For businesses occupying commercial property, rent is only one part of the true cost of occupation. Business rates can represent a significant additional expense and should be considered alongside rent, service charges, utilities, insurance and other property costs.
Whether you are moving into a new office, warehouse or industrial unit; reviewing your existing premises or; managing a portfolio of locations, understanding your business rates liability can help you budget more accurately and in turn identify potential opportunities for savings.
Who Pays Business Rates on a Commercial Property?
In most cases, the occupier of a commercial property is responsible for paying the business rates.
This means that if your business rents an office, warehouse, industrial unit, shop or other commercial premises, you will usually be responsible for the rates bill in addition to the rent and other occupational costs.
This makes it important to investigate business rates before committing to new commercial premises, rather than simply focusing on the headline rent.
How Are Business Rates Calculated?
Business rates are based primarily on the property’s rateable value and the applicable business rates multiplier.
In simple terms:
Rateable Value × Applicable Multiplier = Basic Business Rates Liability
Any applicable reliefs or reductions are then considered.
Your rateable value is not the same as either the rent you currently pay or your final business rates bill.
The 2026 Business Rates Revaluation
New rateable values came into effect on 1 April 2026, meaning businesses should understand how the latest assessment affects their property costs.
Changes in local rental markets mean that rateable values (and therefore potential liabilities) can vary significantly between properties and locations.
For businesses occupying multiple premises, reviewing the new assessments across an entire property portfolio can be particularly important.
Could Your Business Be Eligible for Business Rates Relief?
Depending on your business, property and circumstances, you may be eligible for business rates relief.
This can include relief for certain small businesses and qualifying properties, as well as relief associated with particular circumstances or changes to a property.
Businesses undertaking qualifying improvements may also be eligible for Improvement Relief, helping prevent qualifying improvements from immediately increasing their business rates liability for the relief period.
Eligibility should always be assessed against the individual property and occupier.
Should You Review Your Rateable Value?
If you believe your property’s rateable value does not accurately reflect the premises, it may be worth obtaining specialist advice.
A review can consider the property, its use and the basis of the existing assessment to establish whether further investigation or a challenge may be appropriate.
This can be particularly relevant following a revaluation or where there have been significant changes affecting the property.
Consider Business Rates Before Taking New Premises
When comparing commercial properties, businesses should look beyond the advertised rent.
The true occupational cost can include:
Rent + Business Rates + Service Charge + Utilities + Insurance + Fit-Out + Other Property Costs
At TGE Property, we consider the wider costs associated with commercial premises when helping businesses search for and acquire property.
Where specialist rating advice is required, we can also connect clients with experienced business rates advisers who can assess the property’s rating position in greater detail.
Need Advice on Your Commercial Property Costs?
Whether you are reviewing an existing property or searching for new commercial premises, TGE Property can help you understand your wider property costs and access specialist business rates advice where required.
Contact TGE Property to discuss your commercial property requirements.