How a rates bill is actually built
Two numbers make your bill. The rateable value is the Valuation Office Agency’s estimate of the annual rent the property would fetch on the open market, and it was reset on 1 April 2026 on rental values as at 1 April 2024. The multiplier is pence in the pound, set by government. Multiply them together and you have the bill before any relief.
From April 2026 there are five multipliers rather than two: 38.2p and 43p for retail, hospitality and leisure property below and above a £51,000 rateable value, 43.2p and 48p for everything else, and 50.8p for any property at £500,000 or more whatever it is used for.
Why you do not get the retail rate
From 1 April 2026 there are two permanently lower multipliers for retail, hospitality and leisure property — 5p below the ordinary rates. A yard, workshop, storage unit or builder’s merchant counter does not get them: warehouses and storage are excluded, and a workshop is not a shop.
That is not an oversight to appeal. The published guidance excludes these uses by name, and the test is the use of the property rather than the size or type of the business. The shop two doors down pays 5p in the pound less than you do on the same rateable value, permanently.
What is worth your attention instead is the rateable value itself, and small business rate relief. For most trades the relevant question is not the multiplier at all — it is whether small business rate relief wipes the bill out completely, which for a single small unit it often does.
Small business rate relief is the one that matters most
Below a £12,000 rateable value there is nothing to pay. Between £12,000 and £15,000 relief tapers away in a straight line. Above £15,000 there is none. It applies to one property, with narrow exceptions for additional properties under £2,899 rateable value where the total stays under £20,000, or £28,000 in London — and if you took on a second property you keep relief on the first for twelve months, extended to thirty-six months where it was taken on from 27 November 2025.
Relief is not always applied automatically. If you believe you qualify and you are being billed, apply to the billing authority; it can usually be backdated.
Working from home does not usually create a rates bill
Using a room as an office, or keeping the van and some tools at the house, does not normally make part of your home rateable. It changes if part of the property is used only for the business and is not used domestically — a converted garage kitted out as a workshop, or a building in the garden used solely for the trade. That part can be assessed separately, and it can also affect the private residence relief position when you sell.
One unit, and usually nothing to pay
A single small unit or yard under a £12,000 rateable value attracts 100% small business rate relief. Plenty of sole traders and small limited companies with one unit pay nothing and do not realise relief has to be claimed. If you are getting a bill on a small unit, that is the first thing to check — and it can usually be backdated.
Take a second yard and the relief position changes immediately, which is worth knowing before you sign, not after.
If the assessment looks wrong
The rateable value is challengeable through the Check, Challenge and Appeal process, and the ground is that the valuation does not reflect the property. Floor areas measured wrongly, space you no longer occupy, or a layout from before the last refit are all ordinary reasons. Rates agents will cold-call you offering to do this on a contingent fee; some are good and some are not, and the ones that ask for money up front are not.