Business rates are an unavoidable cost for most companies occupying commercial property in Glasgow. Whether you are renting a serviced office, managing a growing team, or planning a move into new workspace, understanding how business rates are calculated will help you budget with confidence and avoid surprises.
This guide explains how business rates work in Glasgow, how they are calculated, and the key factors that can influence what your business ultimately pays.
What Are Business Rates?
Business rates, formally known in Scotland as Non-Domestic Rates (NDR), are a property tax applied to most commercial premises, including offices, studios, retail units, cafés, and industrial spaces. If your business occupies physical workspace rather than operating solely online, business rates will usually form part of your ongoing property costs. They sit alongside rent and service charges as a core consideration when assessing affordability.
Although business rates are collected by Glasgow City Council, the structure of the system is set nationally. The Scottish Government determines how properties are valued and how much is charged per pound of rateable value, ensuring consistency across Scotland. This means businesses in Glasgow are assessed under the same framework as those elsewhere in the country.
For companies choosing or reviewing workspace, understanding how business rates operate alongside other occupancy costs is essential. It allows decision-makers to compare different properties more accurately and avoid unexpected liabilities once a lease or agreement is in place.
What Factors Affect How Much You Pay?
Your business rates bill is not a fixed or standardised amount. It is calculated using a combination of property value, nationally set rates, and any reliefs or reductions that may apply to your business. Each of these elements plays a role in determining the final figure shown on your bill.
Understanding these factors is particularly important when comparing different workspaces or planning a move. Two properties with similar rents can result in very different business rates costs, which can have a noticeable impact on overall occupancy expenses.
Rateable Value of the Property
The rateable value (RV) forms the foundation of your business rates calculation. It represents the estimated annual rent the property could achieve on the open market at a fixed valuation date, rather than the rent you personally pay under your agreement. As a result, rateable value is intended to reflect market conditions rather than individual deals.
In Glasgow, rateable values are assessed by the Scottish Assessors Association (SAA). Properties of similar size, type, and location are typically grouped together to ensure valuations remain consistent and equitable. This approach helps reduce sharp discrepancies between comparable buildings.
Because valuations are linked to wider market evidence, changes in the commercial property landscape can influence rateable values over time. Individual negotiations or short-term incentives are less likely to affect valuations unless they reflect broader market shifts.
The Scottish Business Rates Multiplier
Once the rateable value has been established, it is multiplied by the Scottish business rates multiplier, often referred to as the poundage. This figure determines how much tax is charged for each pound of rateable value and is reviewed annually. Even small changes to the multiplier can affect overall costs.
Different multipliers apply depending on the value of the property. Lower-value premises are generally charged at a reduced rate, while higher-value properties may fall into intermediate or higher bands. This tiered structure is designed to support smaller businesses while ensuring larger properties contribute proportionately.
When comparing workspaces, the multiplier band is an important detail to consider. Two properties with similar rents can result in very different business rates bills depending on how they are valued and categorised.
Calculating the Basic Rates Liability
The core business rates calculation is relatively straightforward once the relevant figures are known. Your rateable value is multiplied by the applicable Scottish multiplier to produce an annual charge. This calculation provides a clear starting point for understanding potential costs.
The resulting figure is known as your basic rates liability. It represents the amount payable before any reliefs, exemptions, or adjustments are applied and is useful when budgeting or comparing properties. Many businesses use this figure as a baseline during decision-making.
In practice, this amount is often reduced once reliefs are factored in. However, understanding the basic liability first makes it easier to see the true impact of any reductions that apply.
Business Rates Reliefs and Reductions
There are several relief schemes in Scotland designed to help businesses reduce their business rates bill. Understanding which reliefs may apply can make a meaningful difference to overall occupancy costs, particularly for smaller teams or growing companies.
These reliefs are intended to support economic activity and ease pressure on businesses occupying commercial space, but they are not always applied automatically.
1) Small Business Bonus Scheme
The Small Business Bonus Scheme is one of the most widely used forms of business rates relief in Scotland. It is aimed at businesses occupying properties with lower rateable values and can result in partial or full relief from business rates, depending on eligibility.
This scheme is particularly relevant for small offices, start-ups, and businesses taking their first dedicated workspace. Where a business occupies more than one property, the combined rateable value is taken into account, which makes it important to review eligibility carefully.
2) Empty Property Relief
If a commercial property becomes vacant, Empty Property Relief may be available for a limited period. This relief recognises that paying full business rates on an unoccupied space can be a significant burden while a property is not generating income.
This type of relief can be helpful during periods of transition, such as when a business is relocating, refurbishing, or preparing a space for new occupants. Time limits and conditions apply, so it is important to confirm current rules with Glasgow City Council.
3) Charitable and Sector-Specific Reliefs
Registered charities and non-profit organisations may qualify for substantial reductions in business rates when a property is used mainly for charitable purposes. In many cases, this can significantly lower the cost of occupying suitable workspace.
In addition, the Scottish Government may introduce sector-specific reliefs from time to time to support particular industries or respond to economic conditions. Businesses should stay informed, as these reliefs can change and may require formal application.
Your Business Rates Bill from Glasgow City Council
Glasgow City Council issues business rates bills annually, outlining how the charge has been calculated. The bill will show the property’s rateable value, the multiplier used, any reliefs applied, and the total amount payable.
This document is an important reference point for businesses reviewing their property costs or planning a move to new premises. It also helps confirm whether reliefs have been correctly applied.
If you believe the rateable value does not accurately reflect the property, there is a formal Scottish process available to request a review or lodge an appeal.
Do Business Rates Change Over Time?
Business rates are not fixed indefinitely and can change over time. Nationwide revaluations, annual updates to the multiplier, and policy decisions at government level can all affect how much a business pays. These changes apply regardless of whether a company has moved premises.
Alterations to a property can also trigger changes. Expanding floor space, reconfiguring layouts, or changing how a space is used may result in a reassessment of rateable value. Eligibility for certain reliefs may also change as a business grows or restructures.
For businesses planning ahead, understanding how and when business rates can change is an important part of long-term cost management. Factoring this into workspace planning helps reduce the risk of unexpected increases in overheads.
Summary
Calculating business rates in Glasgow involves understanding your property’s rateable value, applying the correct Scottish multiplier, and accounting for any reliefs that may apply. While the calculation itself is simple, the wider impact on budgets and workspace decisions is often underestimated.
If you are exploring flexible offices, expanding your team, or reassessing your current space, Quintessential Offices can help you find workspaces that offer clarity on costs and flexibility as your business evolves. Contact us today to discuss workspace solutions designed to support the way you work.
