Who normally pays business rates for a franchised shop in London?

The ratepayer is usually the occupier named on the local rating list, which may be the franchisee or the property owner depending on occupation and lease terms.

Can a franchisor be held liable if the franchisee defaults?

Liability depends on contractual terms and who is shown as the ratepayer; franchisors should check lease and franchise agreements and seek legal advice if liability is unclear.

How do I challenge a business rates valuation or liability?

Use the Valuation Office Agency’s Check, Challenge, Appeal process for valuations and contact your local billing authority for liability queries and to request supporting guidance.

Franchise Arrangements and Business Rates in London

Taxation and Finance England 3 Minutes Read · published February 02, 2026

In London, England, franchise arrangements commonly raise questions about which party is liable for business rates for a trading location and how local enforcement operates. Business rates are administered by local billing authorities using national non-domestic rating rules; however, liability often turns on the contractual and occupational facts of each franchise location. This guide explains practical points for franchisors, franchisees and property owners in London, shows official application and appeal pathways, and sets out enforcement and common violations with links to the primary official sources used by London authorities.

Penalties & Enforcement

Responsibility for collecting and enforcing business rates rests with the local billing authority for the location in London; the practical effect is that either the occupier or the owner may be the ratepayer depending on the rating list and arrangements. Specific penalty amounts for non-payment, rates collection procedures and enforcement powers are published by billing authorities and under national legislation; fine amounts or fixed penalties are not specified on the cited national guidance pages for London authorities below.^[1]

Fine amounts: not specified on the cited page; billing authorities may recover sums by court processes or distraint where permitted.^[1]
Escalation: published procedures typically move from reminders to recovery action and then to court enforcement; specific progressive fines or daily penalties are not specified on the cited national guidance.^[1]
Non-monetary sanctions: enforcement can include court orders, charging orders, distraint/seizure of goods, and legal costs recoverable by the authority; authorities may also issue liability orders.
Enforcer and complaints: the local billing authority (the London borough or the City of London Corporation) is the enforcing body; contact and complaint pages are published by each authority for rates collection and disputes.^[3]
Appeals and review: valuation and liability challenges follow the Check, Challenge, Appeal route administered via the Valuation Office Agency and billing authority procedures; specific statutory time limits and appeal windows should be checked on the official guidance pages cited below.^[2]
Defences and discretion: common defences include demonstrating non-rateable occupation, relief eligibility (for example small business relief), or a legal exemption; authorities also consider reasonable excuse in recovery cases where applicable.

Local authorities are responsible for setting recovery procedures and publishing contact details for business rates enforcement.

Applications & Forms

Applications for reliefs, exemptions and hardship are submitted to the local billing authority for the property; valuation challenges use the Valuation Office Agency process. The City of London and other London boroughs publish online forms and guidance for relief applications and for business rates queries; where a specific form number is not published centrally, contact the billing authority directly for their application form or online portal.^[3]

Common Violations and Typical Outcomes

Failure to notify occupation change or vacant status: can lead to backdated charges and recovery action.
Incorrect claims for relief or failure to apply for entitled reliefs: may result in repayment demands and interest.
Trading without correct registration or incorrect ratepayer declaration in franchise handovers: liable party disputes can lead to enforcement until resolved.

If liability is disputed between franchisor and franchisee, continue to pay sums due under protest to avoid recovery action while you pursue a formal appeal.

FAQ

Who normally pays business rates for a franchised shop in London?: The ratepayer is usually the occupier named on the local rating list, which may be the franchisee or the property owner depending on occupation and lease terms.
Can a franchisor be held liable if the franchisee defaults?: Liability depends on contractual terms and who is shown as the ratepayer; franchisors should check lease and franchise agreements and seek legal advice if liability is unclear.
How do I challenge a business rates valuation or liability?: Use the Valuation Office Agency’s Check, Challenge, Appeal process for valuations and contact your local billing authority for liability queries and to request supporting guidance.

How-To

Gather the lease and franchise agreement to identify who is contractually responsible for outgoings and business rates.
Check the local rating list entry for the property with the Valuation Office Agency to confirm the named ratepayer.^[2]
If the valuation appears incorrect, follow the VOA Check, Challenge, Appeal procedure and keep records of all correspondence.^[2]
Contact the local billing authority to request relief application forms or to notify occupation changes; submit any required documentation promptly.^[3]
If you cannot resolve liability, seek formal advice and consider paying under protest while you pursue an appeal to prevent recovery action.

Key Takeaways

Business rates liability in London depends on occupation facts and the rating list entry; check both lease terms and the VOA entry.
Use official VOA and local billing authority procedures for valuation challenges, reliefs and appeals.