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Non-Domestic Rates – Improvement Relief

About this guidance

This guidance provides ratepayers and local authorities with information about non-domestic rates (NDR) improvement relief. It applies to Wales only and does not replace any existing NDR legislation or any guidance on other reliefs.
Billing queries about the relief should be directed to the relevant local authority. Enquiries about this guidance and the related legislation should be sent to the Welsh Government at the following email address:

A range of other mandatory and discretionary NDR reliefs are also available to specific types of property or occupiers. Further information about NDR relief schemes can be found on our Business Wales webpages.


The Welsh Government recognises that many businesses see the NDR system as a disincentive to investing in property improvements, as any resulting increase in a property’s rateable value may lead to a higher bill. Improvement relief has been introduced to help address this potential barrier to growth and investment in the tax-base, from 1 April 2024.

The relief is intended to support ratepayers investing in improvements to their non-domestic properties which will support their business, by providing relief from the effect of a resulting rateable value increase on their NDR liability for a period of 12 months. The relief is applied by calculating the chargeable amount of NDR for the relevant property as if the rateable value in the list for the day concerned is that rateable value minus the increase in rateable value attributable to the eligible improvement works. This will ensure that businesses and other ratepayers are able to start realising the benefits of improvements they make, before their NDR bill increases. 

Improvement relief is applicable to both the local and central rating lists. Eligibility for the relief is subject to two conditions being met. Firstly, the improvements must meet the definition of qualifying works. Secondly, the property must have remained in occupation by the same ratepayer in the period since the qualifying works began. These conditions are defined in the Non-Domestic Rating (Improvement Relief) (Wales) Regulations 2023 and explained in more detail in this guidance.

The relief is in place from 1 April 2024 and will be available up to and including 31 March 2029. 

Eligibility for improvement relief

How is eligibility for the relief determined?

A hereditament (unit of property with a rating assessment) on a local or central rating list in Wales is eligible for improvement relief if the ‘qualifying works condition’ and the ‘occupation condition’ are met.

The Valuation Office Agency (VOA), which is independent of the Welsh Government, is responsible for the valuation of properties for the purpose of NDR. The VOA will, therefore, determine whether the qualifying works condition is met and the effect of any improvements to a property on its rateable value. If the VOA is satisfied that the improvements meet the definition of qualifying works, it will issue a certificate confirming the increase in rateable value which is attributable to the works.

Billing authorities (local authorities in respect of the local rating lists and the Welsh Government in respect of the central rating list) are responsible for NDR billing and the application of reliefs. The relevant billing authority must be satisfied that the occupation condition has been met before they apply the relief based on the certificate issued by the VOA.

The qualifying works condition

Qualifying works must result in a positive change in the rateable value of the hereditament to be eligible for relief. Any improvements which result in no overall change in rateable value or a reduction due to simultaneous value-supressing activity, such as demolition works, are not eligible for the relief.

To meet the definition of qualifying works, the improvements must result in one or more of:

  • an increase to the size of a building or the internal useable space within it
  • improvements or upgrades to the property’s physical state, such as the addition of heating, air conditioning, or raised flooring
  • the addition of other rateable plant and machinery

Illustrative examples of improvements resulting in an increase in rateable value which may meet the qualifying works condition include:

  • the addition of insulation or new lining to a previously uninsulated industrial property
  • a physical extension to a property
  • the removal of a structural wall within a shop, so that the area previously behind the wall is then used for retail instead of storage
  • the addition of a structural mezzanine retail area in a retail warehouse

A change of use alone (e.g. from a shop to a restaurant) will not constitute qualifying works. It is, however, possible that works such as the examples given above which are associated with a change of use may still be eligible. The addition of land to an existing property, the creation of a new hereditament next to the existing property, and general maintenance and repairs would also not constitute qualifying works. A new building within an existing hereditament, such as a new building on a large factory site, would be treated in the same way as an extension or improvement to an existing building, and meet the definition (provided there was an increase in the rateable value of the hereditament which the property comprises).

If a ratepayer undertook a scheme of works resulting in the division of a property into multiple different hereditaments, this may still qualify for relief if the other tests are met. As an example, if the ratepayer for an industrial unit undertook qualifying works and also divided part of their property into a separate hereditament for use by a different occupier, the works may still qualify, but only in respect of the hereditament the same ratepayer continues to occupy. This is linked to the occupation condition, which is described in more detail below.

The intention of the relief is to support occupiers making improvements to their existing business premises. It is not the intention to subsidise general commercial property development, such as new construction or refurbishment. Given that such major development generally results in properties being removed from the rating list, the definition of qualifying works excludes circumstances where the property was not included in a rating list for part or all of the period during which the works were undertaken.

