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Written Statement - Transitional Relief to Support Small Businesses Affected by the 2017 Non-domestic Rates Revaluation

Mark Drakeford, Cabinet Secretary for Finance and Local Government

The Welsh Government today sets outs plans for a transitional relief scheme for small businesses, which are affected by the Valuation Office Agency’s revaluation of non-domestic rates.  

The £10m scheme, which will be available from 1 April 2017, when revaluation comes into effect, will be fully funded by the Welsh Government. This is in addition to the existing £100m tax cut for small businesses in Wales.

Non-domestic rates can represent a higher proportion of overheads for small businesses and some are less able than others to adapt to periodic increases in their rates bills. This revaluation is the first in Wales since 2010.

The total number of ratepayers eligible for SBRR will be largely unchanged by this revaluation – half of all ratepayers will continue to pay no rates and a further 20,000 ratepayers will qualify for tapered relief.

There will, however, be some businesses whose eligibility for SBRR will be affected by increases in their rateable value following the revaluation. For these ratepayers, particularly those who previously qualified for 100% relief and are no longer eligible for any support, any resultant increases in liability could be difficult to manage.  

To protect these ratepayers, I will lay regulations before the National Assembly to introduce a transitional relief scheme. This will assist those ratepayers who are no longer entitled to the same amount of SBBR as a result of increases in their rateable value following the revaluation.  

The scheme will help these ratepayers by gradually phasing in any increases in the amount they have to pay over a three-year period. This will provide additional support to more than 7,000 ratepayers.
To simplify the administration of the scheme and to ensure no ratepayers will be adversely impacted by the provision of this relief, it will be fully funded by the Welsh Government.  

This contrasts with self-financing transitional relief schemes, such as the one currently operating in England, which limit increases in liability by capping reductions in liability for those ratepayers whose rateable value decreases following the revaluation. I do not believe that such an approach would be fair or equitable given that the purpose of the revaluation is to redistribute liability to reflect current market conditions.

With the introduction of this relief, more than three-quarters of all ratepayers will receive some form of tax cut in meeting their rates bills in 2017-18. Once this transitional relief scheme, SBRR and other mandatory and discretionary reliefs are taken into accounts, £200m of financial assistance will be provided to ratepayers.

Alongside this announcement, a technical consultation seeking views about the practical and operational considerations of introducing this proposed transitional relief has been published. It is available at:

https://consultations.gov.wales/consultations/transitional-relief-small-businesses-affected-2017-non-domestic-rates-revaluation




Technical Note

The Valuation Office Agency is publishing the Draft Rating List for 2017 on its website on 30 September. Using the provisional multiplier for 2017-18 (0.499), ratepayers in Wales will be able to estimate their bills for next year.