How Rateable Values Are Calculated
Rateable values are used to determine business rates liability in England and Wales. They are based on an assessment of the property's annual rental value at a specific valuation date.
Understanding how rateable values are calculated can help you determine whether your assessment may no longer reflect current market conditions.
What Is A Rateable Value?
A rateable value (RV) represents the Valuation Office Agency's estimate of the annual rent a property could have achieved on the open market at the valuation date.
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It is not your actual rent.
It is a standardised rental assessment used to calculate business rates.
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Your annual business rates bill is then calculated by applying a multiplier to this rateable value.
What Evidence Is Used To Calculate Rateable Value?
The Valuation Office Agency (VOA) typically considers:
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Comparable rental evidence.
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Lease terms.
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Property size and layout.
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Location.
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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, alternative valuation approaches may be used, included:
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Turnover-based assessments.
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Contractor's basis valuation.
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Receipts and expenditure method.
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Different sectors are assessed using different methodologies.
What Is The Valuation Date?
Each revaluation is based on a specific "antecedent valuation date".
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This means rateable values are calculated using rental evidence from a fixed point in time - not today's market conditions.
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If the market rents have fallen since that valuation date, your rateable value may no longer reflect achievable rental levels.
Why Rateable Values Can Become Outdated
Rateable values can become misaligned due to:
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Market downturns.
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Shifts in demand.
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Lease incentives not reflected in historic data.
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Changes in property use.
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Structural alterations.
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Increased local vacancy rates;
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Even small differences in rental evidence can have a meaningful impact on long-term rates liability.
How Business Rates Are Calculated From Rateable Value
Business rates liability is calculated using:
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Rateable Value X Multiplier = Annual Business Rates
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The multiplier is set nationally and may vary depending on property size and relief status.
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Relief schemes may then reduce the final bill.
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However, the underlying rateable value remains the foundation of the calculation.
When Should You Review Your Rateable Value?
You may wish to investigate further if:​
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Market rents in your area have fallen.
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Your sector has experienced trading pressure.
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Comparable properties appear assessed differently.
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You have recently taken occupation.
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Operational use has changed.
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A structured eligibility check can help determine whether further review may be appropriate.
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Sector-Specific Valuation Methods
Different sectors are valued using different approaches.
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For example:
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Retail properties are typically valued using rental comparison.
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Hospitality properties may reflect trading potential.
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Industrial properties rely heavily on floor area and location.
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Healthcare and specialist assets may use bespoke methods.
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You can explore sector-specific guidance here:
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