Transitional Relief

Following the revaluation of commercial premises in 2017, some business ratepayers experienced increases in their Business Rate charges from 1st April 2017, whilst others experienced reductions.

To balance out the effects of the changes that arose, a transitional relief scheme was introduced to ‘phase in’ the effects of the revaluation.  This was to ensure that increases or reductions to business rates liabilities were limited to specified levels for the time periods concerned. 

In general terms and subject to some exceptions, the transitional relief scheme compared the amount of annual business rates payable, determined as at 31st March 2017, with the annual business rates payable, determined as at 1st April 2017.  Where the increase or reduction was more than a specified amount, it was restricted to a level specified in regulations.   

The transitional relief scheme operated over a five-year period such that every ratepayer, paid the full rates liability for their premises, by the end of the fifth year. 

From 1st April 2017, transitional relief was automatically applied for Business Ratepayers with any limit in the increase or reduction in rates payable from the revaluation, being limited, dependent upon the rateable value of the premises concerned.

As transitional relief was linked to the property rather than the ratepayer, changes in ratepayer did not affect the transitional relief awarded.  

At the Budget on 27 October 2021, it was announced that the current transitional relief scheme would be extended for one year in respect of 2022/23, based upon existing scheme arrangements, as summarised below.   

The scheme for 2022/23 will therefore in general terms, restrict increases in bills to 15% for businesses with small properties (i.e. up to and including £28,000 rateable value) and 25% for medium properties (up to and including £100,000 rateable value).

There will be no transitional relief applicable for a business ratepayer whose bill was subject to a “phased” reduction.

Further details regarding the arrangements may be found by visiting Extension of Transitional Relief and Supporting Small Business Relief for small and medium properties.

There is no need to make an application for this reduction as the award is automatic and will be shown on your bill if you are eligible, once the software to enable this has been received. This will be after 1st April 2022.