Illustrative examples which may not meet the qualifying works condition include:

  • construction of a new building resulting in a new rating assessment (i.e. a new hereditament)
  • a property removed from the rating list while substantial redevelopment is undertaken and returned to the list when the works are complete
  • replacement of an old technology, such as upgrading to more modern insulation, with no resulting change in rateable value

Qualifying works must be completed on or after 1 April 2024. Works completed before this date are not eligible. The VOA will determine whether the qualifying works condition has been met. If it is satisfied that the condition has been met, it will issue a certificate of the change in rateable value which is attributable to the qualifying works. 

The occupation condition

The occupation condition requires that, in the period since the qualifying works commenced, the property has remained occupied and the ratepayer has not changed. This means that the same ratepayer must have remained in occupation throughout the period in which the works were undertaken and during the period of relief following completion. It includes scenarios where a landlord makes improvements and the occupying ratepayer does not change, given that the ratepayer is likely to face higher overall rental costs as a result. 

This condition allows the billing authority to “lift the corporate veil” such that, for example, changes in occupation between subsidiaries of the same group would not in itself invalidate eligibility for improvement relief. Where there has been a split or merger since the qualifying improvement works commenced, the requirement for continuous occupation by the same person applies to predecessor hereditaments.

The period of relief ends 12 months after completion of the qualifying works, unless the eligible ratepayer vacates the property at an earlier date. In that case, the occupation condition ceases to be met. Entitlement to relief cannot be restored in respect of the same qualifying improvement works if the property is subsequently reoccupied, even if by the same person. Billing authorities will need to be satisfied that the occupation condition is met before awarding relief.

Administration of improvement relief

How is the relief provided?

The relevant billing authority will administer the relief, where the VOA has certified that the qualifying works condition has been met (and the certificate has not been withdrawn or ceased to have effect) and the billing authority is satisfied that the occupation condition has been met. Improvement relief will be automatically applied to the bills of eligible ratepayers. There is no need to apply for it.

The relief will apply for a 12-month period from the date on which qualifying works were completed. Given that qualifying works will be completed on or after 1 April 2024, routine billing activities ahead of the 2024-25 financial year will not need to consider improvement relief. It is likely to be several months after the first works are completed that eligible cases will begin to be identified. The relief will then be reflected in an eligible ratepayer’s NDR liability for the remainder of the billing year in which the qualifying works are completed and part of the following year.

Local authorities will be asked to identify the total amount of relief provided in their NDR returns (NDR1 and NDR3).

Certification of qualifying works

If the qualifying works and occupation conditions are met, the billing authority will calculate liability taking account of the certificate of change in rateable value issued by the VOA. This certifies the change in the overall rateable value of the property which is attributable to the qualifying works (the amount of “G” defined by regulation 6 of the Non-Domestic Rating (Improvement Relief) (Wales) Regulations 2023). The certificate reflects the net increase in rateable value resulting from all works undertaken and applies for 12 months from date of completion.

The certificate has daily effect for the 12-month period to which it relates, and the VOA is able to revise it should any part of the property affected by the qualifying works change during the period. The VOA is able to withdraw or amend a certificate at its discretion, for example to reflect changes in facts or errors identified. Any subsequent changes to a property which the VOA concludes are not a variation of the original qualifying works, but a new set of qualifying works, may result in a new certificate being issued.

Calculation of the chargeable amount

Improvement relief is not calculated and applied in the same way as other reliefs. It operates as a deduction (the amount of “G”) to the rateable value used to calculate the chargeable amount, rather than a deduction from a partially calculated liability. This ensures that any interactions with eligibility for other reliefs which may result from a rateable value change do not penalise the ratepayer. 

When qualifying improvement works are assessed by the VOA, the rating list will be updated to reflect the new rateable value for the hereditament and the certificate will identify the amount of that rateable value that it attributed to the works. For the 12-month duration of the certificate, billing authorities will calculate the chargeable amount of NDR for the relevant property as if the rateable value in the list for the day concerned is that rateable value minus “G” (the value of the certificate). This means that improvement relief is applied before the multiplier and any other reliefs in the calculation of the chargeable amount.

The approach is more nuanced than requiring billing authorities to reduce the chargeable amount. It is intended to be simpler and ensure that ratepayers can be confident that undertaking qualifying works will not result in their effective rateable value increasing for 12 months. 

The legislation providing for transitional relief following the 2023 NDR revaluation (the Non-Domestic Rating (Chargeable Amounts) (Wales) Regulations 2022) has been amended as a consequence of the introduction of improvement relief, to ensure that the same principle applies where liability is calculated in accordance with the transitional relief rules. Where improvement relief applies, the rateable value used to calculate transitional relief entitlement will also be the value shown in the list for the day concerned minus “G”.

Business Wales Helpline

03000 6 03000

Lines are open 10am to 4pm Monday to Friday.

Rydym yn croesawu galwadau’n Gymraeg.
We welcome calls in Welsh.