How to Manage Business Rates for Expanding Businesses

Expanding into new premises is an exciting milestone for any business, but it also brings new financial responsibilities and business rates are often high on the list. Whether you're opening a second shop, leasing a larger office, or scaling up across multiple locations, managing business rates effectively can make a significant difference to your bottom line.

Many growing businesses overlook the impact that timing, location and property details can have on their rates liability. To help navigate these challenges, we spoke to Tom Holloway, Director at Holloway Bond, for practical advice on how to plan ahead, avoid costly surprises and make smarter decisions during expansion.

Start with Strategy: Plan Business Rates Early

When planning to expand into a new premises, one of the first (and most important) factors to consider is the Rateable Value (RV) of the property. This figure, set by the Valuation Office Agency (VOA), plays a central role in determining how much you’ll pay in business rates.

When asked what’s the first thing an expanding business should consider from a business rates perspective, Tom Perry, Director at Holloway Bond, explains “The Rateable Value! Ultimately, how much you pay is dictated by that number…You need to make sure the expected liability is something you’re comfortable with.”

Tom goes on to say that “to work out the expected liability, you take the Rateable Value and apply the relevant multiplier; 0.499 if the Rateable Value is below £51,000 or 0.555 if the Rateable Value is £51,000 or above” so even if you plan to apply for reliefs or reductions, most of them still hinge on the original RV, so it’s essential to get this part right from the outset.

For growing businesses, factoring business rates into your location decisions and lease planning can prevent costly surprises, and in many cases, can open the door to strategic opportunities to manage your liability more effectively.

Time Your Openings Strategically

When expanding, timing matters more than many businesses realise. Especially when it comes to how and when business rates liability kicks in.

One key consideration is the national revaluation cycle. The Valuation Office Agency (VOA) reassesses rateable values every three years, with the most recent revaluation taking place in 2023 and the next due in 2026. This means a property you’re comfortable paying for now could carry a much higher liability in just a few years’ time.

Businesses should also consider when they take occupation of a property. Liability often starts when the property is deemed ready for use, so in some cases, delaying occupation or phasing entry into a site could help reduce exposure, particularly if multiple locations are opening at once.

Strategic timing can play a real role in managing cash flow during periods of growth, which is something every expanding business should keep firmly in mind.

Reliefs and Cost Control

Expanding your business can unintentionally affect your eligibility for valuable business rates reliefs.

“Small Business Rates Relief and Retail, Hospitality and Leisure Relief have, in effect, built-in caps on how much relief you can receive on your properties,” says Tom Perry. “For example, Small Business Rates Relief typically only applies when you have a single address and Retail, Hospitality and Leisure Relief has a £110,000 cap per business.”

This means that moving into a second location could result in the loss of relief on your existing site, or the new property may not qualify for the same discounts. These changes can increase your liability quickly if not properly accounted for.

Tom also highlights the importance of transitional relief, which protects businesses from sudden spikes in rates due to revaluations:

“Transitional relief effectively smooths your liability if there is a sudden increase to your Rateable Value when the Valuation Office Agency complete their national revaluation,” he explains.

“This applies no matter when the occupier moved in; so even if you take occupation of a property during the 2023 Rating List, you will still benefit from transitional relief stemming from the property’s historic valuation.”

In short, reviewing relief eligibility and transitional protections before expanding is essential to keeping costs under control.

When to Get Help & Final Thoughts

As your business grows, so does the complexity of your business rates liability. From understanding rateable values to managing reliefs and planning for revaluations, there’s a lot to navigate and timing and strategy can significantly affect your costs.

“Do your research,” advises Tom Perry. “Check the property’s valuation on the Valuation Office Agency’s website, make sure it matches reality, and have a look at what reliefs could be available to you.”

Need a second opinion or expert guidance before expanding? Holloway Bond is here to help you grow with confidence.