How to calculate your business rates

Step 1. Find your property's rateable value using HMRC's search tool.

Step 2. Identify the correct multiplier for your property's rateable value.

Step 3. Multiply the rateable value by the multiplier.

Step 4. Deduct any business rate reliefs you're eligible for.

Business rates are calculated as Rateable value x Multiplier - Deductions & reliefs

Example calculation for 2025–26

Sally’s office has a rateable value of £60,000. Because this is above £51,000, the standard multiplier of 55.5 pence applies.

Rateable value: £60,000
Multiplier: £0.555
Business rates before relief: £60,000 × £0.555 = £33,300
Sally has no applicable reliefs, so £33,300 is payable for the year

When do you pay business rates?

Local councils send out business rates bills in February or March each year, covering the following tax year. Payment runs on a 10-month cycle by default, but you can request 12 monthly instalments from your local authority — which can make budgeting a bit easier.

What business rate reliefs are available?

There are several reliefs available that could reduce — or even eliminate — your business rates bill. Here are the main ones:

Small business rate relief

If your property has a rateable value below £12,000 and you only use 1 property, you pay no business rates at all. If your rateable value falls between £12,000 and £15,000, you'll get a sliding scale of relief. Above £15,000, full rates apply — but other reliefs may still be available.

Retail, hospitality and leisure relief

As noted above, this relief has been reduced to 40% from April 2025, with a cap of £110,000 per business. If you're in retail, hospitality or leisure, it's still worth claiming — it just covers less than it did previously.

Enterprise Zone relief

Businesses in designated Enterprise Zones can receive business rate discounts of up to £55,000 per year for up to 5 years (up to £275,000 in total). There are 48 Enterprise Zones across the UK covering a range of sectors and regions. Worth checking if your location qualifies.

Transitional relief

This limits how much your bill can increase in a single year following a revaluation. It's applied automatically, so you don't need to apply.

Charitable rate relief

Charities using a property for charitable purposes can apply for up to 80% relief. Non-profit organisations may also be eligible for discretionary relief — contact your local council to find out.

Other available reliefs

Additional reliefs include rural rate relief, hardship relief, local newspaper relief, and nurseries discount.

The full list is on HMRC's business rates relief page. If you're unsure what you're eligible for, your local council is the best starting point.

Can I get business rates relief if I've just moved into a property?

Moving into a new commercial property doesn't automatically trigger any special relief — but it does make it the right moment to review what you're eligible for. As soon as you move in, you become liable for business rates from day one, so it's worth contacting your local council promptly to register as the new occupier and get your bill set up correctly.

From there, the reliefs available to you are the same as for any other occupier — small business rate relief, retail hospitality and leisure relief, Enterprise Zone relief, and so on. What changes is the urgency: if you're moving into a property for the first time, you might not yet know what your rateable value is, whether it's accurate, or whether you qualify for relief. That's worth sorting out early.

If you think the rateable value has been set incorrectly — perhaps it reflects a previous tenant's use of the space, or the property has changed significantly — you can challenge it through the VOA's Check, Challenge, Appeal process. Getting this right at the start of your tenancy is much easier than trying to reclaim overpaid rates further down the line.

Can I appeal my business rates?

Yes. If you think your rateable value is wrong, you can challenge it through the VOA's Check, Challenge, Appeal process.

Start by gathering evidence — rental values for comparable properties nearby, recent sales data, or anything that supports a lower valuation. Submit your challenge to the VOA, and if you're not satisfied with the outcome, you can escalate to a formal appeal.

You don't need a representative to do this. But if you want professional support, members of the Royal Institution of Chartered Surveyors (RICS) specialise in this area.

Are business rates payable on vacant office space?

Business rates are normally payable even if a property is unoccupied.

For the first 3 months, you don't have to pay business rates, but after this period, most businesses pay full business rates.It is your responsibility to contact your local council and notify them if your property is vacant.

What happens if I don't pay my business rates?

Missing a business rates payment isn't something to ignore. Local councils take non-payment seriously, and the process escalates fairly quickly. If you miss an instalment, your council will send a reminder notice giving you 7 days to pay. Miss that deadline, and you lose the right to pay in instalments — the full outstanding balance for the year becomes due immediately.

If that remains unpaid, the council can apply to a magistrates' court for a liability order, which gives them the legal authority to recover the debt. From there, they can instruct enforcement agents (bailiffs) to seize business assets, deduct money directly from your income if you're a sole trader, or — in the most serious cases — pursue bankruptcy or winding-up proceedings.

The important thing to know is that there's usually a way through if you're proactive. If you're struggling to pay, contact your local council before you miss a payment, not after. Most councils have hardship relief available for businesses in genuine financial difficulty, and many will work with you on a payment arrangement rather than go straight to enforcement. The worst thing you can do is ignore the bill and hope it goes away. It won't, and the consequences get significantly more serious the longer it's left.

Where should I go for advice on business rates?

You do not need a representative to dispute your rateable value or bill.

However, if you're seeking advice members of the Royal Institution of Chartered Surveyors (RICS) are a good place to start as they are qualified in the area.Navigating the complexities of UK business rates can feel overwhelming, especially when you're focused on steering your business toward success.But with the right knowledge and tools at your disposal, you can make informed decisions that help you manage your office space costs effectively.Whether you're just starting out or managing a large portfolio, understanding how business rates impact your budget is crucial.

At Tally Workspace, we're here to simplify this process for you. From cost comparison tables to expert advice, we ensure you have all the information you need to choose the best office space for your business — without any hidden surprises.

Getting business rates right from the start

Choosing the right office space affects more than just your rent. The size, location, and type of space directly influences your rateable value — and therefore your business rates bill.

At Tally Workspace, we help startups and scale-ups find office spaces that work for their teams and their budgets. That means being upfront about all costs, including business rates, so there are no surprises further down the line.

Find your next office with Tally Workspace and know exactly what you're paying for from day one.

UK Business Rates 2026: How They're Calculated, What's Changing & How to Pay Less

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