The Valuation Office Agency (VOA) reassesses all rateable values every five years, but Central Government decided to defer the revaluation due to take place on 1 April 2015 to 1 April 2017. The VOA sets the new rateable values of all business properties, known as a revaluation. Rateable values are used by local councils to calculate business rates. The new rateable values, released on 30 September 2016, are based on the rental value of properties on 1 April 2015. These will be used to calculate business rate bills from 1 April 2017.
The transitional arrangements scheme set by Central Government limits the amount by which the business rate bill can increase or decrease as a result of the 2017 non-domestic rating revaluation carried out by the VOA.
Some increases and reductions will be capped and phased in up to five years until the full bill is due.
Ratepayers, whose business rate bills have increased above a certain amount as a result of the 2017 revaluation, will have the increase limited and phased in.
Ratepayers, whose bills would otherwise have decreased below a certain amount as a result of the 2017 revaluation, will also have these reductions limited and the reduction will be phased in.
The transitional arrangements are required to be self-funding. Therefore, the phasing in of the reductions of bills fund the phasing in of the increases of other ratepayers.
These transitional arrangements are applied automatically and are shown on your business rates bill in the calculation section.
The business rate bills for 2017-18 will be capped at the percentage limits in the table below, when compared to 2016.
Limit on increases
|Property Size||Rateable Value 01 April 2017||2017/18 % cap on increases|
|Small||Up to £20,000||5%|
|Medium||Up to £100,000||12.5%|
Limit on reductions
|Property Size||Rateable Value 01 April 2017||2017/18 % cap on reductions|
|Small||Up to £20,000||20%|
|Medium||Up to £100,000||10%|
For example, a large property whose rates bill has increased as a result of the 2017 revaluation, when compared to 2016, will have the increase limited to 42% on the 2016 bill.
A large property with a decrease in their rates bill, when compared to 2016, will see the reduction capped at 4.1%.
All caps are before inflation. An inflation factor of 2% is also applied for 2017/18.
Transitional calculations are based on the small multiplier and applied before all other reliefs.
The transitional adjustments no longer apply once the full bill is reached.