Non-domestic rates stakeholder update: March 2023
This stakeholder update brings together the latest information provided by the Welsh Government on the Non-Domestic Rates (NDR) system in Wales.
On 29 March 2022, the Minister for Finance and Local Government made a statement in the Senedd, outlining the Welsh Government’s plans for NDR reform. We then consulted on a range of proposals which will make essential and positive changes to NDR in Wales. These proposals include a move towards more frequent revaluations and measures required to deliver them, as well as wider improvements to enable the Welsh Government to better adapt the NDR system to meet the needs of Wales. We have confirmed that we will continue to develop the proposals and published a summary of responses to the consultation.
The remainder of this update summarises the range of more immediate changes and reforms to NDR in Wales, all of which are taking effect from 1 April 2023.
A new rating list will be introduced in Wales from 1 April 2023, following the revaluation of all non-domestic properties by the Valuation Office Agency (VOA). Further information about the 2023 revaluation can be found on the VOA website. If ratepayers have questions about their valuations, they should contact the VOA.
The Welsh Government is providing transitional relief which will limit increases in NDR bills, as a result of the revaluation. An eligible ratepayer with an increased liability of more than £300 will pay 33% of their additional liability in the first year (2023-24) and 66% in the second year (2024-25), before reaching their full liability in the third year (2025-26). The relief will be automatically applied to ratepayers’ bills. We have published guidance on transitional relief.
The NDR multiplier will remain frozen in Wales for 2023-24, at 0.535. The multiplier is an integral part of determining ratepayers’ bills and the continued freeze will benefit all ratepayers who do not receive full relief. Individual bills may increase, decrease or remain the same, as a result of the revaluation taking effect on 1 April 2023.
Retail, leisure and hospitality businesses in Wales will receive 75% NDR relief for the duration of 2023-24. The relief 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. We have published guidance on the Retail, Leisure and Hospitality Rates Relief scheme for 2023-24.
Our recent consultation on reforming NDR for Wales included a proposal to legislate to clarify matters which should not result in a change of rateable value between revaluations. We have since confirmed that we will implement this proposal. The Non-Domestic Rating (Prescribed Assumptions) (Wales) Regulations 2023 have been made law and will come into force from 1 April 2023.
In March 2022, following consultation, the Welsh Government 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 minimum length of time a property is required to be actually let will be increased from 70 days to 182 days, within any 12-month period. The minimum length of time a property is required to be available to let will be increased from 140 days to 252 days.
Following a technical consultation on draft legislation, we confirmed that the Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022 has been made law. The new criteria will apply to all assessments for the NDR list, from 1 April 2023. We have updated our guidance for operators of self-catering accommodation to reflect these changes.
Our plans for NDR reform include more frequent revaluations. A critical enabler of this reform is improvements to the appeals process. Last year, we confirmed the details of the changes, which will be underpinned by the adoption of the VOA’s digital platform and ‘Check, Challenge, Appeal’ process for Wales. The Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023 have since been made law and will come into force on 1 April 2023.
In the past, units of property next to each other, used by the same ratepayer for the same purpose, received one NDR bill. A Supreme Court ruling in 2015 changed this practice, affecting a small number of ratepayers in Wales. Last year, we confirmed that the law has been changed to reinstate the practice before the ruling. The Non-Domestic Rating (Property in Common Occupation) (Wales) Regulations 2022 will come into force on 1 April 2023.
The 2023 rating list has been compiled in accordance with the VOA’s existing records and approach, following the 2015 ruling. The VOA will amend any assessments as necessary after 1 April 2023, as and when cases are brought to their attention. If a ratepayer believes their assessment should be amended, they should complete a ‘Check’ for their property. It may also be necessary to submit a ‘Challenge’, depending on the particular circumstances.
The Welsh Government announced a range of measures to tackle NDR fraud and avoidance, following consultation in 2018. One of these measures was to introduce a new legal power for local authorities to request information from ratepayers and third parties providing a service in relation to a property, to support their role in the billing and collection of NDR. Last year, we confirmed that we would legislate to deliver this measure. The Non-Domestic Rating (Persons Required to Supply Information and Service of Notices) (Wales) Regulations 2022 have been made law and will come into force on 1 April 2023.
All consultations apply to Wales only.
Reforming non-domestic rates for Wales – summary of responses
A consultation on a range of proposals for the reform of NDR over the remainder of the Senedd term was open for twelve weeks, from 21 September to 14 December 2022.
We welcome feedback on this stakeholder update. Any comments or enquiries should be directed to: email@example.com.
The next update is planned for summer 2023 (provisional).
Valuation Office Agency
Valuation Tribunal for Wales
Welsh Local Government Association