How Is Rateable Value Calculated?
A rateable value (RV) is the figure the HMRC Valuations Office assigns to your commercial property to determine your business rates bill.
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Understanding how it is calculated - and whether yours still reflects current conditions - is the first step to knowing whether you are paying the right amounts.
What is rateable value?
A rateable value (RV) represents the HMRC Valuation Office's estimate of the annual rent your property could have achieved on the open market at a specific valuation date.
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It is not your actual rent. It is a standardised figure used solely to calculate business rates.
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Your annual business rates bill is then calculated by multiplying this rateable value by a government-set figure called the multiplier.
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Rateable values are set nationally and listed in the HMRC rating list, which is publicly available. You can find your property's rateable value on your business rates bill or directly on the GOV.UK website.
How is rateable value calculated?
The HMRC Valuation Office calculates rateable value primarily using rental evidence gathered from comparable properties. The key factors it considers include:
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Comparable rental evidence from similar properties in the area.
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Lease terms and rent review patterns.
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Property size and layout.
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Location and accessibility.
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Market demand at the valuation date.
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Property type and permitted use.
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For some specialist properties where open-market rental evidence is limited, the HMRC Valuations Office uses alternative methods:
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Turnover-based assessments - used in some retail and hospitality contexts, particularly larger or destination properties.
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Contractor's basis valuation - used for properties rarely let on the open market, such as schools and public buildings. The cost of constructing the property is used as a proxy for rental value.
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Receipts and expenditure method - used for properties like hotels and leisure facilities where trading income drives rental value.
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Different sectors are assessed using different methodologies. See sector-specific guides below.
How to work out your business rates bill?
The formula is straightforward:
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Rateable Value x Multiplier - Annual Business Rates (before reliefs).
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The multiplier is set each year by central government. In England there are five categories:
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Small Business Retail, Hospitality, and Leisure (RHL) Multiplier: 38.2p (for properties with an RV under £51,000.
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Small Business Non-Domestic Multiplier: 43.2p (for properties with an RV under £51,000).
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Standard Retail, Hospitality, and Leisure (RHL) Multiplier: 43.0p (for properties with an RV between £51,000 and £499,999).
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Standard Non-Domestic Multiplier: 48.0p (for properties with an RV between £51,000 and £499,999).
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High-Value Non-Domestic Multiplier: 50.8p (for all properties with an RV of £500,000 above).
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Always check GOV.UK for your current year's figure before calculating your liability.
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Worked example:
A retail until has a rateable value of £28,000. The small business retail, hospitality, and leisure (RHL) Multiplier applies.
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If the current small business RHL multiplier is 38.2p in the pound then:
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£28,000 x 0.382 = £10,696 per year before any reliefs.
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If the same property qualifies for any relief then the final bill would be reduced further.
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Note: multipliers are updated each April. Verify the current figures at GOV.UK or with your local council.
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​If your rateable value is £15,000 or below and this is your only business premises, you may qualify for Small Business Rate Relief (SBRR), which can reduce your bill to zero.
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How to find your rateable value:
Your rateable value can be found in three places:
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Your business rates bill - printed on the front of every bill issued by your local council.
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The HMRC valuation office's Find a Business Rates Valuation service - available at GOV.UK. Search by postcode or property address to view your current rateable value and the supporting valuation details.
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Our free rateable value checker - check your rateable value here, which also indicates whether your assessment may be higher than comparable properties in your area.
What is the valuation date?
Each revaluation is based on a specific antecedent valuation date - a fixed point in the past at which rental evidence is gathered. The most recent revaluation, which took effect on 1 April 2026, used a valuation date of 1 April 2024
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This means your rateable value reflect rental market conditions from April 2024, not today. If market rents in your area have fallen since then, your rateable value may no longer accurately reflect what the property could achieve on the open market.
Is rateable value calculated differently for residential properties?
Rateable values apply to commercial and non-domestic properties. Standard residential properties - home and flats - do not have a business rates rateable value and are subject to council tax instead.
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However, there are some important excemptions:
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Mixed-use properties - where part of a building is used commercially, such as a flat above a shop, the commercial element will carry its own rateable value.
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Holiday lets and short-term rentals - properties available to let for more than 140 days per year and actually let for more than 70 days may be assessed for business rates rather than council tax.
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Care homes and specialist residential facilities - these are assessed for business rates, typically using the receipts and expenditure method rather than standard rental comparison.
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If you are unsure whether your property should have a ratable value, the HMRC Valuation Office's rating list is the authoritative reference.
Why rateable values can become outdated:
Even after a revaluation, a rateable value can drift out of line with actual market conditions. Common reasons include:
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Market rents in the area falling after the valuation date.
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Structural changes to the property.
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Changes in local infrastructure or access, such as road closures or nearby construction.
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Increased vacancy rates in the surrounding area.
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Sector-wide trading pressure not reflected in the fixed valuation date evidence.
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In some cases, a physical or environmental change to the property may qualify as a Material Change of Circumstances (MCC), which can allow a review outside of the normal revaluation cycle. See our MCC guide for more detail.
Sector-Specific Valuation Methods
The HMRC Valuations Office uses different valuations approaches depending on property type:
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​Retail - typically valued by comparing rental evidence from similar rental units in the area.
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Hospitality and leisure - often assessed using trading potential or the receipts and expenditure method.
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Industrial and warehousing - relies heavily on floor area, eaves height, and location.
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Offices - assessed based on a per-square-foot rental basis, adjusted for location, floor level, and specification.
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Healthcare and specialist assets - typically use the contractor's basis or bespoke methods, as open-market evidence is limited.
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You can explore sector-specific guidance here:
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When Should You Review Your Rateable Value?
Consider reviewing your rateable value if:​
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Market rents in your area have fallen since April 2024.
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Your sector has experienced significant trading pressure.
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A comparable property nearby appears to have a lower assessment.
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Your property has changed structurally or in terms of access.
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You have recently taken on the lease and the valuation looks inconsistent with your rent.
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A free eligibility check can indicate within a minute whether your property may be over-assessed based on publicly available HMRC Valuation Office data.​
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If you have decided a challenge is appropriate, see our Business Rates Appeal guide