Business improvement districts, explained: the four rules that decide what you pay

A business improvement district, or BID, is an area where businesses pay a levy on top of their business rates to fund projects they have voted for. In England the rules sit in Part 4 of the Local Government Act 2003, which lets a council set up BID arrangements for all or part of its area so that projects "for the benefit of the business improvement district" can be paid for by a levy on the businesses in it (section 41). Four of its rules decide most of what that means for a small business.

1. Nothing happens without a ballot

BID arrangements "are not to come into force unless" the proposals for them "are approved by a ballot of the non-domestic ratepayers", in other words the businesses that pay rates in the area (section 49). The business plan that arrives before the vote is those proposals. Read it as the thing you are agreeing to pay for, because it is.

2. Two majorities, and no minimum turnout

A ballot passes only if a majority of those voting are in favour, and the combined rateable value of the premises voting yes is greater than that of the premises voting no (section 50). The Act sets no minimum turnout.

Between them, the two tests mean a crowd of small businesses cannot carry a vote on numbers alone, and a few large ones cannot carry it on rateable value alone. An illustration with round numbers, to show how it works: if four small shops rated at £10,000 each vote yes and one store rated at £100,000 votes no, the first test passes and the second fails, so the BID does not go ahead.

The missing turnout rule matters as much. When Leatherhead voted in December 2025, 25% of eligible businesses took part (Leatherhead BID), and that quarter decided for the whole town centre. There is more on Leatherhead's new BID.

3. You pay if you fit the description, however you voted

The arrangements "must specify the description of non-domestic ratepayers" who are liable for the levy, and anyone who falls within that description during a period owes it (section 46). How you voted does not come into it. Each BID sets its own description and rate: Leatherhead's is a 2% levy on premises with a rateable value of £8,000 or more (Mole Valley District Council). Below a BID's threshold you pay nothing, though you trade on the same street as the businesses that do.

4. Five years at most, then another vote

Arrangements last for a period "not exceeding 5 years", and can be renewed only by another ballot that passes the same two tests (section 54). Some BIDs have been renewed several times. Kingston First, which describes itself as the UK's first BID, has worked in Kingston since 2005 and began its current term in January 2025, after a renewal ballot with 94% in favour by number and 96% by rateable value (Kingston First). Epsom's BID, Go Epsom, is in its second term, 2023 to 2028 (Go Epsom).

A renewal is the point where a business has the most to go on: five years of what the BID actually did, set against what it said it would do.

When the ballot paper arrives

• Vote. With no minimum turnout, not voting hands the decision to whoever does.
• Read the plan against your own trade. Which of the projects would bring your customers, and which would you be paying for on behalf of someone else? A café lives on footfall; an accountant's office may see little of it. That imbalance is the trade-off every local business network involves.
• Check whether you are liable, and on what. The description and the threshold are in the proposals, and the rateable value is on your business rates bill.
• If it goes ahead, use what you are paying for. Find out what your BID offers the businesses that pay for it. Go Epsom runs a business directory and a What's On calendar, which our page for Epsom and Ewell businesses covers; Leatherhead's BID takes event listings by email and invites businesses onto its working groups.

These are the rules for England. Wales has its own regulations under the same Act, the Business Improvement Districts (Wales) Regulations 2005, and elsewhere in the UK the law is different.