Transitional relief scheme for 2017 onwards
The new Rateable Values (RVs) that came into effect from April 2017 saw a number of winners whose RVs go down and a number of losers whose RVs go up. In order to mitigate the immediate effect of these changes the government introduced a transitional relief scheme.
The transitional relief scheme means that the full effect of the changes is spread over 5 years and is calculated year on year.
In order to better understand how your bill has been worked out an outline of the scheme is below, we understand that it is a very complex scheme so please do not hesitate to contact business rates if you need further clarification on 01753 772220 or via the contact us form.
When properties are revalued for a new rating list it is not possible to ensure a uniform change in rates bills for all properties. This is because a revaluation is meant to be revenue neutral (so the overall tax burden for the country as a whole is not altered (in real terms) but the rateable values for different properties and types of properties in different parts of the Country can change quite a lot.
The Government re-sets the multiplier in a revaluation year so that the total of all the new RVs in the country multiplied by the new multiplier gives the same overall revenue as before (adjusted for inflation).
RVs throughout the country, and within an authority’s area do not change uniformly although they do all have the same new multiplier applied to them. This means that some businesses faced large increases or decreases in their Rates bills.
To mitigate the effects of these potential large increase or decreases in rates bills the Government introduced a transitional scheme (as it has done at every other revaluation year) that limits the amount of increase, or decrease, a property can face when comparing the 2017/18 liability with the 2016/17 liability. The idea is that the money “raised” by limiting the amounts of decreases goes to “pay for” the relief given to properties facing large increases.
To do this the Government has set the amounts by which a property’s rates can increase or decrease by (taking into account inflation) year on year during the life of the list and depending on the rateable value of the property as follows:
| Year | RV <£20K | RV >£20K & <£100K | RV >£100K | |
|---|---|---|---|---|
| 2017/18 | 5.0% | 12.5% | 42% | |
| 2018/19 | 7.5% | 17.5% | 32% | |
| 2019/20 | 10% | 20% | 49% | |
| 2020/21 | 15% | 25% | 16% | |
| 2021/22 | 15% | 25% | 6% | |
| Year | RV <£20K | RV >£20K & <£100K | RV >£100K | |
|---|---|---|---|---|
| 2017/18 | 20% | 10% | 4.1% | |
| 2018/19 | 30% | 15% | 4.6% | |
| 2019/20 | 35% | 20% | 5.9% | |
| 2020/21 | 55% | 25% | 5.8% | |
| 2021/22 | 55% | 25% | 4.8% | |