Non Domestic Rates (NDR) are also known as business rates and are taxes to help pay for local services. These are charges on most non domestic properties. If you pay business rates, your property may be eligible for business rates relief.
Some premises will be exempt from business rates, while others may qualify for:
- the small business rates relief scheme
- the charitable and non-profit organisations rates relief
- relief on empty properties
Local authorities can also grant hardship relief to businesses if they believe that it is in the interests of the local community to do so.
2. How your business rates are calculated
Your business rate is calculated by taking the Rateable Value (RV) of your property and multiplying it by the current non domestic rates 'multiplier' (or 'poundage'). The Valuation Office Agency (VOA) values properties and assigns the RV. You can appeal against its RV if you think it is incorrect.
From April 2018 the Welsh Government has set the multiplier according to the Consumer Price Index (CPI) and for the financial year 2019-20 the multiplier will be 0.526.
Appeals against property valuations
3. Type of business rates relief
Properties exempt from business rates include:
- agricultural land and buildings including fish farms
- buildings used for training or the welfare of disabled persons
- buildings registered for public religious worship and church halls
You can find a list of the exempt types of property in Schedule 5 of the Local Government Finance Act 1988.
Small Business Rates Relief in Wales
The Welsh Government provides non-domestic rates relief to eligible small businesses.
- eligble business premises with a rateable value of up to £6,000 will receive 100% relief; and
- those with a rateable value between £6,001 and £12,000 will receive relief on a tapered basis from 100% to zero
The following types of business will continue to get relief as follows:
Registered Childcare Premises
- registered childcare providers receive 100% relief until 31 March 2022, during which time it will be evaluated to assess its effect
- Post offices with a rateable value up to £9,000 receive 100% relief
- Post offices with a rateable value between £9,001 and £12,000 receive 50% relief
Multiple Occupation Limit
Where a ratepayer is liable for more than two properties on a single local non-domestic rating list (“local list”), and those properties meet only the rateable value conditions, the ratepayer will only receive relief for a maximum of two such properties.
Following the 2017 non-domestic rates revaluation by the Valuation Office Agency, transitional relief will be implemented to support ratepayers whose eligibility for Small Business Rate Relief (SBRR) will be affected as a result of the revaluation.
The transitional relief scheme will be introduced to assist ratepayers in receipt of SBRR on 31 March 2017, experiencing a reduction in the percentage of SBRR they are entitled to on 1 April 2017, due to increases in their rateable value following the revaluation.
SBRR will be applied prior to transitional relief. The transitional relief will work by phasing in any resultant increases in liability over a 3 year period (25% of increased liability in year 1, 50% in year 2 and 75% in year 3).
Eligible ratepayers are those:
- moving from full SBRR to partial SBRR
- moving from full SBRR to no SBRR
- moving from partial SBRR to no SBRR
- staying within partial SBRR but seeing an increase in rateable value
High Street and Retail Rates Relief
The £23.6 million High Street Rate Relief Scheme is aimed at all retailers in Wales, for example shops, pubs, restaurants and cafes. The enhanced scheme will provide support to all retailers in Wales with a rateable value of up to £50,000.
Download information on High Street and Retail Rates Relief Scheme. This guidance includes further detail on the eligibility criteria.
It will be for individual local authorities to decide in each individual case when to grant relief, which will be available from 1 April 2019 until 31 March 2020.
We are providing grants to help eligible hydropower projects with their business rates. Hydropower projects extract energy from water courses to generate electricity. Hydropower projects with a rateable value up to £50,000 can apply for support towards their 2019-20 business rates. The Application Form and Guidance document is available here.
Charitable rate relief
If your property is occupied by a registered charity or community amateur sports club, and used for charitable purposes, you automatically qualify for 80% mandatory rates relief.
You may qualify for relief of up to 100% at the discretion of the local authority if your property is occupied by a non-profit making body and used for purposes which are:
- to do with social welfare
- to do with literature
- to do with the fine arts
- to do with recreation by a not-for-profit club or society
Further information on charitable rate relief can be found in this guidance.
Rates relief for empty properties
Empty business properties are exempt from paying business rates for 3 months after the property becomes vacant.
There are additional exemptions for certain types of property or for properties under a set rateable value. These include:
- industrial premises, such as warehouses, which are exempt for a further 3 months
- listed buildings which are exempt until they become occupied again
- buildings with a rateable value under £2,600 which are exempt until they become occupied again
- properties owned by charities, which are exempt if the property's next use is likely to be wholly or mainly for charitable purposes
- community amateur sports club buildings which are exempt if their next use is likely to be wholly or mainly for a sports club
- a business whose owner is a company which is subject to a winding-up order made under the Insolvency Act 1986 or which is being wound up voluntarily under that Act
- a business whose owner is a company in administration within the meaning of paragraph 1 of Schedule B1 to the Insolvency Act 1986 or is subject to an administration order made under the former administration provisions within the meaning of article 3 of the Enterprise Act 2002 (Commencement No. 4 and Transitional Provisions and Savings) Order 2003.
- a business whose owner is entitled to possession only in his or her capacity as the personal representative of a deceased person.
After the exemption period ends, you will be liable for the full business rate bill.
You should notify your local authority when your property becomes vacant and also when it becomes re-occupied.
This link provides further information.
Local authorites can also grant hardship relief to businesses if they believe that it is in the interests of the local community to do so. For more information on hardship relief contact your local authority.
Guidance on how local authorities should apply the relief can be found here.
4. Self Catering Properties
If your property is in Wales and is commercially available to let as a self catering property, provided certain criteria are met it will be rated and valued for non-domestic rates. The Valuation Office Agency (VOA) works out the rateable value based on the property type, size and location.
From 1 April 2010 in Wales, self catering property is non-domestic and therefore liable for non-domestic rates, if the VOA is satisfied that:
- it will be available for letting commercially as self-catering accommodation for short periods totalling 140 days or more in the following 12 month period
- the ratepayer’s interest in the property enables them to let it for such periods
- in the 12 months prior to assessment it has been available for letting commercially as self catering accommodation for short periods totalling 140 days or more
- the short periods it has actually been commercially let for amounted to at least 70 days during that period
From 1 April 2016 in Wales, the criteria above will continue to apply but there is also a new provision so that:
- businesses consisting of several self catering properties at the same location or within very close proximity have the option to average the number of lettings days of the properties to meet the 70-day criterion where they are let by the same or connected businesses
You can find full guidance and advice on the rating of self catering properties in Wales in this brochure