Rateable value is calculated by estimating a property's open market annual rent at a fixed valuation date, then adjusting that figure using one of three VOA valuation methods depending on the property type. You can approximate your own figure with rental comparables and net internal area, but the VOA's published valuation is what your bill is based on until it's successfully challenged.
- Rateable value is calculated from open market rent at a fixed valuation date, not today’s rent.
- Most shops, offices and industrial units use the rentals comparison method: rent per square metre times net internal area.
- Specialist properties like schools and care homes use the contractor’s basis; pubs and hotels use receipts and expenditure.
- The 2026 rating list is based on rental evidence from 1 April 2024, effective from 1 April 2026.
- Appeal My Rates UK checks VOA figures against comparable evidence before lodging a formal challenge.
Why this matters
Your business rates bill is rateable value multiplied by the government's annual multiplier, minus any relief. Get the rateable value wrong and every subsequent bill is wrong too, sometimes for three years at a stretch. Most business owners never check the VOA's working, they just pay what's on the demand notice.
The 2026 revaluation makes this a live issue right now. Rateable values effective from 1 April 2026 are based on rents surveyed at 1 April 2024, so if your local market moved sharply between 2021 and 2024, your new figure could be very different from the old one. Understanding the calculation is the first step before you decide whether Appeal My Rates UK or another surveyor should look at your case.
How to calculate rateable value
The Valuation Office Agency (VOA) sets rateable value as the estimated annual rent a property would achieve on the open market at a set valuation date, assuming a standard set of terms (full repairing and insuring, vacant, ready to occupy). For the current 2023 rating list, that valuation date is 1 April 2021. For the 2026 rating list, it moves to 1 April 2024.
To build a manual estimate for most commercial property, work through these steps:
- Identify the correct valuation method for your property type (see the table below).
- Gather rental comparables — actual lettings of similar properties in your area, agreed around the antecedent valuation date, not today.
- Measure the net internal area (NIA) in square metres, following the RICS Code of Measuring Practice.
- Apply zoning for retail — front-of-shop space (Zone A) is valued higher per square metre than back-of-house space, because it drives footfall and sales.
- Adjust for age, quality and location relative to your comparables — a 1960s industrial unit won't match a 2020s equivalent rent for rent.
- Multiply the adjusted rate by area to reach your estimated rateable value, then cross-check it against the VOA's published figure and nearby comparable assessments.
| Method | Typical property types | Basis of calculation |
|---|---|---|
| Rentals comparison | Shops, offices, industrial units, warehouses | Rent per square metre from comparable lettings x net internal area |
| Contractor's basis | Schools, care homes, fire stations, hospitals | Notional cost of rebuilding the property, decapitalised to an annual rental equivalent |
| Receipts and expenditure | Pubs, hotels, cinemas, holiday parks | Percentage of trading potential (fair maintainable turnover), not floor area |
Most retail, office and industrial appeals hinge on the rentals comparison method, which is why the retail sector produces the highest volume of challenges. If you run a shop, a retail rates consultant will already hold a database of Zone A rents for your local high street, which is the single hardest input to source manually.
Rentals comparison method: the most common calculation
This is the default method for anything with an active rental market. The VOA collects actual lease agreements, strips out any special terms (rent-free periods, premiums, turnover top-ups), and builds a rate per square metre for each locality. Your property's rateable value is then that rate multiplied by your net internal area, adjusted for shape, access and condition.
The weak point when you try this manually is comparable selection. Two shops on the same street can carry different rates per square metre if one has better frontage or a more recent rent review. Surveyors resolve this with a wider evidence base than a single business owner can access.
Contractor's basis: for properties with no rental market
Schools, hospitals, fire stations and some care homes rarely change hands on the open market, so there's no rent to compare. The VOA instead estimates the cost of building a modern equivalent, applies an age-related discount, and decapitalises that capital figure into an annual rental value using a statutory percentage.
This method is difficult to replicate manually because it needs current build-cost data and the correct decapitalisation rate for the property class, both of which the VOA sets centrally rather than publishing in a simple lookup table.
Receipts and expenditure: for trade-related properties
Pubs, hotels, cinemas and holiday parks are valued on what the business could reasonably be expected to earn, not on floor area. The VOA looks at fair maintainable turnover across a representative period, applies an industry-standard percentage to reach a notional rent, then deducts tenant's share of profit.
