How Business Rates are calculated - 2008/2009

Key

BL  =  Base Liability
TCA  =  Transitional Chargeable Amount
NCA  =  Notional Chargeable Amount
SBRR  =  Small Business Rate Relief

Example 1

Premises with a rateable value at 1 April 2005 of less than £15,000 (rates increasing)

Annual amount payable in 2007/2008  =  £1,320.46 (BL)

1 April 2008 rateable value £4,800 x 45.8p  =  £2,198.40 (NCA)

Rates are increasing, therefore the maximum increase allowed is 19.37%

Transitional Chargeable Amount is £1,320.46 x 1.1937  =  £1,576.23 (TCA)

TCA is less than NCA, therefore amount payable is TCA  =  £1,576.23
add SBRR supplement (£4,800 x 0.004)  =      £19.20
total amount payable 2008/09 =  £1,595.43

If this property qualifies for SBRR, total amount payable for 2008/09 is £1595.43 / 2  =  £797.71

Example 2

Premises with a rateable value at 1 April 2005 of less than £15,000 (rates increasing)

Annual amount payable in 2007/2008  =  £2,321.79 (BL)

1 April 2008 rateable value £8,500 x 45.8p  =  £3,893.00 (NCA)

Rates are increasing, therefore the maximum increase allowed is 19.37%

Transitional Chargeable Amount is £2,321.79 x 1.1937  =  £2,771.52 (TCA)

TCA is less than NCA, therefore amount payable is TCA  =  £2,771.52
add SBRR supplement (£8,500 x 0.004)  =      £34.00
total amount payable 2008/09 =  £2,805.52

If this property qualifies for SBRR, total amount payable for 2008/09 is £2,771.52 / (10000 / 8500)  =  £2,356.74

Example 3

Premises with a rateable value at 1 April 2005 of less than £15,000 (rates reducing)

Annual amount payable in 2007/2008  =  £7,414.37 (BL)

1 April 2008 rateable value £14,250 x 45.8p  =  £6,526.50 (NCA)

Rates are reducing, therefore the maximum reduction allowed is 58.48%

Transitional Chargeable Amount is £7,414.37 x 0.4152  =  £3,078.47 (TCA)

TCA is less than NCA, therefore amount payable is NCA  =  £6,526.50
add SBRR Supplement (£14,250 x 0.004)  =      £57.00
total amount payable 2008/09 =  £6,583.00

If this property qualifies for SBRR, the total amount payable for 2008/09 is NCA  =  £6,526.50

Example 4

Premises with a rateable value at 1 April 2005 in excess of £15,000 (rates increasing)

Annual amount payable in 2007/2008  =  £9,255.99 (BL)

1 April 2008 rateable value £32,500 x 45.8p  =  £14,885.00 (NCA)

Rates are increasing, therefore the maximum increase allowed is 29.75%

Transitional Chargeable Amount is £9,255.99 x 1.2975  =  £12,009.65 (TCA)

TCA is less than NCA, therefore amount payable is TCA  =  £12,009.65
add SBRR supplement (£32,500 x 0.004)  =    £130.00
total amount payable 2008/09 =  £12,139.65

Example 5

Premises with a rateable value at 1 April 2005 in excess of £15,000 (rates reducing)

Annual amount payable in 2007/2008  =  £13,850.27 (BL)

1 April 2008 rateable value £19,000 x 45.8p  =  £8,702.00 (NCA)

Rates are reducing, therefore the maximum reduction allowed is 22.15%

Transitional Chargeable Amount is £13,850.27 x 0.7785  =  £10,782.43 (TCA)

TCA is greater than NCA, therefore amount payable is TCA  =  £10,782.43

add SBRR supplement (£19,000 x 0.004)  =    £76.00
total amount payable 2008/09 = £10,858.43