This stakeholder update brings together the latest information provided by the Welsh Government on the Non-Domestic Rates (NDR) system in Wales.
Statement on NDR Reform
In 29 March, the Minister for Finance and Local Government made a statement in the Senedd, outlining the Welsh Government’s plans for NDR reform over the short, medium and longer term. These plans include more frequent revaluations, improvements to the appeals process and the implementation of further measures to tackle fraud and avoidance, as well as continuing to explore the potential for a land value tax to replace NDR in future. A full transcript of the debate which followed the statement is available on the Senedd website.
Retail, Leisure and Hospitality Rates Relief scheme for 2022-23
Retail, leisure and hospitality businesses in Wales will receive 50% NDR relief for the duration of 2022-23. Like the scheme announced by the UK Government, the Welsh Government’s Retail, Leisure and Hospitality Rates Relief scheme will be capped at £110,000 per business across Wales. This means that local authorities will not be able to automatically apply the relief to ratepayers’ bills. Eligible businesses will be required to apply to their local authority for relief and declare that the total amount of relief being claimed from authorities across Wales does not exceed £110,000.
Further to our guidance, local authorities are now taking applications for relief under the scheme for 2022-23. We have published links to the application forms for all local authorities on our Business Wales webpages.
Letting criteria for self-catering accommodation
Following consultation, the Welsh Government has announced changes to the criteria for a property providing self-catering accommodation to be classified as non-domestic and liable for NDR, rather than domestic and liable for council tax. The views conveyed in the consultation, including those from respondents representing the wider tourism industry, indicated that most genuine self-catering businesses could comply with increased letting requirements.
The Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 (“the Order”) will amend the minimum length of time a property is required to be actually let, increasing it from 70 days to 182 days, within any 12 month period. It will also amend the minimum length of time a property is required to be made available to let, increasing it from 140 days to 252 days.
A technical consultation on the draft Order is open until 12 April 2022. The Order will be made as soon as possible and the amended criteria will apply to all assessments for the NDR list, from 1 April 2023.
The letting criteria apply only to self-catering properties, as classified by the Valuation Office Agency (VOA). The VOA is responsible for classifying non-domestic properties based on their use. There are numerous classifications within the broad use category which includes hotels, hostels, guest houses, self-catering holiday lets and others. Properties not classified as self-catering holiday lets are not subject to the letting criteria which the proposed legislation will amend. The Welsh Government is unable to comment on individual circumstances and property classifications.
All consultations apply to Wales only.
Local taxes for second homes and self-catering accommodation – summary of responses
A consultation on possible changes to local taxes, to help local authorities manage the impact of second homes and self-catering accommodation, ran for twelve weeks from 25 August to 17 November 2021. The summary of responses to the consultation was published on 1 March 2022.
Central rating list for the non-domestic rates revaluation 2023 – open
A consultation on proposed changes to the central rating list is open for twelve weeks, from 21 January to 15 April 2022.
The Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 – open
A technical consultation on the draft Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 is open for six weeks, from 1 March to 12 April 2022. The legislation will implement the announced amendments to the criteria for a property providing self-catering accommodation to be classified as non-domestic and liable for NDR, to take effect from 1 April 2023.
Splitting of non-domestic properties for valuation purposes – open
A consultation on the splitting of non-domestic properties for valuation purposes is open for twelve weeks, from 9 March to 1 June 2022.
We welcome feedback on this stakeholder update. Any comments or enquiries should be directed to: firstname.lastname@example.org.
The next update is planned for July 2022 (provisional).