Data centre business rates are the annual tax on a data centre's rateable value, paid to the local council in England and Wales and recalculated at the 2026 revaluation with the aim of paying no more than the law requires. Data centres are unusual ratepayers: most sit in the top rateable-value band, they are typically valued from building cost rather than rents, and their power, cooling and resilience fit-outs can swing the valuation by large sums in either direction.
- 2026 revaluation took effect 1 April 2026 on 1 April 2024 rents.
- England’s rateable values rose 19.4% at the revaluation.
- Data centres with RV over £500,000 pay the 50.8p multiplier.
- Check first, Challenge second: the VOA rejects out-of-order cases.
- Physical changes must be reported to the VOA within 60 days.
Why business rates matter for data centres
The 2026 revaluation lifted the total rateable value on England's local lists by 19.4% (Wales: 15.2%), moving the draft list from GBP 70.8 billion on the 2023 rating list to GBP 84.4 billion across 2.13 million properties. From 2026/27 England replaced its two multipliers with five, and a property with a rateable value of GBP 500,000 or more — the band most purpose-built data centres land in — pays the large property multiplier of 50.8p per GBP 1 of rateable value. A single percentage point of rateable value on a facility of that size is real money every year, which is why whether a business rates appeal is worth it in 2026 is a question worth answering early rather than at the next revaluation in 2029.
How data centre rateable values are built
Data centres rarely have a meaningful rental market to compare against, so valuers typically fall back on the contractor's basis: they estimate what it would cost to replace the building and its services, then de-capitalise that figure into an annual equivalent. Three levers dominate the outcome:
- Floor area and specification. Every additional m2 of technical space, office or plant room enters the valuation.
- Power and cooling infrastructure. Generators, UPS systems, chillers and resilient feeds are part of the rated property.
- External factors. Long-term roadworks, changes to power supply or neighbouring works can justify a lower value.
Because the inputs are factual and verifiable, the single most effective move is auditing the Valuation Office Agency (VOA)'s record before arguing about the money.
Audit the VOA's factual record
- Find the site on GOV.UK's Find a business rates valuation service, by address or billing authority reference.
- Read the factual record line by line: description, floor areas, valuation scheme, effective dates.
- Download a dated copy — records change, and your copy is the baseline evidence.
- List every inaccuracy with a document behind it: plans, fit-out records, photographs.
Why it matters: a Check case stands or falls on facts. A single wrong floor area can be worth thousands per year at the 50.8p multiplier.
Report physical changes within 60 days
Since the 2026 revaluation, the VOA must be told about physical changes — halls added, space decommissioned, parking altered, a change of occupier — within 60 days of the change. Each year, within 60 days of 31 March, you confirm the record is still accurate. These are duties, not courtesies: missing them can attract penalties, and a false submission is penalised far more heavily. Diary both dates; the VOA account is where this happens.
Raise a Check on the facts you dispute
- Register for a VOA business rates account and sign in with a Government Gateway ID.
- Open the property record and select Check.
- State each factual error separately, with dated evidence attached — one issue per point.
- Answer VOA follow-ups inside the case thread.
The Check is a factual review, not a value negotiation. If the record is broadly right, the Check closes with no change — that is normal, and the decision notice still unlocks the next stage.
Challenge the valuation on proper grounds
A Challenge argues the value itself, and it can only start once the Check decision has arrived. Valid grounds are a rateable value out of line with comparables, errors in the factual record, or a material change in circumstances. The windows are strict:
- Within 4 months of receiving the Check decision.
- Within 16 months of the Check submission where the case concerns a change in the surrounding area.
- Any time once the VOA has passed 12 months without a Check decision.
If the Challenge decision is wrong, an appeal to the Valuation Tribunal for England must follow within 4 months — and the tribunal only considers evidence exchanged at Check and Challenge stage. Track each notice through your business rates appeal case status rather than waiting on post.
Claim what the bill has overpaid
A successful Challenge or appeal corrects the rateable value backdated to its effective date, and the council refunds the difference; see how a refund after a successful business rates appeal is calculated and paid. Bills are not paused while a case runs — the instalments continue, and any repayment follows the outcome.
Who should run a data centre rates case
| Option | Best for | Key limitation |
|---|---|---|
| DIY via the VOA account | One site, an obvious factual error | Valuation judgement cases stall at Challenge |
| Result-linked rating surveyor | Owner-operators and single-site operators | Capacity limited to cases with real merit |
| National rating consultancy | Portfolios and multi-site operators | Fee-based engagement, not results-based |
| Local commercial agent | Small satellite sites or offices | Rarely handles high-value specialist plant |
For most single-site data centre operators, an IRRV-qualified specialist with clear result-linked fees is the fit: the written terms explain what becomes payable after a successful outcome.
Common mistakes data centre operators make
- Waiting for the 2029 revaluation. Rateable values can be challenged within the current list now; three years of an inflated value is three years of overpayment.
- Arguing value at Check. The Check is for facts. Mixing the two gets both rejected.
- Ignoring the 60-day duties. An unreported mezzanine or decommissioned hall can push the valuation in the wrong direction permanently.
- Treating the contractor's basis as fixed. Replacement-cost inputs — areas, specifications, plant — are all open to evidence.
- Missing the 4-month appeal window after a Challenge decision. There is no extension and no second Challenge on the same grounds.
FAQ
How are data centres valued for business rates?
Purpose-built data centres usually have no direct rental market, so valuers typically use the contractor’s basis: estimating the cost of replacing the building and its services, then de-capitalising it into an annual value. The VOA’s factual record of floor areas and specification drives the outcome.
What is the business rates multiplier for large properties in 2026/27?
In England, properties with a rateable value of GBP 500,000 or more pay the large property multiplier of 50.8p per GBP 1 of rateable value in 2026/27. Non-RHL properties between GBP 51,000 and GBP 499,999 pay 48p, and small business non-RHL properties below GBP 51,000 pay 43.2p.
Did the 2026 revaluation increase data centre rateable values?
The 2026 revaluation, effective 1 April 2026 and based on 1 April 2024 rental values, raised England’s total rateable value by 19.4% and Wales’s by 15.2%. Each property moved differently, so check the site’s new value on the rating list rather than assuming.
Can I appeal my data centre’s business rates?
Yes, through England’s three-stage process: a Check on the VOA’s factual record, a Challenge on the valuation with proper grounds, and if needed an appeal to the Valuation Tribunal for England within four months of a Challenge decision.
What is the deadline to challenge a 2026 rating list valuation?
A Challenge can be submitted within four months of a Check decision, within 16 months of the Check submission for surrounding-area changes, or once the VOA has passed 12 months without deciding the Check. The tribunal route opens within four months of a Challenge decision or after 18 months without one.
Do I still pay business rates while appealing?
Yes. Liability continues on the normal schedule during a Check, Challenge or appeal. If the valuation is later reduced, the correction is backdated to the effective date and the council refunds the difference.
What must I report to the VOA after the 2026 revaluation?
Physical changes to the property — construction, decommissioning, occupancy changes, parking alterations — must be reported within 60 days of the change, and the VOA’s record must be confirmed annually within 60 days of 31 March.
One last thing
The transitional relief scheme supporting ratepayers through the 2026 revaluation is worth GBP 3.2 billion — but relief limits increases, it does not fix a wrong valuation. A data centre overvalued on the new list still pays an inflated bill every year of the list; the appeal route is the only mechanism that changes the number itself.
If you want a second opinion on whether your facility's valuation holds up, send the VOA factual record and latest bill through our contact page and we will explain the review process and fee terms clearly before any work begins.
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