If you run a pub or trade venue, checking this figure manually is close to impossible without access to sector-specific VOA guidance notes, which is why business rates consultants for pubs and bars exist as a distinct specialism.
Why rateable value varies
Rateable value differs between similar-looking properties for reasons that aren't always obvious from the outside:
- Location within a zone — a unit on the primary retail pitch is worth more per square metre than one two doors down.
- Frontage and depth — narrow, deep units value lower per square metre under zoning than wide, shallow ones.
- Age and specification — a refurbished unit commands a higher rate than an unmodernised one nearby.
- Lease terms baked into comparables — rent-free periods or fitting-out contributions can distort raw asking rents if they're not stripped out correctly.
- Method mismatch — a property valued on the wrong basis (contractor's instead of rentals, for example) can carry a figure well out of line with its neighbours.
- Timing of the antecedent valuation date — a property let just before a market dip can end up with a higher rateable value than one let just after.
“If your rateable value was set using a rent from a date that doesn’t reflect the market anymore, the whole bill downstream is built on the wrong number.”
Related questions
What date does the VOA use to calculate rateable value in 2026?
The 2026 rating list uses rental evidence from the antecedent valuation date of 1 April 2024, applied to rateable values that take effect from 1 April 2026. This replaces the 2023 rating list, which was based on rents from 1 April 2021, so properties in areas where rents rose sharply between 2021 and 2024 can see a noticeably higher figure from 2026 onward.
Can I challenge a rateable value I've calculated myself?
Yes, but a manual estimate is a starting point for deciding whether to challenge, not evidence you submit on its own. The VOA's formal Check and Challenge process expects rental comparables, measurement data and a clear method, which is why manual calculations rarely succeed without professional evidence behind them, and a rejected challenge can close off further action on that valuation until circumstances change.
Does a lower rateable value always mean lower rates payable?
A lower rateable value generally reduces rates payable, since the bill is rateable value multiplied by the multiplier, minus relief. It doesn't always translate pound-for-pound, though, because small business rate relief and transitional relief phase changes in gradually rather than applying the full reduction immediately.
Get your rateable value checked
A surveyor reviews your VOA figure against comparable evidence before you challenge.
FAQ
What is rateable value?
Rateable value is the VOA’s estimate of a property’s open market annual rent at a fixed valuation date, used as the basis for calculating business rates. It is not the actual rent you pay, and it doesn’t update automatically when your real lease terms change.
How do I find my property’s rateable value?
Your rateable value is published on the VOA’s business rates valuation lookup and printed on your rates demand notice from the local council. It’s worth checking both, since a mismatch usually means the bill hasn’t been updated after a valuation change.
Is rateable value the same as rates payable?
No, rateable value is one input into your bill, not the bill itself. Rates payable is rateable value multiplied by the government’s annual multiplier, then adjusted for any relief you’re entitled to.
How is rateable value calculated for a pub or restaurant?
Pubs and restaurants are usually valued on the receipts and expenditure method, based on fair maintainable turnover rather than floor area. This makes a manual calculation harder to replicate accurately than a straightforward rent-per-square-metre shop valuation.
Can rateable value go down as well as up?
Yes, rateable value can fall as well as rise, particularly when a revaluation captures a local market downturn or when a property’s condition or use changes. The 2026 rating list will lower some values and raise others depending on how local rents moved since 2021.
Do I need a surveyor to calculate or challenge rateable value?
You don’t need a surveyor to look up your figure, but building the rental comparables and measurement evidence needed for a successful challenge is difficult without one. Rating surveyors work under the RICS Code of Practice and typically only get paid if your challenge succeeds.
What happens if I get a refund after a rateable value challenge succeeds?
A successful challenge that lowers your rateable value backdates the change to when the error arose, and the council issues a refund for rates already overpaid during that period. How that refund is processed and paid depends on your council’s timescales.
One last thing
The most common reason a manual rateable value calculation is wrong isn't the rent comparable, it's the measurement. Net internal area gets miscounted more often than rent evidence gets misread, because staircases, plant rooms and structural columns are easy to include or exclude incorrectly, and a few square metres of error compounds across the whole valuation.
Related guides
- How a refund works after a successful business rates appeal
- How to track your business rates appeal case status
