National Non Domestic Rates (NNDR).

NNDR or Business Rates is a form of taxation levied on the occupier of commercial premises. It was introduced on 1st April 1990 replacing the former General Rate system.

Under the 'Old' system, rates were set, collected and spent locally, whereas under the National Non Domestic Rates system the rate (rate in the pound or multiplier) is set by central government. The rates are collected by local authorities on behalf of central government and re-distributed to local councils.

The present Rating List is effective from 1st April 2005 and contains the Rateable Values upon which National Non Domestic Rates are levied.

Rate Liability

The amount you pay in rates is primarily based on two factors. The Rateable Value (RV) of the property you occupy, and the non domestic rating multiplier - sometimes referred to as the UBR (uniform business rate). The starting point for calculating your rate liability is simply the RV x the multiplier. This is known as the True or Notional Liability. However, there is a lot more to rate liability which is why it is highly recommended that you seek professional advice from a qualified rating surveyor in all aspects of your business rates.

Rateable Value

The rateable value of your property is set by the Valuation Office Agency. There is a revaluation every five years - the latest one coming into effect from 1st April 2005. You can appeal against the rateable value by submitting a proposal to the VOA - there is no cost and very little skill required to submit a proposal - however, dealing with the proposal and the appeal and the valuation and the negotiation and the agreement or withdrawal should really be left to an experienced rating surveyor.

The Rateable Value is only one part involved in your final rate liability. There are circumstances whereby a reduction in rateable value can actually increase the amount you pay.

Transitional Arrangements

Transitional Relief was introduced in 1990 to cushion the impact of large increases in rate liability due to Revaluation. Since then, there has been a Transitional Relief scheme in place for every Revaluation - 1995 - 2000 - and most recently 2005.

Any ratepayer whose rate liability increases by more than a certain level as a result of Revaluation will have their liability capped at an upper limit. The upper limit is determined by applying a percentage increase to the rate liability for the previous year.

The percentage increases for each year are set at the start of each rating list and are designed so that relief decreases over the life of the list so that the ratepayer will eventually pay 'True' liability.

To make the scheme self-financing, a Transitional 'Surcharge' or 'Premium' is payable by those ratepayers whose rate liability has decreased by more than a prescribed level.

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