This stakeholder update brings together the latest information provided by the Welsh Government on the Non-Domestic Rates (NDR) system in Wales.
Latest updates
NDR reform
On 29 March, the Minister for Finance and Local Government made a statement in the Senedd, outlining the Welsh Government’s plans for NDR reform. We have taken the next step in this reform programme by launching a consultation 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.
The consultation is open for twelve weeks, until 14 December 2022, and all stakeholders are encouraged to submit their views on the proposals.
Revaluation 2023
Preparations are underway for new rating lists to be introduced in Wales, following revaluation, from 1 April 2023. A revaluation comprises the review of the Rateable Value (RV) of all non-domestic properties, by the Valuation Office Agency (VOA), at a particular point in time. Every non-domestic property will be assigned a new RV, based upon its estimated annual rental value as at 1 April 2021. The VOA will compile and publish the new rating list in draft by the end of 2022.
Revaluation is carried out to maintain fairness in the NDR system, by redistributing the total amount payable between ratepayers, to reflect relative changes in the property market. This means that, for an individual ratepayer, it is not only the change in the RV of their own property which will determine their NDR liability. Some ratepayers will see their bill increase, some will see a decrease, and some may not see any change, reflecting relative changes in the property market across the tax base.
NDR bills are calculated by taking the RV of a property and multiplying it by the NDR multiplier (before any reliefs are applied). The Welsh Government will confirm the multiplier, to ensure the overall revenue from NDR supports stable funding for local public services across Wales. As we prepare for the 2023 revaluation, we will review the impact on the tax-base and consider how to respond.
Further information about the 2023 revaluation can be found on the VOA website.
Splitting of non-domestic properties for valuation purposes
In the past, units of property next to each other, occupied by the same ratepayer and used for the same purpose, received one NDR bill. A Supreme Court ruling in 2015 changed this practice, affecting a small number of ratepayers. The Welsh Government has 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 have been made law and will come into force on 1 April 2023.
Appeals reform
Our plans for NDR reform include more frequent revaluations, for which a critical enabler is improvements to the appeals process. Earlier this year, we announced the details of the changes, which will be underpinned by the adoption of a digital platform delivered by the VOA. Draft legislation to implement the changes was subject to a technical consultation.
Following the consultation, we have confirmed that we will move forward with the changes. The Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023 will be made law early in 2023 and come into force on 1 April, to coincide with the new rating list.
Tackling fraud and avoidance
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. Draft legislation to implement this measure was subject to a technical consultation earlier this year.
Following the consultation, we have confirmed that the Non-Domestic Rating (Persons Required to Supply Information and Service of Notices) (Wales) Regulations 2022 will be made law later this year and come into force on 1 April 2023.
NDR consultations
All consultations apply to Wales only.
Reforming non-domestic rates for Wales – open
A consultation on a range of proposals for the reform of NDR over the remainder of the Senedd term is open for twelve weeks, from 12 September to 5 December 2022.
The Non-Domestic Rating (Persons Required to Supply Information and Service of Notices) (Wales) Regulations 2023 – summary of responses
A technical consultation on the draft Non-Domestic Rating (Persons Required to Supply Information and Service of Notices) (Wales) Regulations 2023 was open for twelve weeks, from 24 June to 16 September 2022. The legislation will implement measures to help tackle NDR fraud and avoidance, by enabling local authorities to request information from third parties to support their role in billing and collection of NDR.
The Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023 – summary of responses
A technical consultation on the draft Non-Domestic Rating (Alteration of Lists and Appeals) (Wales) Regulations 2023 was open for twelve weeks, from 19 July to 11 October 2022. The legislation will implement reforms to the NDR appeals process, from 1 April 2023.
The Non-Domestic Rating (Property in Common Occupation) (Wales) Regulations 2022 – summary of responses
A technical consultation on the draft Non-Domestic Rating (Property in Common Occupation) (Wales) Regulations 2022 was open for six weeks, from 4 August to 16 September 2022. The legislation will specify when two or more units of property will be treated as one for valuation purposes.
Further information
We welcome feedback on this stakeholder update. Any comments or enquiries should be directed to: localtaxationpolicy@gov.wales.
The next update is planned for January 2023 (provisional).
Useful links:
Welsh Government
Business Wales
Valuation Office Agency
Valuation Tribunal for Wales
Welsh Local Government Association
Senedd Cymru