Paying business rates from the business bank account

Business rates are a property cost collected by the local council, not a central HMRC payment. The company should therefore use the payment instructions and account reference on its council bill, check the 2026 rateable value and relief position, and build the instalments into the banking calendar before the first payment is due.

Start with the current council bill rather than an old standing order

GOV.UK says local councils send business-rates bills for the coming tax year, normally in February or March. The bill shows what the business is expected to pay and the payment dates. Because councils collect the money locally, the bank details and payment reference come from the council rather than from a national HMRC account.

Do not assume last year's bank instruction remains correct. A move to new premises, a change of occupier, a new property reference or a council system change can alter the account details or reference. Finance should compare the new annual bill with the saved Direct Debit, standing order or bank-transfer template before the first instalment leaves the account.

The latest England and Wales revaluation took effect on 1 April 2026

GOV.UK says the most recent business-rates revaluation took effect on 1 April 2026 and is based on open-market rental values from 1 April 2024. In England, the 2026 to 2027 bill uses new multiplier bands, including separate lower multipliers for qualifying retail, hospitality and leisure properties and a higher-value multiplier for properties with a rateable value of £500,000 or more.

A higher rateable value does not automatically mean the final bill rose by the same proportion because multipliers and reliefs also changed. Check the council bill against the Valuation Office Agency record and any relief shown. If the rateable value looks wrong, challenge the valuation through the proper route rather than simply reducing the bank payment yourself.

England business-rates bills normally start on a 10-month payment cycle, but 12 months can be requested

Government explanatory notes for the 2026 to 2027 business-rates year say bills are automatically set on a 10-monthly instalment cycle. Ratepayers can ask the local authority to spread payments over 12 months instead. Some councils also offer different collection dates for Direct Debit customers.

Use the instalment structure that fits cash flow, but make the request early. A company with a £120,000 annual bill may prefer twelve £10,000 instalments rather than ten £12,000 instalments. The annual liability is not reduced, but the working-capital profile becomes smoother.

Direct Debit is common, but councils can also accept bank transfer, card or other methods

Payment methods vary by local authority. Current council guidance from authorities such as the City of London, Oxford and Bristol shows Direct Debit as a standard option, alongside online card payment and bank transfer. The exact bank account and processing time depend on the council.

Direct Debit reduces manual monthly work and comes with the Direct Debit Guarantee, but bank transfer can suit businesses that prefer explicit approval of each instalment. If the company uses a dual-signature bank account, check whether the council needs a paper or multi-signature Direct Debit mandate rather than a standard online setup.

The business-rates account number is what allows the council to allocate the money correctly

Councils instruct businesses to quote the business-rates account reference from the bill when paying by Bacs or other bank transfer. The format is council-specific. Some councils use eight digits, others nine, ten or another local structure. There is no single national reference format.

For a company paying several properties to one council, follow the council's remittance-advice process. One large transfer without a property-by-property breakdown can leave valid money sitting unallocated while individual accounts appear overdue. Keep the remittance file with the bank confirmation.

Reconcile the annual liability, reliefs, instalments and bank statement

At the beginning of the rates year, record the expected annual charge from the bill and any relief separately. Then clear the liability as monthly instalments are paid. If the council issues a revised bill after a valuation change, relief award or property change, update the schedule rather than continuing to pay the old amount automatically.

After a Direct Debit or bank transfer, check that the council account reflects the payment if the business has online access. A failed bank payment can put the instalment arrangement at risk. Keep the bill, revised notices, payment confirmations and relief decisions together so finance can explain why the bank payments changed during the year.