National non-domestic rates (NNDR)

Municipal taxes

In the United Kingdom, domestic households within a local authority area contribute to the cost of local services through the payment of Council Tax. Commercial organisations and diplomatic missions occupying non-domestic property (i.e. offices) contribute through National Non-Domestic Rates (NNDR).

In the case of diplomatic premises, His Majesty’s Government divides the NNDR charge into a non-beneficial portion, from which the sending State is deemed to derive no direct benefit, and a beneficial portion which covers those services which do provide direct benefit. The non-beneficial portion includes such services as education, police, housing and welfare services while the beneficial portion covers street cleaning, lighting and maintenance and fire services. His Majesty’s Government regards diplomatic missions as liable for the beneficial portion (currently 6%) in accordance with Article 23 of the Vienna Convention, which requires the sending State to pay municipal dues and taxes for specific services rendered in respect of premises owned and leased by the sending State.

The Valuation Office Agency (VOA) pays the full amount of NNDR levied on those office premises that are accepted for diplomatic rating relief on the understanding that missions will refund the beneficial portion promptly. The VOA send annual statements to each mission showing the amount of NNDR paid by them and the amount recoverable from the mission. (Any other rates levied separately from non-domestic rates, e.g. empty rate, water and garden rates, remain the responsibility of the mission.)

How to claim rating relief

Diplomatic missions, consular missions and international organisations should submit applications for rating relief to Protocol Directorate on Form 3.