Transitional rate relief

The Government introduced a new transitional scheme from 1 April 2023 following the national revaluation of all non-domestic properties.

The Valuation Office Agency (VOA), HMRC, carried out a national Revaluation of all Business Rateable Values (RV) that came into effect from 1 April 2023. The rateable value is based on rental values so if rents had increased above inflation since the last revaluation, rates will likely go up. If rents had decreased after inflation, rates will likely go down. The VOA assess rents across a sector.

Businesses should contact the VOA if they think their rateable value is incorrect:

• website: Business rates valuation account

The amount a bill can go up following revaluation is limited each year under the Government Transitional Scheme.

The limits are based on your rateable value. The maximum transition increase percent, from the full rates payable using the lower multiplier in 2022 to 2023 based on the rateable value in force on 31 March 2022, to 2023 to 2024, as a result of the revaluation are shown below. In most years an inflation increase is also applied, but the Government have not applied any inflation increase for 2023 to 2024.

Maximum business rate transitional increase percentage dependent on the rateable value in 2023 to 2024

2023 to 2024 maximum increase (bill gone up)

• Rateable value £20,000 or under: 5 percent
• Rateable value £20,001 to £100,000: 15 percent
• Rateable value £100,001 or over: 30 percent

2024 to 2025 Maximum increase (bill gone up)

• Rateable value £20,000 or under: 10 percent
• Rateable value £20,001 to £100,000: 25 percent
• Rateable value £100,001 or over: 40 percent

2025 to 2026 Maximum increase (bill gone up)

• Rateable value £20,000 or under: 25 percent
• Rateable value £20,001 to £100,000: 40 percent
• Rateable value £100,001 or over: 55 percent

There are limits on increases each year until your rates payable without transition are lower than the limit at which point you no longer fall into transition. In each year (except where stated) an inflation increase is also applied. More information on the scheme can be found on the government website:

• website: Business rates relief - GOV.UK

Please note increases in your rateable value for any other reason (e.g. not as a result of the revaluation) are not subject to transition. In certain circumstances the rateable value(s) used for transition can be different to the actual rateable value(s) in force.

2023 to 2024

If your rateable value is over £50,999 or your property is empty or entitled to other mandatory relief your bill is calculated using a higher multiplier instead of the small business multiplier. The difference (1.3p) is not subject to the transitional calculation.

2024 to 2025 onwards

If your rateable value is below £51,000 your bill is calculated using the small business multiplier even if the property is empty or receiving mandatory relief. Bills with rateable values of £51,000 upwards are calculated using the higher “standard” multiplier. For 2024 to 2025 this is 54.6p. The difference (4.7p) is not subject to the transitional calculation.