How restaurants are valued for business rates
Find out how the Valuation Office Agency (VOA) calculates rateable values for restaurants.
Applies to England and Wales
How restaurants are valued
The Valuation Office Agency (VOA) usually uses the rental comparison method to value restaurants. This includes cafes and snack bars but does not include roadside, drive to and drive through restaurants. We group similar properties into valuation schemes. We measure them using the net internal area (NIA) method. Find out more about the rental method, valuation schemes and NIA.
To value restaurants, the VOA:
- gathers information about rents paid for a property and similar nearby properties
- analyses the information and works out a price per square metre for the property
We also consider the property’s specific details such as:
- outside seating
- unusual layouts
- air conditioning
We apply the price per square metre to the floor area of each part of the building. We value the most important space, such as the main dining area on the ground floor, at the full price per square metre.
We value areas like stores and customer toilets at a lower percentage of the price per square metre.
We value kitchens that customers can see and are part of the dining experience at the full price per square metre. We value kitchens that are not part of the dining experience at a lower percentage.
Zoning restaurants
Zoning is a standard way of measuring restaurants for valuation purposes. We use it to apply the price per square metre to properties and calculate the rateable value. Zoning recognises that the front of the property nearest the display window is the most valuable part.
We divide properties into zones that cover the width of a property, starting from the building line (the front of the property) and continuing until the entire depth of the retail area has been zoned.
The first zone is called Zone A. Zone A starts at the building line and usually goes back 6.1 metres (20 feet). The depth of the zones may be different depending on the property location. Zone A is the most valuable part of the property.
The next zone is Zone B, which is half the value of Zone A. The next zone is Zone C, which is half the value of Zone B. Any space after Zone C is called the remainder, which is half the value of Zone C. The zoned area will include any space created by using non-structural walls or partitions. Zoning patterns may vary depending on property type, location, and historical practice. Not all properties will have a Zone A, B, C and remainder.
Areas like storerooms or offices in a valuation and given a price per square metre but are not zoned. We do not include areas such as toilets, stairwells and cleaners’ rooms in the valuation.
Plant and machinery
Plant and machinery may be shown separately in the rateable value calculation and can include:
- heating
- sprinklers
- air conditioning
- lifts